Russia's Energy Ministry has approved the budget of the Exxon Mobil Corp. (XOM)-led Sakhalin-1 project, a consortium operating oil and gas fields on Russia's Pacific coast, the ministry said Friday.
In terms of the production sharing agreement, or SPA, by which Sakhalin-1 operates, an authorized state body must approve the budget and working plans, but had until now refused to sign off this year's budget as well as additional costs for 2008.
In February, Exxon Mobil said it was forced to suspend some work, as well as future phases of the project, because the consortium didn't want to risk spending funds it would then be unable to recover.
In 2007, Royal Dutch Shell (RDSA) had to give up control of the neighboring Sakhalin-2 project to state-controlled gas firm OAO Gazprom (GAZP.RS), after it came under pressure from the Russian authorities.
Sakhalin-1, in which Exxon Mobil and Japan's Sodeco hold 30% stakes and Russia's OAO Rosneft (ROSN.RS) and India's ONGC Videsh Ltd. each hold 20% stakes, comprises three offshore fields - Chayvo, Odoptu and Arkutun-Dagi.