Under terms of this Agreement, Siberian Energy Group has transferred its 100% ownership interest in OOO Zauralneftegaz, its Russian subsidiary ("ZNG"), holding these four licenses, to a newly created joint venture company, Zauralneftgaz Ltd ("ZL"). Siberian Energy Group will hold a 50% interest in ZL. Additionally, in exchange for operating ZL and funding ZNG's operations, BPL will hold the remaining 50% interest in ZL. Siberian Energy Group will have no further financing obligations for this joint venture company. This Joint Venture was arranged by Alternative Energy Finance Ltd. David Zaikin, Chairman and CEO of Siberian Energy Group, stated, "We have gained great respect for our new colleagues at Baltic Petroleum during these past months of due diligence. Baltic Petroleum's team of expert geologists and petroleum engineers have demonstrated strong expertise and commitment needed to successfully explore and develop these potentially major fields in Kurgan, Western Siberia."
Simon Escott, CEO of both Baltic Petroleum and ZL, enthusiastically stated, "We are very excited by the prospects of the Kurgan and keen to prove up its reserves. We look forward to working with our Russian partners for the benefit of all stakeholders in this venture."
Simon Escott, BPL's Chief Executive Officer, has over thirty years of experience in the Oil & Gas Sector having held senior consultancy positions in ESSO, BP, Phillips Petroleum, Elf, Pennzoil, Norsk Hydro, Saga Petroleum and the World Bank amongst others, and has significant experience of managing and operating start-up oil & gas projects and construction projects in Russia and the FSU.
BPL's management team has over one hundred and twenty years of experience in the oil & gas industry, many of which have been spent operating in Russia and the FSU working for major international oil companies and on World Bank Rehabilitation Projects 1 and 2. The management team, several of whose members have worked together for many years, has diversified experience including project management, construction, oil field development, transport & trading of oil & gas products, business development and engineering.
Baltic Petroleum's major shareholders are two specialist funds managed by RAB Capital Plc (www.rabcapital.com) with over $ 2.2 billion under management as of June 2005.
Tim Peara, Managing Director of Alternative Energy Finance and Vice Chairman of Siberian Energy Group commented, "By concluding this joint venture Siberian Energy Group has gained a significant partner, while Baltic Petroleum has gained access to a wonderfully promising asset in a virgin territory. Investors should be pleased to have such a technically qualified, experienced and well-funded oil & gas venture to tackle the Kurgan fields."
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