Sakhalin Energy Investment Company Ltd. (Sakhalin Energy) is a consortium for developing the

Sakhalin-2 The Sakhalin-2 (russian: Сахалин-2) project is an oil and gas development in Sakhalin Island, Russia. It includes development of the Piltun-Astokhskoye oil field and the Lunskoye natural gas field offshore Sakhalin Island in the Okhots ...

oil and gas project with corporate head office in

Yuzhno-Sakhalinsk Yuzhno-Sakhalinsk ( rus, Ю́жно-Сахали́нск, a=Ru-Южно-Сахалинск.ogg, p=ˈjuʐnə səxɐˈlʲinsk, literally "South Sakhalin City") is a city on Sakhalin island, and the administrative center of Sakhalin Oblast, Russia. I ...

. Roman Dashkov has been the Chief Executive Officer since 2013. The company's principal activities are the production and export of

crude oil Petroleum, also known as crude oil, or simply oil, is a naturally occurring yellowish-black liquid mixture of mainly hydrocarbons, and is found in geological formations. The name ''petroleum'' covers both naturally occurring unprocessed crude ...

(since 1999) and

liquefied natural gas Liquefied natural gas (LNG) is natural gas (predominantly methane, CH4, with some mixture of ethane, C2H6) that has been cooled down to liquid form for ease and safety of non-pressurized storage or transport. It takes up about 1/600th the volu ...

(from 2009).

History

The original consortium was formed in 1991 by

Marathon The marathon is a long-distance foot race with a distance of , usually run as a road race, but the distance can be covered on trail routes. The marathon can be completed by running or with a run/walk strategy. There are also wheelchair div ...

McDermott McDermott is an Irish surname from County Roscommon and is mostly found in the West of Ireland. Some notable people with the surname are listed below. Surname A * Alan McDermott (born 1982), Irish footballer *Alice McDermott (born 1953), America ...

Mitsui is one of the largest '' keiretsu'' in Japan and one of the largest corporate groups in the world. The major companies of the group include Mitsui & Co. ( general trading company), Sumitomo Mitsui Banking Corporation, Nippon Paper Industri ...

and Russian Federation as MMM Consortium.

Shell Shell may refer to: Architecture and design * Shell (structure), a thin structure ** Concrete shell, a thin shell of concrete, usually with no interior columns or exterior buttresses ** Thin-shell structure Science Biology * Seashell, a hard o ...

and

Mitsubishi The is a group of autonomous Japanese multinational companies in a variety of industries. Founded by Yatarō Iwasaki in 1870, the Mitsubishi Group historically descended from the Mitsubishi zaibatsu, a unified company which existed from 1870 ...

joined the consortium in 1992, to make it MMMMS. In April 1994, the consortium formed Sakhalin Energy Investment Company Ltd. incorporated in

Bermuda ) , anthem = "God Save the King" , song_type = National song , song = " Hail to Bermuda" , image_map = , map_caption = , image_map2 = , mapsize2 = , map_caption2 = , subdivision_type = Sovereign state , subdivision_name = , e ...

to develop and manage the Sakhalin II project. Sakhalin Energy signed a production sharing agreement with the

Russian Federation Russia (, , ), or the Russian Federation, is a List of transcontinental countries, transcontinental country spanning Eastern Europe and North Asia, Northern Asia. It is the List of countries and dependencies by area, largest country in the ...

in 2004. McDermott sold its share to the other partners in 1997 and Marathon traded its share to Shell for other properties (the BP operated Foinaven field, near the

Shetland Islands Shetland, also called the Shetland Islands and formerly Zetland, is a subarctic archipelago in Scotland lying between Orkney, the Faroe Islands and Norway. It is the northernmost region of the United Kingdom. The islands lie about to the no ...

, and an eight block area in the Gulf of Mexico—including the Ursa field) in 2000. In 2007,

was forced by the Russian government to sell part of its stake to

Gazprom PJSC Gazprom ( rus, Газпром, , ɡɐzˈprom) is a Russian majority state-owned multinational energy corporation headquartered in the Lakhta Center in Saint Petersburg. As of 2019, with sales over $120 billion, it was ranked as the larges ...

which made Gazprom the largest shareholder with 50% share of the company. The consortium then developed into its current form, consisting of Russia's

Royal Dutch Shell Shell plc is a British multinational oil and gas company headquartered in London, England. Shell is a public limited company with a primary listing on the London Stock Exchange (LSE) and secondary listings on Euronext Amsterdam and the New Yo ...

, and Japan's

and

. In November 2009, Sakhalin Energy joined the

United Nations Global Compact The United Nations Global Compact is a non-binding United Nations pact to encourage businesses and firms worldwide to adopt sustainable and socially responsible policies, and to report on their implementation. The UN Global Compact is a princ ...

. After the

Russian invasion of Ukraine On 24 February 2022, in a major escalation of the Russo-Ukrainian War, which began in 2014. The invasion has resulted in tens of thousands of deaths on both sides. It has caused Europe's largest refugee crisis since World War II. An ...

in February 2022, Shell said that it would exit Sakhalin-2 and other ventures in Russia. On 30 June 2022, Russian President

Vladimir Putin Vladimir Vladimirovich Putin; (born 7 October 1952) is a Russian politician and former intelligence officer who holds the office of president of Russia. Putin has served continuously as president or prime minister since 1999: as prime min ...

signed a decree ordering the transfer of the Sakhalin-2 project to a new domestic operator. Foreign investors will be required to apply to retain their existing shares in the new Russian company within a month. The Russian government will then decide whether to allow foreign shareholders to keep their stake. If they are rejected, the government will sell the foreign shareholder’s stake and keep the proceeds in the shareholder’s special account.

Operations

Sakhalin Energy develops the Piltun-Astokhskoye and the Lunskoye oil and gas fields, known as the Sakhalin-II project, in the

Sea of Okhotsk The Sea of Okhotsk ( rus, Охо́тское мо́ре, Ohótskoye móre ; ja, オホーツク海, Ohōtsuku-kai) is a marginal sea of the western Pacific Ocean. It is located between Russia's Kamchatka Peninsula on the east, the Kuril Islands ...

, offshore Sakhalin island in the Russian Far East. The infrastructure of the Sakhalin-II project includes: * Offshore Molikpaq platform * Offshore Piltun-Astokhskoye-B platform * Offshore Lunskoye-A platform * Onshore processing facility * Transsakhalin pipeline system * LNG plant and oil export terminal within Prigorodnoye Production Complex About 4% of global supply of LNG comes from the Prigorodnoye production complex. PA-B won the overall Drilling Rig of the year award with Molikpaq in the runner’s up and LUN-A in the 5th place in the Shell Rig League table in 2017, which ranks on the performance, HSE and People scores. Following the

OPEC The Organization of the Petroleum Exporting Countries (OPEC, ) is a cartel of countries. Founded on 14 September 1960 in Baghdad by the first five members (Iran, Iraq, Kuwait, Saudi Arabia, and Venezuela), it has, since 1965, been headquart ...

+ deal, agreed in April 2020 amid falling global demand in oil, the Sakhalin-II project reduced its oil output from 108,000 to 88,000 bpd, a decline in production of 18.3%. In June 2020, Sakhalin Energy's oil and has production licences were extended for five years, after being awarded in 1996 and due to expire in 2021. The firm now holds exploratory and production rights until May 2026. In 2020, according to the International Financial Reporting Standards (IFRS), revenues of Sakhalin Energy amounted to US$ 4,383 mln, and its total net income was US$ 1,080 mln.

Shareholders

The current shareholders are: *

Sakhalin Holdings B.V. (subsidiary of Gazprom) - 50% plus 1 share *

Sakhalin Holdings B.V. (subsidiary of Royal Dutch Shell) - 27.5% minus 1 share (intends to sell all shares due to

)Energy giant Shell to end partnership with Russia’s Gazprom as Ukraine conflict intensifies
CNBC, Feb 28 2022 *

Sakhalin Holdings B.V. (subsidiary of Mitsui) - 12.5% *

- 10%

References

External links

* {{Shell oil Companies based in Yuzhno-Sakhalinsk Gazprom subsidiaries Natural gas companies of Russia Oil companies of Russia Shell plc subsidiaries