Rosneft Banking on New Siberian Oil Discovery
MOSCOW (Dow Jones), Jan. 28, 2010
The discovery of a major oil deposit in East Siberia by Russia's largest oil producer OAO Rosneft could become a new growth driver for the company, analysts believe.
State-controlled Rosneft said Thursday the Sevastyanovo field located in the Irkutsk region could hold more than 150 million tons of oil -- or 1.1 billion barrels -- but declined to provide further details.
Rosneft's shares briefly outperformed the market Thursday morning. At 1544 GMT, the stock had climbed 1.5% to 237.48 rubles each on the Micex Stock Exchange, compared with a 1.1% gain for the Micex Index.
The field could add around 4% to the company's reserves and may eventually produce up to 170,000 barrels a day, analysts estimate.
In August last year, Rosneft launched the huge Vankor field in East Siberia, which helped push 2009 production up 2.3% to 2.26 million barrels a day.
"Sevastyanovo might be the next core growth driver for Rosneft after Vankor, providing the company with further production growth after 2015," said Lev Snykov, an analyst at Moscow-based VTB Capital.
The Sevastyanovo field was discovered in the Mogdynsky block, which Rosneft purchased in 2006 for 1.32 billion rubles ($44 million).
East Siberia, where the Sevastyanovo field is located, holds vast untapped reserves and is considered Russia's new oil frontier, as output dwindles in the country's traditional oil region West Siberia.
The field is located near the East Siberia-Pacific Ocean pipeline, which started operation late last year and is designed to ship Russian oil to Asian markets.
"News of the discovery is positive, as it highlights East Siberia's high reserves potential," said Troika Dialog's Oleg Maximov. "Russia's untapped oil reserves remain significant."
Russia is the world's biggest oil producer with output of more than 10 million barrels a day, or around 12% of global production.
Copyright (c) 2010 Dow Jones & Company, Inc.
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