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. Last Updated: 07/27/2016

U.S. Majors Lose Status in Sakhalin

ExxonMobil and ChevronTexaco will not have a "priority right" to an oil field off the Pacific coast after the government canceled their claims to the project this year, Natural Resources Minister Yury Trutnev said Monday.

The government will auction the Sakhalin-3 fields next year, Trutnev told reporters. Russia in January canceled the two U.S. companies' rights to the Kirinsky field off Sakhalin Island because they had not developed the project since it was awarded to them in 1993. The companies had sought to negotiate production-sharing agreements to limit their tax liability.

Sakhalin-3 holds a total of 4.1 billion barrels of estimated oil reserves, more than the output of Russia. The fields also hold 1.5 billion cubic meters of gas reserves, enough to fuel the United States for more than two years.

Rosneft, the state-owned oil producer, and Korea National Oil Corp., a South Korean government-controlled explorer, last week said they won the right to explore Sakhalin-3's Veninsky deposit.

In 1993, Mobil, now part of ExxonMobil, won the right to 33 percent of Kirinsky. Texaco, now part of ChevronTexaco, also won 33 percent.

Gazprom, which last week agreed to take over Rosneft for stock, has said it plans to become a partner in Sakhalin-1, another oil and gas field off Sakhalin.

ExxonMobil, the world's largest investor-owned oil producer, leads the $12 billion Sakhalin-1 venture, which plans to start pumping crude in mid-2005.