Sibneft Strikes Oil in Chukotka

Moscow, April 15, 2004. Sibneft today announced that is has found significant quantities of oil during exploratory drilling at the Verkhne-Telekaiskoye oil and gas condensate field, located 130 km southwest of the city of Anadyr in Russia’s Chukotka Autonomous District. Estimated proved recoverable reserves at the field total 2.2 million tons (16.4 million barrels) of oil equivalent. Work on the Verkhne-Telekaiskoye field began in July 2003.

Sibneft holds licenses for three onshore sites in Chukotka, as well as for three offshore fields in the adjacent Bering Sea. The company has been conducting exploration work in the region since 2001, drilling a total of three wells. One of them, located in the Anadyr basin, was the first ever offshore well drilled in Russia’s sector of the Bering Sea. To date, Sibneft has spent approximately 2 billion rubles on oil exploration in Chukotka.

Sibneft plans to carry out 3D seismic exploration work on the Verkhne-Telekaiskoye field and the nearby Verkhne-Echinskoye field. Seismic data will help the company to gain fuller insights into the fields’ structures and to refine plans for future development of the sites.

In addition to oil exploration in Chukotka, Sibneft plans to bring online this summer the region’s Zapadno-Ozernoye natural gas field, which has recoverable reserves of five billion cubic meters.