Exxon Mobil's subsidiary, Exxon Neftegas Limited, has commenced production from the multiphase Sakhalin-1 Project offshore Eastern Russia with the intension to be pumping 50,000 barrels a day by the end of 2005.

Beyond 2005, US oil and gas producer ExxonMobil has forecast 250,000 barrels a day of oil by year-end 2006 from the field and associated domestic gas sales, which will start at about 60 million cubic feet per day, of about 250 million cubic feet per day by the end of the decade.

The Sakhalin-1 project, representing one of the largest single foreign direct investments in Russia, involves the construction of both offshore and onshore facilities as part of its initial development phase. These include the world’s largest land-based drilling rig, an offshore platform that provides drilling capacity for up to 20 wells, processing facilities and an associated 140-mile crude oil pipeline.

Initial natural gas production will be sold to two domestic customers OAO Khabarovskenergo and OAO Khabarovskkraigas. The buyers will transport the gas to the Khabarovsk Krai through the pipeline systems of Rosneft-Sakhalinmorneftegas and Daltransgas. The potential exists for export of additional gas volumes by pipeline to buyers in Asia.

Meanwhile, initial oil production will be sold into the Russian domestic market, then upon completion of the DeKastri oil terminal and pipeline, oil will be sold to international markets by mid-2006.