ONGC carries Rosneft development cost at Sakhalin

Vol 5, PW 2 (14 Mar 01) News in Brief

First we learn ONGC Videsh is paying over the odds for its stake in the Sakhalin-I development in Russia, now we learn it will also pay Rosneft's share of the development programme.

We don't know exactly how much OVL has agreed to carry, but we know the Russian company will pay OVL interest at market rates for the money it borrows. Next month OVL pays the first $350m tranche of a $1.7bn payment to acquire 20% of Rosneft's 40% stake in the Sakhalin-I consortium, which includes ExxonMobil (30%) and Sodeco ofJapan (30%).

We learn OVL has agreed to finance Rosneft's share of the development programme until the field begins to generate cash.