Prospects for Oil and Gas Development in Russia's Sakhalin Oblast

Abstract

This paper examines the oil and gas industry of Sakhalin Oblast and its offshore areas, as well as the status of major investment projects. Sakhalin is the site of two of Russia's largest oil development projects with Western companies, both envisaged as major multibillion-dollar ventures. Both projects are described in detail, and remain contingent upon enactment in Russia's parliament of key pieces of oil legislation, most importantly a law on production sharing. The paper argues that even if such changes in Russia's legal and fiscal environment are forthcoming, the profitability of these projects remains uncertain, with actual development far from assured. 1 map, 2 tables, 11 references.