Oil and Gas Internationals on Sakhalin. Shells's cost of the Sakhlin project is within acceptable range.

Cost of Shell's Sakhalin 2 projects in Russia has jumped 20 % t 12 bn.

(PRWEB) June 27, 2004 -- The cost of Shell's Sakhalin 2 projects in Russia has jumperd 20 % to 12 bn under the most recent estimates, a Shell executive said. The increase of, which is due to the weak dollar and a number of lesser factors, is within the acceptable range of such massive projects , said Graham Searle, who helps direct Shells's international exploration and production projects. The cost has gone up to 20% from the original cost estimates. For a project this size, thats within the bounds.

Shell anounced an increase in development costs at Sakhalin. Searle depicts the Sakhalin projects as demanding in ways beyond the technical challenges, which is sighnificant considering the arctic terrane.

Sakhalin 2 is producing some oil, but the bigges part if the project has yet to be constructed. Shell is considereing putting the funding request with the government bodies, such as Export Import Bank of the USA and the European Bank of Recostruction and Development which known to be partially concerned about the endagenred wheals and other environmental and social issues. Shell is considering a preliminary plan that calls for debt financing of 5 Bn. There is no expetations to finalize anything until next year. The project includes construction of the a LNG plant scheduled to begin exports in 2007.

For more information see sources of the companies news releases Shells, Exxon, BP.

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