Rosneft to Move Forward with Development in East Siberia

On Feb. 29, at an auction held in Irkutsk, Rosneft won a right to develop reserves of the Umotkinsky hydrocarbon area of Irkutsk oblast.

The Company offered 1 billion 120 million rubles for the area against a starting price of 200 million.

So far, the area has a small line grid and one well drilled. The area is located in the Katangsky district of the oblast, with poorly developed economy and infrastructure. Along the area's east boundary flows the navigable Lower Tunguska river, with VSTO pipeline passing 200 kilometers and the nearest railway running 650 kilometers away.

Rosneft has been competing for the right to develop this area because the reserves located close to those it already owns in Irkutsk oblast are vital for the company. The existing reserves belong to the East-Sugdinsk region with adjacent Preobrazhensky, Danilovsky, Mogdinsky and Sanarsky areas. Additionally, Rosneft is a shareholder in ОАО Verkhnechonskneftegaz, which holds a license on the Upper-Chonsk field. ООО Vostok Energy, a JV with the Chinese CNPC, owns licenses for West-Chonsky and Upper-Chonsky areas.

Rosneft estimates Umotkinsky area recoverable reserves at 17.1 million toe, while total area reserves are estimated to be 102 million toe.