Huge Siberian Field to Produce 1MM Tons of Oil, Boost Production in '09

The oil company Verkhnechonskneftegaz, developing the Verkhnechonskoe oil and gas condensate field, one of the largest fields in Eastern Siberia, is going to produce 1 million tons of oil in 2009 and raise its annual production of hydrocarbons up to 7-8 million tons by 2014, Igor Rustamov, General Director of Verkhnechonskneftegaz, said to journalists on Tuesday.

The volume of oil production in the Verkhnechonskoe field in 2008 will amount to approximately 150,000 tons. Oil will be supplied to the Eastern Siberia – Pacific Ocean pipeline, to which the field was connected in October 2008.

Now, according to Rustamov, the four drilling rigs working in the Verkhnechonskoe field can drill up to 35 wells a year. Rustamov said that 26 wells were drilled in the field in 2008 and 34 wells will be drilled in 2009. He reminded that the oil price was expected to be at the level of $50-80 per barrel at the time when the company started industrial development of the field. Rustamov explained that the company will start using its anti-crisis program if the oil price drops below $50 per barrel. “A part of the expenditures planned for 2009 may be carried over to 2010,” he specified.

Verkhnechonskneftegaz is going to spend $426 million in 2009 for development of its infrastructure.

Verkhnechonskneftegaz was established in 2002 for development of the Verkhnechonskoe oil and gas condensate field. TNK-BP owns 62.71% of shares of the company and Rosneft 25.94%. The reserves of the Verkhnechonskoe field amount to 201.6 million tons of oil (C1+C2), 95.5 billion cubic meters of gas (C1+C2), and 3.3 million tons of gas condensate.