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Marathon trades Sakhalin interests with Shell
Petroleum News Alaska
Shell Sakhalin Holdings B.V. and Marathon Sakhalin Ltd. said June 1 they have signed a non-binding letter of intent to transfer Marathon’s 37.5 percent interest in Sakhalin Energy Investment Co. Ltd. to Shell, which currently holds 25 percent of Sakhalin Energy.
In exchange, Marathon will acquire all of Shell UK Ltd.’s interests (28 percent) in the BP Amoco-operated Foinaven field and associated infrastructure, located in the Atlantic Margin west of the Shetland Islands in the United Kingdom, and a 3.5 percent overriding royalty on 100 percent of the production from eight blocks in the Gulf of Mexico, including the Ursa field.
In addition, there will be a reimbursement of expenditures made by Marathon for the Sakhalin project for the year 2000.
David Golder, vice president, International Production for Marathon Oil Co., said Marathon is proud of its achievement in Sakhalin.
“In trading our Sakhalin interest with Shell, we have secured equity in two significant producing properties, each with growth potential, located in core areas for Marathon.”
Investment company established in 1994 Sakhalin Energy Investment Company Ltd. was established in April 1994 to carry out the implementation and development of the Sakhalin II project — Russia’s first project to be realized under the terms of a production sharing agreement.
The project covers two fields, Piltun-Astokhskoye, primarily an oil field, and Lunskoye which is primarily a gas field. Under the Agreement, entered into by the Sakhalin Oblast, the Russian Federation and Sakhalin Energy in 1994, direct investment in the project will amount to about $10 billion.
First oil was produced in July 1999, from the Piltun-Astokhskoye field, with the first export of crude in September 1999. The project will now move to gas field development and LNG plant construction phase, once gas sales agreements are in place.
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