TNK-BP has commenced deliveries of crude oil produced at the Verkhnechonskoye field (VC) to the East Siberia-Pacific Ocean Pipeline (ESPO). The first batch of VC production was delivered to the Transneft metering unit at the entry to the ESPO on October 15, 2008.
This marks the beginning of commercial production at VC. TNK-BP and Rosneft are the major shareholders of Verkhnechonskneftegaz (VCNG), the operator of the project.
In 2008 production at VC is expected to reach 2,500 tons per day. In 2009, the project will produce in excess of 1 million tons.
Cumulative investment in the project has now reached $1 billion, with further investment of $500 million planned for 2009.
TNK-BP Chief Operating Officer Tim Summers said, "The first shipment of VC crude into the ESPO marks an important event for TNK-BP and for the industry. We are establishing a major new production center in East Siberia. Application of world-class technology and the timely launch of the ESPO pipeline allowed us to begin commercial development of this project, which has been deemed uneconomic for the past 30 years. The beginning of regular commercial shipments from VC to the ESPO marks the emergence of East Siberia as a new and important oil and gas province in Russia."
On behalf of the leadership of the company, Sergei Kudryashov, First Vice President of Rosneft, expressed satisfaction that despite complexities of the project, joint efforts of TNK-BP and Rosneft had led to the launch of commercial production at Verkhnechonskoye.
"East Siberia is an area of strategic interests for Rosneft. Our plans are also based on the fact that it is the resources of East Siberia that will allow Rosneft to keep its leading place in the industry, and Verkhnechonskoye is one of our footholds in the region," Sergei Kudryashov said.
The VC field is located in the Irkutsk Region, 1100 km north-east of the city of Irkutsk. The field was discovered in 1978, the area of the field is 1,500 sq km.
As of the end of 2007, Total Proved Reserves of Verkhnechonskoye were 409 million barrels of oil equivalent, applying SEC methodology on a life of field (LOF) basis. Under PRMS (formerly SPE) criteria, Total Proved Reserves were 776 million barrels of oil equivalent. Proved, Possible and Probable (3P) Reserves amounted to 1.886 billion barrels calculated per the PRMS methodology.
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