Exxon Calls for Sakhalin-1 Exports

LONDON -- ExxonMobil believes Russia should allow it to export gas from its Sakhalin-1 project because, contrary to Gazprom's claims, the gas is not needed for the local market.

"We are currently supplying the local market and fulfilling all of the local market's capacity needs," said Robert Olsen, Exxon's head of oil and gas production for Europe, the Caspian and Russia.

"The local market, I don't believe, is any way large enough to absorb the full development of Sakhalin-1."

Exxon signed a preliminary agreement to sell gas to China in 2006 and planned to supply this via pipeline.

Gazprom asked the government in June to block Exxon from selling Sakhalin gas in Asia, saying the output was needed for the domestic market.

Gazprom is the majority shareholder in the Sakhalin-2 project, also off the coast of Sakhalin island.

"We are optimistic that that reserve will ultimately find a marketplace that is attractive," Olsen said.