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. Last Updated: 07/27/2016

Sinopec and Rosneft to Start Drilling Sakhalin-3 Next Year

Sinopec, China's second-biggest oil company, will start drilling the Sakhalin-3 offshore area with Rosneft next year as the companies increase output to meet domestic energy demand, the Beijing-based producer said Thursday.

Sinopec, as Chinese Petrochemical is known, and Rosneft plan to complete 700 square kilometers of seismic survey in the Sakhalin-3's Veninsky block in the second half of this year, the producer said. Drilling work will start in the second half of 2008, Sinopec said.

Sakhalin is Russia's newest oil province, where two projects have attracted more than $30 billion in investment from companies including ExxonMobil and Shell. State-owned Rosneft, which signed the exploration accord with Sinopec in March, is competing with Gazprom to supply nearby Asian markets.

Russia aims to increase output from Sakhalin by as much as fivefold by 2010, Sinopec said Thursday. Annual production will reach 21 million tons of oil and 31 billion cubic meters of natural gas by then, the Chinese oil producer said.

Rosneft owns 74.9 percent of the joint venture, called Venin Holding, the Russian company said March 29. Sinopec owns the rest.

Venin Holding will own a company that will hold the license to develop the Veninsky sector of Sakhalin-3, Rosneft said then.

Veninsky holds estimated reserves of 258.1 bcm of gas and 169.4 million tons of oil, Rosneft said.

Sinopec is the parent company of Hong Kong-listed China Petroleum & Chemical Corporation, Asia's biggest oil refiner.

Oil companies in China are boosting spending on domestic and overseas explorations to meet rising energy demand in the country.