Mobil and Texaco Sign Agreements with Rosneft

6 August 1998

Mobil and Texaco Sign Agreements with Rosneft and Rosneft-Sakhalinmorneftegaz on Participation in Sakhalin Projects

    FAIRFAX, Va.--Aug. 6, 1998--Mobil Corporation and Texaco Inc., announced today that affiliates, Mobil Sakhalin Neftegaz Inc., and Texaco Exploration Sakhalin Inc., signed a number of agreements with affiliates of oil companies "Rosneft" and Open Joint Stock Company "Rosneft-Sakhalinmorneftegaz" to include them in the Sakhalin III Kirinskiy Block project, the rights to which were obtained through the Sakhalin III Bid Round in December 1993.
    The agreements were signed in Moscow on Tuesday, August 4.
    In accordance with the terms and conditions of the agreements, the two Russian companies will hold a one-third interest in equal shares and Mobil and Texaco will each retain a one-third interest.
    PegaStar Neftegaz Limited Liability Company has been formed and will be the operating company in conducting exploration, development, and production in the Kirinskiy Block under a Production Sharing Agreement.
    The companies have concurrently agreed to jointly appraise and potentially bid in the anticipated tender for the Sakhalin VI (Pogranichny Block) area which is located adjacent to and south of the Kirinskiy block.
    PegaStar will unite the technological and operational capabilities, and the financial strengths and managerial experience of all four companies. This signing marks an important step to achieve large-scale development in the Arctic environment offshore Sakhalin Island.
    The inclusion by the end of 1998 of the Kirinskiy Block on the list of fields for development allowed under a production sharing agreement would allow exploration drilling activities to commence as early as 1999.
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