Fourteen crew members were rescued alive from the Kolskaya jack-up rig, two bodies were recovered, and the other 51 crew members were missing. The rig was operated by the Russian exploration company Arktikmorneftegazrazvedka.
According to reports from the scene of the rescue operation, the Kolskaya platform has sunk completely, the local head of the Emergencies Ministry, Taimuraz Kasayev, said at a news briefing in Yuzhno-Sakhalinsk.
Agencies quoted officials as saying the rig capsized at about 2 a.m. GMT on Sunday (9 p.m. EST on Saturday) about 200 kilometers (125 miles) off the coast of Sakhalin as it was being towed from the eastern peninsula of Kamchatka.
It appeared that the vessel had not been doing drilling work, so no oil spill was likely. The rig's destination was not immediately clear.
While less serious than BP's Macondo disaster, when a blowout caused oil to spew for months into the Gulf of Mexico, the fatal accident may deal a blow to Russia's efforts to boost offshore oil-and-gas exploration.
Russia has two major offshore projects that are already producing oil off Sakhalin: Sakhalin-1, operated by the Exxon Mobil Corp., and Sakhalin-2, in which state-controlled gas exporter Gazprom has a controlling stake.
State-controlled Rosneft this year reached a major deal with Exxon Mobil to explore for oil and gas in the Arctic Ocean's Kara Sea.
(Reporting by Douglas Busvine; editing by Tim Pearce)