YP Guide
N A L’ S
THE YOUNG PROFESSIO
GUIDE TO
SAKHALIN
THE B ASIC S
Sakhalin is the largest island in Russia.
This fact alone makes locals proud, as
they are the residents of the biggest
island in the largest country in the
world. Located in the Russian Far East,
it is separated from the mainland by the
narrow and shallow Strait of Tartary.
Japan and the Koreas are among the
closest neighbors to the south, and
there are clear historical ties with
those countries involving commercial,
cultural, and geopolitical interests.
Russo-Japanese struggles on
Sakhalin date back to the 19th century
when the first treaty between the two
countries was signed declaring that
both nations could inhabit the island.
Since then Sakhalin changed hands
several times and it became part of the
Soviet Union in 1945. Definitely, such a
unique history leaves an imprint on the
cultural landscape. You can still find a
few buildings from the Japanese period,
such as the Regional Museum in the
capital city of Yuzhno-Sakhalinsk, with
a great exhibition of the island’s natural
surroundings, culture, and history.
Sakhalin has a long history as a
producer of valuable raw materials.
It all started with forestry and fishing,
then it was coal, and now oil and gas.
The katorga was conceived to use
12
prisoners as the main manpower for the
coal mines. Even during late Japanese
period, during World War II, tens of
thousands of Koreans were forcibly
brought to Sakhalin to work in the coal
mines. Nowadays, Korean immigration
represents a significant segment of the
island’s population. But for oil and gas
exploitation, the required manpower
has a more diverse background. People
from all over the world have brought
their technical skills and enthusiasm to
Sakhalin’s world-class energy projects.
The oilfield history of Sakhalin dates
back to 1910, when the first commercial
oil was discovered in the Okha field.
However, the oil boom had to wait for 80
years, the collapse of the Soviet Union,
and Russian economic liberalization
until the necessary technological and
economic resources became available
to develop Sakhalin’s promising, but
challenging, hydrocarbon resources.
So far, a total of 64 fields have been
In the book A Journey to Sakhalin,
the great Russian writer Anton
Chekhov described the island, then
a “katorga”—a penal colony—as a
hellish place. Two centuries later,
Sakhalin has changed in numerous
ways and has become famous
for its enormous hydrocarbon
resources that lie underneath
the island’s shelf. Even with the
considerable infrastructure
investments related to oil and
gas activity, Sakhalin remains a
place of large contrasts: some
may find it a sparsely populated
island whose few cities are
dominated by gloomy concrete
apartment blocks and scarce
roads, while others will enjoy its
spectacular scenery and will keep
in their memory the charming
bubble of the Okhotskoye Sea.
Above: Orthodox Church in the city of Yuzhno-Sakhalinsk.
Photographed by Matthew Angelatos, Lead Geoscientist
in Sakhalin Energy Investment Company.
discovered offshore Sakhalin Island in
the Okhotskoye Sea. Most are located
between 20 and 40 km offshore in
water depths between 25 and 70 m.
An estimated 45 billion BOE lie
beneath the icy sea of the Sakhalin
shelf, a figure that speaks clearly and
loudly of the potential and relevance
of Sakhalin in the energy world.
In recent years, several productionsharing agreements were signed
between a Russian party and major
international oil companies, which are
working together to deliver best-inclass projects. Conditions are harsh
in the Okhotskoye Sea and technical
challenges are cumbersome. This is
a game for firms with expertise and
ability: Russian companies Rosneft and
Gazprom; international giants ExxonMobil,
Shell, and BP; and major service
providers Baker Hughes, Halliburton,
Schlumberger, and Weatherford have
so far lived up to the challenge.
A YP Guide to… is a report on some of the most important oil and gas destinations
around the world. In this section, we share industry information, practical data, and
insider stories from the places where energy is in the air... and in the ground. This
guide is for those planning a relocation, a business trip, attending an industry event,
traveling for pleasure, or just curious about the similarities and differences among
the places in which we live and work. Travel safely and suggest our next stop at
editorTWA@spemail.org. Max Medina and Anton Andreev, Editors, A YP Guide to...
SAKHALIN
AT A G L A N C E
Sakhalin’s SPE section
was established in 1994
Yuzhno has a population of 175,000 and
an SPE membership of approximately
140, with 70% under the age of 25
Nevelsk Breakwater (Central Sakhalin)
is one of the biggest reproductive
rookeries for Steller’s sea lions that can
be easily observed from the seashore
Fifty volcanoes are currently
active in the Sakhalin region
Sakhalin State University
offers a post-graduate petroleum
engineering program
Two 800 km onshore pipelines, which
are part of Sakhalin II, cross more
than 1,000 watercourses and are
among the most complex in the world
More information on SPE activities?
http://sakhalin.spe.org
More information about life on Sakhalin?
www.thesakhalintimes.com
More oil business information?
www.eia.doe.gov/emeu/cabs/Sakhalin/
Background.html
2.0
1.8
1.6
1.4
Million BOEPD
The first offshore oil was produced
in 1998 from the Chaivo field, which is
part of the Sakhalin I project operated by
Exxon Neftegas. This was Russia’s first
experience with offshore developments,
which is quite remarkable for a country
with an extensive oilfield history. Sakhalin
I was developed by a combination of
offshore and onshore extended-reach
wells, which make it unique. Potential
recoverable reserves for this project are
2.3 billion bbl of oil and 17.1 Tcf of gas.
The Sakhalin II project, operated by
Sakhalin Energy Investment Company,
achieved its first oil from the Molikpaq
platform in the Astokh field in 1999. Its
recoverable reserves are estimated at
1.2 billion bbl of oil and 17.4 Tcf of gas. Its
operations spread all the way from the
Offshore production
Onshore production
1.2
1.0
0.8
0.6
0.4
Hydrocarbon
Production
Forecast
0.2
0.0
1985 1990 1985 2000 2005 2010 2015 2020 2025 2030
FIG. 1 Sakhalin’s hydrocarbon production.
island’s northeastern shore with three
platforms to Yuzhno, and further south
to the oil export terminal and liquefied
natural gas (LNG) plant. Assets are
connected to each other by an oil and
gas pipeline system 250 km under water
and 800 km over land. Russia’s first LNG
plant, with an annual capacity of 9.6
million tons, opened in February 2009.
Geologically, Sakhalin belongs to
the early Miocene Sakhalin island arc.
This structure was a result of the Okhotsk
Plate subducting under the Eurasian
plate. Most of the fields are related to
anticlines containing stacked oil and gas
accumulations in a sequence of shallow
marine sandstone reservoirs of Miocene
age at depths between 1100 and 3000 m
subsea. The most relevant technical
features and challenges in Sakhalin are:
•9⅝-in. monobore wells capable of
producing more than 500 MMscf/D
•Record-breaking
extended-reach wells
•Harsh arctic offshore conditions
•Subsea infrastructure on
highly active seismic area
Oil and gas companies have faced some
serious charges from environmental
organizations during development. The
Sakhalin II project changed its offshore
pipe installation route in response to
research showing how this could alter
the behavior of gray whales. Only 35 of
the 130 animals remaining in the area are
thought to be breeding females. Similarly,
a seismic campaign in the Piltun Bay was
suspended to avoid its conjunction with
the feeding season of gray whales.
THE CITY
Yuzhno, also called Toyohara by the
Japanese, means “rich, fertile valley”
and it is the administrative center of
Sakhalin. The booming oil industry has
ensured an abundance of bars, pubs,
cafes, nightclubs and restaurants with
English-speaking staff. Here, “expats”
with different backgrounds have become
part of the island’s everyday life.
The Yuzhno airport has connections
not only to major cities in the Russian
Far East, such as Khabarovsk and
Vladivostok, but also flights to major
Asian hubs. Weekend shopping tours to
Seoul, Beijing, and Tokyo are common.
Sakhalin’s natural scenery is
breathtaking. However, its tourism
industry is mostly undeveloped, which
often entices those looking for virgin
outdoors. If you are moving here for
an extended period of time, the first
thing on your “to do” list should be
to buy an all-terrain vehicle. There
is a lot that Sakhalin may offer to you
beyond the city and you must take
advantage of this unique opportunity.
The island has numerous bird
colonies and serves as a breeding
ground for sea lions. Moneron Island is
a marine park that offers unique diving
attractions. It is not uncommon for
business travelers and tourists to share
their impressions of Sakhalin’s beauty.
Volcanoes towering over the violent
waters of the Pacific Ocean, waterfalls,
geysers and hot mineral springs, and
incredibly rich flora and fauna are among
the most popular topics for discussion
“There is no bad weather; there
are only bad clothes” is an old Russian
saying. Because of the Okhotskoye
Sea’s influence, the weather here
can be quite cold, but milder than in
frosty Siberia. Snowy winters have
made alpine skiing a popular sport.
SAKHALIN’S WAY AHEAD
For Sakhalin’s oil industry, the best is
still to come. Regardless of its relative
maturity, the oil and gas business in this
part of the world is still in its early stages.
Fig. 1 shows the historic and forecast
hydrocarbon production for Sakhalin with
a plateau reaching 1.8 million BOEPD
by 2030. New, demanding worldclass
industry projects will be coming on
stream in the near future. Sakhalin III,
with its estimated resources of 5.1 billion
bbl of oil and 46 Tcf of natural gas, is still
waiting for investors. And this is just part
of the pie. Be sure that in a few years
you will hardly recognize this island
in the Far East of Russia, and hopefully
it will be closer to heaven than to hell.
There is certainly more to tell about this
unique place, but as we all know the
proof of the pudding is in the eating.
Take a chance, land a job, grab your
bags, and come and taste it! TWA
Vol. 5 // No. 3 // 2009
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