Sakhalin Energy Investment Company Ltd. (Sakhalin Energy) is a consortium for developing the Sakhalin-2 oil and gas project with corporate head office in

Yuzhno-Sakhalinsk Yuzhno-Sakhalinsk (, , ) is a city and the administrative center of Sakhalin Oblast, Russia. It is located on Sakhalin Island in the Russian Far East, north of Japan. Gas and oil extraction as well as processing are amongst the main industries on ...

. 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 chemical mixture found in geological formations, consisting mainly of hydrocarbons. The term ''petroleum'' refers both to naturally occurring u ...

(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 to liquid form for ease and safety of non-pressurized storage or transport. It takes up about 1/600th the volume o ...

(from 2009).

History

The original consortium was formed in 1991 by

Marathon The marathon is a long-distance foot race with a distance of kilometres ( 26 mi 385 yd), 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 ...

McDermott McDermott or MacDermott is an Irish surname and the anglicised version of Mac Diarmada (also spelled Mac Diarmata), the surname of the ruling dynasty of Moylurg, a kingdom that existed in Connacht from the 10th to 16th centuries. The last ruling ...

Mitsui is a Japanese corporate group and '' keiretsu'' that traces its roots to the ''zaibatsu'' groups that were dissolved after World War II. Unlike the ''zaibatsu'' of the pre-war period, there is no controlling company with regulatory power. Ins ...

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 Science Biology * Seashell, a hard outer layer of a marine ani ...

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 traces its origins to the Mitsubishi zaibatsu, a unified company that existed from 1870 to 194 ...

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

Bermuda Bermuda is a British Overseas Territories, British Overseas Territory in the Atlantic Ocean, North Atlantic Ocean. The closest land outside the territory is in the American state of North Carolina, about to the west-northwest. Bermuda is an ...

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 country spanning Eastern Europe and North Asia. It is the list of countries and dependencies by area, largest country in the world, and extends across Time in Russia, eleven time zones, sharing Borders ...

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 (until 1975 spelled Zetland), also called the Shetland Islands, is an archipelago in Scotland Scotland is a Countries of the United Kingdom, country that is part of the United Kingdom. It contains nearly one-third of the Uni ...

, and an eight block area in the

Gulf A gulf is a large inlet from an ocean or their seas into a landmass, larger and typically (though not always) with a narrower opening than a bay (geography), bay. The term was used traditionally for large, highly indented navigable bodies of s ...

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, , ɡɐsˈprom) is a Russian State-owned enterprise, majority state-owned multinational Energy industry, energy corporation headquartered in the Lakhta Center in Saint Petersburg. The Gazprom name is a contract ...

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 ...

, 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 get businesses and firms worldwide to adopt sustainable and socially responsible policies, and to report on their implementation. The UN Global Compact is the world's ...

. After the

Russian invasion of Ukraine On 24 February 2022, , starting the largest and deadliest war in Europe since World War II, in a major escalation of the Russo-Ukrainian War, conflict between the two countries which began in 2014. The fighting has caused hundreds of thou ...

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 has served as President of Russia since 2012, having previously served from 2000 to 2008. Putin also served as Prime Minister of Ru ...

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; Historically also known as , or as ; ) is a marginal sea of the western Pacific Ocean. It is located between Russia's Kamchatka Peninsula on the east, the Kuril Islands on the southeast, Japan's island of Hokkaido on the sou ...

, 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 an organization enabling the co-operation of leading oil-producing and oil-dependent countries in order to collectively influence the global oil market and maximize Profit (eco ...

+ 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. In 2022, the company's revenue amounted to 320 billion rubles.

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 Russian companies established in 1994 Energy companies established in 1994 Non-renewable resource companies established in 1994 Companies based in Yuzhno-Sakhalinsk Gazprom subsidiaries Natural gas companies of Russia Oil companies of Russia Shell plc subsidiaries