OREANDA-NEWS. April 17, 2009. Russian authorities approved the 2009 budget for the Sakhalin I project at nearly USD 2 bn and authorized the project’s shareholders to spend another USD 1.5 bn as an addition to the 2008 budget, thus putting an end to lengthy discussions which have held up the implementation of a major Russian O&G project.

The administration of the Sakhalin region posted a press release on its website Thursday quoting Sakhalin Governor Alexander Khoroshavin who confirmed the Energy Ministry’s recent report on approved tariffs and released some figures. For a long time, the budget for the Sakhalin I project had been the subject of controversy due to differences between state officials and the project’s operator, Exxon Neftegas Limited (ENL), a subsidiary of the American oil giant, over estimates for the cost side.

The official cost estimate is subject to approval by a specially authorized state body, which along with the project’s shareholders include representatives from the Russian Energy Ministry. This February Exxon Neftegas Limited said it began to phase out development operations at some of the project’s fields as cost estimates for 2008-2009 lacked approval.