Igor Sechin Started Production Drilling at the Northern Chaivo Field

Rosneft started implementation of a large-scale project aimed at drilling of the first production well at the field North-end of Chaivo. Rosneft President, Chairman of the Management Board Igor Sechin and Sakhalin Region Governor Alexander Khoroshavin attended the grand ceremony.

As stated by Igor Sechin speaking at the ceremony of the drilling start:

«Rosneft enthusiastically participates in implementation of the development program of the Far East initiated by Russian President Vladimir Putin. Far East is the priority area for Rosneft. Our largest projects in the region are represented by offshore development, creation of the shipbuilding cluster, construction of the Far East Petrochemical Company, and the LNG plant on Sakhalin.

Development pattern of the field involves innovative drilling technologies. The works will be carried out with the use of unique coastal drilling rig Yastreb, which has no analogues in the world. Also, effectiveness of the project is achieved by using capacity of created Sakhalin-1 project infrastructure. This is an example of how smart investments enter our energy sector, creating a fundamentally new technological level of offshore development both from an efficiency and environmental safety standpoint.»

Notes for Editors:

Beginning of drilling of the first exploration well at the Northern Chaivo field starts the second level of Sakhalin-1 fields development (Chaivo, Odoptu, and Arkutun-Dagi). The third level involves development of oil reserves of the Arkutun-Dagi field. Lifecycle of the project will run until 2040–2050. The participants of the project are planning to reach design capacity for oil in 2017, for gas in 2027, with maximum values of 1.6 million tons of oil, and 1.5 million cubic meters of gas. In total, while executing the Northern Chaivo project, production of oil will amount to about 14 million tons, and gas recovery will total 12.6 million cubic meters. The total capital expenditure is 119.7 billion rubles. Northern tip of the Chaivo field is located within shallow-water area of the northeast Sakhalin shelf. Recoverable reserves are 14.9 million tons of oil, and 4.3 billion cubic meters of gas.

Investment volume of the Company into Far Eastern Federal District increased over a period of 2011-2013 from 19 billion rubles to 37 billion rubles, i.e. almost doubled. The next doubling is planned for 2015 up to 79 billion rubles. In comparable prices growth in 2012-2015 amounts to 25-30% annually.

Rosneft Information Division
May 16, 2014