Sakhalin-1 Project: Delivering Excellence in Project Execution

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Case Details:

Case Code : OPER093
Case Length : 26 Pages
Period : 1993-2009
Organization : Exxon Neftegas Limited / Sakhalin-1 consortium
Pub Date : 2010
Teaching Note :Not Available
Countries : Russia
Industry : Oil & Gas Industry

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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"The key to maximizing resource value lies in the ability of a global organization to apply leading-edge technology and deliver excellence in project execution. Nowhere is this truer than in the challenging Russian Arctic, where ExxonMobil is proud to be associated with Sakhalin-1 – one of the most ambitious projects industry has ever undertaken."1

- JB McNeil , vice-president, ExxonMobil Development Company in 2008.


In December 2008, the American oil and gas company ExxonMobil Corporation's2 (ExxonMobil) oil and gas development project in Russia3, the Sakhalin-1 project received the Excellence in Project Integration Award from the committees and sponsoring societies of the International Petroleum Technology Conference4 (IPTC). The award was given to the company for effectively implementing the first phase of the Sakhalin-1 Project through the application of modern production engineering techniques, geoscience knowledge, construction and facilities engineering practices, health, safety, and environmental processes, human resources policies, community development, and collective teamwork. Commenting on the achievement, Mark Albers, senior vice president of ExxonMobil, said

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1] "Sakhalin 1- A New Frontier,"
2] Based in Irving, Texas, ExxonMobil Corporation is one of the world's largest oil & gas companies. It is involved in the exploration, production, transportation, and sale of crude oil and natural gas. The company markets fuels and lubricants under three brands - Esso, Exxon and Mobil. For the year ended 2008, the company's revenues were US$ 477.35 billion.
3] Prior to 1991, Russia was the largest republic in the Soviet Union (USSR). The troubled economic conditions together with political turmoil led to the dissolution of the Soviet Union in 1991 into fifteen separate countries. As a result, Russia together with the Ukraine and Belarus formed the Commonwealth of Independent States which was later joined by other Soviet republics.
4] The IPTC 'Excellence in Project Integration Award' recognizes companies which successfully execute multi billion oil and gas industry projects. The International Petroleum Technology Conference (IPTC) is an international oil & gas conference and exhibition. IPTC addresses key challenges and issues plaguing industry specialists in the gas sector world over. The third edition of the IPTC was held from 3-5 December 2008 at the Kuala Lumpur Convention Center and was hosted by PETRONAS, the national petroleum corporation of Malaysia. About 7,568 participants from 57 countries attended the event.


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