Sakhalin Island: Journey To Extreme Oil

With their home reserves depleting fast, the big Western giants are increasingly compelled to go to any extreme to find new oil and gas. Sakhalin Island is about as extreme as they come.

The 600-mile-long strip of mountains and forests off Russia’s Far East is as good a vantage point as any to see the international oil industry’s future and the challenges it faces. Big Oil is having to place ever bigger bets to get the reserves it needs. As a result immense new landmarks — drilling platforms, pipelines, and liquefied natural gas facilities — are rising through the mists of this forbidding island. An estimated 45 billion barrels of oil equivalent lie beneath the icy seas off its shores, a figure rivaling what remains in the U.S. or Europe. But developing those resources is proving lengthy, difficult, and expensive. Cost overruns have been huge, and no one knows if the Russians will end up controlling the assets now being built.

Business Week