The Sakhalin-I fields, where ONGC Videsh Ltd has 20 per cent stake, began producing oil and gas earlier this month.
Petroleum Minister Mani Shankar Aiyar, who was present along with Russian Energy Minister Viktor Borisovich Khristenko when the valves were opened, said OVL had given loans to Rosneft to fund the Russian company's 20 per cent stake in the project as well as paying for its own 20 per cent share of development costs.
"Our share of 20 per cent entitles us for 50,000 barrels per day of crude oil from peak output of 250,000 bpd. But since we have also financed Rosneft's share, we would get their share of oil as well till the loan is repaid back," he said on October 1 on Sakhalin Island.
India, which imported 76 per cent of its crude oil requirement last year, is seeking stakes in overseas fields such as Sakhalin to feed the nation's 7 per cent annual economic growth.
OVL managing director R S Butola said the field would initially produce 23,000 barrels per day of oil and about 58-59 million standard cubic feet of gas per day.
Oil production would rise to 50,000 barrels per day by April 2006 and hit the peak level of 250,000 barrels per day by 2006 end. Gas production will rise to 200 million standard cubic feet per day by next year, he said.
The total spending on Sakhalin-1 has so far exceeded $4 billion, Stephen Terni, president of Exxon Neftegas Ltd, the project's operator, said.
OVL, the overseas arm of Oil and Natural Gas Corp, purchased a 20 per cent stake in Sakhalin-I project for $1.7 billion in 2001. In November 2003, India had approved $1.1 billion of additional investment in Sakhalin-I.
ONGC Videsh plans to ship around 7,00,000 barrels of oil from Sakhalin-I fields to India every 70 days from April 2006. This would be India's first shipment of equity crude oil from the Russian fields, officials said.
The Sakhalin-I consortium, comprising Exxon Neftegas Ltd (the operator) - 30 per cent, Japanese Sodeco - 30 per cent, Russian RN-Astra LLC - 8.5 per cent and Russian Sakhalinmorneftegaz-Shelf - 11.5 per cent, has already hired five ice class tankers on long-term charter.
Tankers would be delivered next year and OVL would hire one of them for transporting its share of output of around 50,000 bpd (April-November 2006) to India.
The Sakhalin-I field is expected to produce about 12.5 million tonnes of oil and 10 billion cubic meters of gas annually at its peak production level, of which OVL's share would be 20 per cent, in proportion to its equity.
The total production of Sakhalin-I in its 40-year life cycle is estimated at 307 million tonnes of oil and 485 billion cubic meters of gas.
The Sakhalin-I project includes the Chayvo, Odoptu and Arkutun-Dagi fields. Over the 40-year life of the project, plans call for producing 2.3 billion barrels of oil and 17 trillion cubic feet of gas.
