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Russia to auction oil prospects sought by Exxon Mobil

Russia will auction off Far East oil prospects that Exxon Mobil Corp. sought to include in its $17 bln Sakhalin-1 project.

The government is reviewing the boundaries of the prospects, off Sakhalin Island under the Sea of Okhotsk, and will sell them by July, said Pyotr Sadovnik, deputy head of the Natural Resources Ministry's subsoil agency. Exxon, the world's biggest oil company, had lobbied for the right to expand the boundaries of the Chayvo and Odupto fields, part of its Sakhalin-1 project, to include nearby discoveries. In September, the Natural Resources Ministry said new prospects would be offered at auction. Sakhalin-1 is part of Exxon's plan to boost daily output by 23% to the equivalent of 5 million barrels by the end of the decade. Output reached 250,000 barrels of oil a day in February. The Natural Resources Ministry's environmental inspectorate will begin checking Sakhalin-1 this month. The same inspectorate threatened to derail Royal Dutch Shell Plc's $20 billion Sakhalin-2 venture next door until December, when Shell and its Japanese partners agreed to sell control of the project to state-run OAO Gazprom. Sakhalin-1, which also includes the Arkutun-Dagi field, holds an estimated 2.3 billion barrels of crude oil and 17.1 trillion cubic feet of gas. Exxon's partners in Sakhalin-1 are Russia's state-run oil company, OAO Rosneft, a Japanese group known as SODECO, India's Oil & Natural Gas Corp. Russia plans to hold 300 auctions for oil and gas deposits this year, compared with 269 last year, Sadovnik said. (Bloomberg)