The Russian government has approved a 2010 budget estimate of $2.7 billion for the Sakhalin-1 oil and gas project, Energy Minister Sergei Shmatko said on Wednesday.
"Sakhalin-1 budget has recently been approved ... at $2.7 billion. We have seriously reduced the demands of the project operator," Shmatko told the State Duma lower chamber.
Exxon Neftegas, which operates the Sakhalin-1 project under production sharing agreement (PSA) terms, proposed a $3.5 billion 2010 budget, but the government considered it too high and at the end of 2009 approved just $1 billion.
"PSA projects help attract considerable capital for geological exploration," Shmatko said.
The Sakhalin-1 project includes the Chaivo, Odoptu and Arkutun-Dagi deposits, whose reserves are estimated at about 307 million tons of oil (2.3 billion barrels) and 485 billion cubic meters of gas (17 trillion cubic feet).
The projects participants are Exxon Neftegas and Japan's Sodeco with 30% of the project each, while Russia's Rosneft and India's ONGC have 20% each.
MOSCOW, December 8 (RIA Novosti)
