TNK-BP Awards $3 Billion in Contracts in Western Siberia

Tenders launched in August by TNK-BP have resulted in the award of long-term contracts totaling over $3 billion dollars for drilling and workovers, including $1 billion dollars in long term contracts for TNK-BP’s own drilling and workover companies.

The contracts include 53 long-term drilling and sidetracking rig contracts, 211 long-term workover rig contracts, 26 additional new drilling and sidetracking rigs, and two new international companies, Weatherford and Nabors, introduced into the West Siberian drilling market to increase competition and introduce international technology and standards into the Russian market.

Typically contracts awarded have a term of three and five years – with options for TNK-BP to extend their term further. The contracts will deliver highly competitive prices for TNK-BP, reducing the company’s previously forecast drilling and workover rig inflation expectations and improving safety standards.

The contracts provide TNK-BP with advanced technology drilling rigs for its operations and the capability to drill highly deviated, step-out production wells.

In workovers they will facilitate the introduction of TNK-BP technical standards, the extension of the operating lives of submersible pumps and selective use of specialist fishing and well killing services.

During 2008 separate contracts for specialist drilling services, including cementing, mud fluids, directional drilling, and specialist workover services, including fishing and well killing services, will be awarded.

TNK-BP COO Tim Summers said, “We have now secured the bulk of the rigs needed to deliver our production goals on a long-term basis. Eleven new high-tech drilling rigs and 15 new sidetracking rigs will start to work for us in the course of 2008, enhancing our capability, underpinning performance improvement, reducing the impact of lifting cost inflation and bringing higher standards of HSE and operational efficiency.“

Winners of the drilling and sidetracking rig tenders include Integra Drilling, the Orenburg Drilling Company (OBK), Catobneft (CAToil) and the TNK-BP drilling companies (Nizhnevartovskburneft (NvBN), Nizhnevartovsk Well Repair Company 1 (NPRS-1) and Orenburgburneft (OBN)) as well as Weatherford and Nabors.

Winners of the workover tender are Obnefteremont (Integra Group), Catobneft (CAToil), SKRS (Petroalliance), the Belorussian Well Stimulation and Capital Repair Company, Permnefteotdacha, Incomneft, and the TNK-BP workover companies (Chernogornefteservice and the Capital Workover Company).