Russian oil to reach India in Q2FY07

India will receive its first shipment of oil from Russia's Sakhalin-I field from the second quarter of 2006.

The field, where ONGC Videsh (OVL) holds 20% stake and has invested more than $2.7 billion, began producing oil and gas earlier this month.

"The limited production from the field currently is being sold locally (in Russia). From Q2CY2006, we expect 50,000 barrels a day of output, and we plan to ship our share of production to India," R S Butola, MD of OVL, said today.

Sakhalin crude, which is low in sulphur, can either be shipped directly to India or be swapped with Gulf oil being shipped to Japan or Korea.

OVL had given loans to Rosneft to fund the Russian company's 20% stake in the project as well as paying for its own 20% share of development cost. "Our share of 20% entitles us to 50,000 bpd of
crude oil from the peak output of 2,50,000 bpd. Since we have also financed Rosneft's share, we would get their share of oil as well till the loan is repaid," Butola said.

Butola said the field was initially producing 23,000 bpd of oil and about 58-59 million standard cubic feet of gas per day. Oil production would rise to 50,000 bpd by April 2006 and hit the peak level of 2,50,000 barrels per day by the end of 2006.