Rosnet Acquires Danilovsky Block License in Siberia

MOSCOW, Jun 07, 2006 (Dow Jones Commodities News Select via Comtex)

Russian oil producer OAO Rosneft (RNT.YY) won an auction for exploration and development license for the Danilovsky oil and natural gas block in eastern Siberia, a company spokesman said Wednesday.

The company agreed to pay 1.2 billion rubles ($1=RUB26.73) for the license, located in the Irkutsk region, the spokesman said.

Danilovsky is estimated to hold about 70.7 million tons of oil according to Russian D1 classifications, which indicate a low degree of geological certainty, and 57 billion cubic meters of gas, Russian news agency Interfax reported.

Rosneft is planning an initial public offering for July through which the company aims to raise about $10 billion. Rosneft's proven reserves of oil and natural gas rose 18% last year, cementing its status as one of the world's largest energy companies in the run-up to its IPO.

The company's proven reserves of oil and gas came to 18.94 billion barrels of oil equivalent. Almost all of the gain came from increased reserves of natural gas, which more than tripled to 732 billion cubic meters at the end of last year.

(C) 2006 FWN Select. All Rights Reserved


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