Russia's Lukoil Launches Siberian Oilfield As Sanctions Bite

Reuters

IMILORSKOYE FIELD, Russia, Oct 8 (Reuters) - Russia's No.2 oil producer Lukoil launched an oilfield in western Siberia ahead of schedule on Wednesday, a major step in its drive to prop up falling production and to weather U.S. sanctions over Ukraine.

The United States imposed sanctions on Lukoil and other Russian energy companies last month, preventing U.S. firms from supporting the Russian firms' activities in exploration or production in deep water, Arctic offshore or shale projects.

The sanctions have also limited the companies' access to Western capital markets.

"The field is launched, though there are difficulties with raising financing," Chief Executive Officer Vagit Alekperov told reporters at the snow-covered Imilorskoye field.

The Imilorskoye group of fields, where the launch ceremony was held, is 250 km from the town of Kogalym. The group has extractable oil reserves of 194 million tonnes (1.4 billion barrels), and was originally due to be launched in March 2015.

West Siberia is at the heart of Russia's oil industry, the world's largest by output. However, oil production there has been on the decline as fields become depleted.

Lukoil, Russia's largest non-state oil company and controlled by Alekperov and his deputy Leonid Fedun, managed to halt a decline in oil production last year after three straight years of decreasing production thanks to new assets in Russia.


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