Flush with Kovykta Victory, Gazprom Eyes Sakhalin-1

Russian gas giant OAO Gazprom took aim at Exxon Mobil Corp.’s Sakhalin-1 project Tuesday, only days after wresting control of a huge Siberian gas field from BP PLC.

Deputy Chief Executive Alexander Medvedev, the man responsible for Gazprom’s export policy, said the Exxon-led consortium’s plans to export gas to China were unrealistic and should be coordinated with its own ambitious plans for the region, instead of disrupting its own negotiations with prospective Asian buyers.

“Even small volumes (of competing gas) can sow confusion in the minds of importers,” Medvedev told a press conference, stressing that the scale of Gazprom’s plans – which includes 60 billion to 80 billion cubic meters a year of exports to China, requires intense coordination.

A move against the Sakhalin-1 project, which currently produces 250,000 barrels of oil a day, would inevitably be seen as a continuation of an unspoken government campaign against a raft of deals done in the 1990s, when western oil companies took advantage of low global oil prices, and near-anarchy in Russia, to secure a number of extremely lucrative projects.

RigZone