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Gold/Mining/Energy : Strictly: Drilling and oil-field services -- Ignore unavailable to you. Want to Upgrade?

To: Frank Pembleton who wrote (92292)	7/16/2001 7:08:06 AM
From: Frank Pembleton	Read Replies (2) \| Respond to of 95453

Slavneft Gushes Over Huge Find in East By Anna Raff Staff Writer Out in Eastern Siberia, Oleg Puzanov knew it was there. He also knew that it was up to his team to find it. On July 3 they did, and it was bigger than expected. That morning, Puzanov received a telephone call from the Kuyumbinskoye oil field in the Krasnoyarsk region. On the other end was news that Slavneft's well No. 217 had blown a "fountain," a rapid flow of oil of which legends are made. "It was more than just a joyous occasion," said Puzanov, who directs one of Slavneft's exploration subsidiaries. "This proves without a doubt there is real, profitable oil in Eastern Siberia. But now comes the difficult question: How are we going to get it out?" Well No. 217 has a flow rate of 500 tons, or 3,650 barrels, per day, 30 times higher than Russia's average, Slavneft officials said. Because the company is still exploring its licensed territories, all oil found is being burned. For now, there is nowhere to put it. The closest sign of civilization is hundreds of kilometers away, and more important, so is Transneft's pipeline that could feed this oil to other parts of Russia and beyond. "It will take half a billion dollars to get a pipeline out there," said vice president Andrei Shtorkh. And that's just the pipeline. To build a basic infrastructure — including roads, railroads and pumping stations — Slavneft will have to find $1.5 billion. This is a tall order for Russia's eighth-largest oil company, which posted a $320 million profit last year. Slavneft, whose controlling shareholder is the government, is already in negotiations with No. 2 Yukos and may form a production alliance in Eastern Siberia. Earlier this year, Yukos acquired a controlling stake in East Siberia Oil Co. and plans to invest billions of dollars in the region. "We have been talking to Yukos through informal working groups for some time," Shtorkh said. "Perhaps it's time for something more official." Slavneft also hopes to attract major Western players, which the company deems necessary for a project of this size. Recoverable reserves in the region are estimated at 365.7 million tons, or 2.7 billion barrels. Oil was struck in the region as early as 1977, but all exploratory work was stopped in 1982 after Soviet geologists drilled a series of wells that offered no oil. In 1996, Slavneft won a tender for licenses to several blocks in the Krasnoyarsk region and has so far spent $70 million on exploratory work. "This fountain is a sign for the industry," said Slavneft vice president Sergei Bakhir. "We're moving east." themoscowtimes.com