UPDATE 1-Russia cuts Sakhalin-1 2012 funds to $2.89 bln-source

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By Olesya Astakhova

MOSCOW Dec 30 (Reuters) - Russia has approved a 2012 budget of $2.89 billion for the ExxonMobil-led Sakhalin-1 oil project, down from $3.26 billion for this year, an industry source told Reuters on Friday.

He didn't explain the reason for the budget cut.

The project consists of three offshore oilfields that were initially tapped to meet rising demand in the Asia-Pacific region.

Exxon and Japan's Sakhalin Oil and Gas Development Co Ltd (Sodeko) each hold 30 percent stakes in Sakhalin-1, while Russia's state-owned oil company Rosneft and India's ONGC own the remaining 40 percent.

The project is expected to produce 7.4 million tonnes of oil and 9.1 billion cubic metres (bcm) of gas this year, compared with 7.0 million tonnes and 8.1 bcm in 2011.

ExxonMobil was not immediately available to comment. (Reporting by Olesya Astakhova; Writing by Vladimir Soldatkin; Editing by Jon Loades-Carter)