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article imageRussian company and ExxonMobil launch unique drilling rig

By Ken Hanly     Jun 28, 2014 in Business
Moscow - Russian company Rosneft together with ExxonMobil have launched a unique platform with the world's most powerful drilling rig in the Okhotsk Sea
The drilling rig called Berkut or Golden Eagle is designed to work in harsh subarctic conditions. The platform can withstand temperatures to minus 44 Celsius, waves up to 18 meters high, and an earthquake of magnitude 9 according to Rosneft president Igor Sechin. It can also withstand ice floes up to two meters thick. The superstructure of the rig is the largest in the world weighing 200,000 tons. Berkut is located 25 km from the shore. There were no accidents or any critical failures while the rig was being constructed. The rig was also completed on schedule and within the projected budget. A photo of the Gravity Base Structure is shown here in port. The upper part of Berkut was transported in hauling mode approximately 2600 km from a Korean shipyard without incident
Russian president Putin started the platform through a video link from the Kremlin saying:"Thanks to such projects as the Berkut platform, we can use the richest but difficult to access fields, create new production and job opportunities, and strengthen the social and economic development of the Far East...The project has undergone the harshest environmental requirements. The platform meets it, which is a separate achievement,"
The platform was produced by the Sakhalin-1 Consortium created on Product Sharing Agreement(PSA) terms agreed to back in 1996. There are several participants including Rosneft and ONGC Videsh(India) who each hold 20 per cent. ExxonMobil and Sodeco the Japanese Sakhalin Oil Development Co. each have a 30 per cent share.
The total cost of the project is estimated to be between $10 and 12 billion. The project represents the largest foreign investment in Russia. Three oil fields off Sakhalin Island in the Sea of Okhotsk are to be developed. Exploitation at the Arkutun-Dagi field using Berkut is expected to start by the end of this year and add up to 4.5 million tons to the annual Sakhalni-1 total yearly total extraction. Last year the project produced 140,000 barrels of oil per day.
Igor Sechin the head of Rosneft is a close ally of Putin and is on both the US and EU lists of individuals sanctioned. President Putin said in May that Russia might reconsider the participation of western companies in the Russian economy and that included energy projects. At the same time, he praised the cooperation with ExxonMobil when he started the Berkut from Moscow. However, the situation has led to rumors that ExxonMobil could pull out of the project. An Exxon official responded:
"These rumours are groundless. This situation (sanctions) has neither an effect on our activity in Russia, nor on our investment plans in Sakhalin-1. We have no other plans than to go ahead with the project".
There are also plans to construct LNG (liquefied natural gas) terminals for export to Asian markets.
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