Anchorage company gets contract for Russian oil field work

Natchiq to be the lead service contractor on Sakhalin II oil field being developed by Marathon, Royal Dutch Shell, Mitsui, Mitsubishi

by The Associated Press

An Anchorage-based construction company has won its first long-term contract to work in the Sakhalin Island oil fields in the Russian Far East.

Natchiq Inc. will be the lead service contractor on the Sakhalin II oil field.

Sakhalin II is under development by a consortium of companies called Sakhalin Energy Investment Co., said Keith Burke, a Natchiq vice president. The consortium includes oil firms Marathon and Royal Dutch Shell and Japanese trading companies Mitsui and Mitsubishi.

Sakhalin II is believed to have some 2 billion barrels of recoverable oil and 14 trillion cubic feet of natural gas. The field is off the island’s east coast.

Natchiq and its subsidiary companies will be part of the ongoing maintenance contract for the oil production platform.

The work represents the first time that a Russian-American company has won an oil industry contract to do maintenance and construction work off Sakhalin Island, Burke said.

Production began on the platform in July of 1999. Over the next 10 years, developers plan to add a second oil production platform and build a transportation pipeline onshore to the city of Korsokov. The developers plan to flood the reservoir with water in 2001.

Sakhalin Energy plans to sell liquefied natural gas to South Korea and Japan, Burke said.

Natchiq hopes to be a part of all those projects, Burke said. Natchiq would like to build modules for the water flood at its construction yard in Nikiski, Burke said. Natchiq already has done module construction for ARCO Alaska Inc. and BP Exploration (Alaska) Inc.

For now, the company will maintain the existing platform. Natchiq will send 20 workers to the platform during the second week of January, a press release said.

Natchiq will carry out the contract with two Russian joint venture partners based in Uzhno, Sakhalin.

Natchiq is Alaska’s third-largest employer, with 2,300 employees. The company had revenues of $350 million in 1998, Burke said.