Sibneft Seals Horizontal Drilling Contract With Deutag

Moscow, 4 July 2001; Sibneft has signed a major drilling deal with German drilling contractor Deutag, a Preussag Group company, as the company moves aggressively to expand its horizontal drilling programme.

Under the 30 million euro contract, Deutag will drill up to ten horizontal wells at Sibneft's Romanovskoye field, from which the company launched production last year. The first well is due to be spudded in summer 2002, with the remainder to be drilled over a two-year period.

Deutag is Europe's leading drilling specialist, offering a wide range of associated services including well workovers, rig management and rig construction. The agreement with Sibneft is Deutag's first drilling contract in Russia.

The latest deal follows a pioneering $60 million contract signed earlier this year with Pride Forasol, a unit of Pride International. Sibneft this year launched a wide-ranging horizontal drilling programme. The programme includes 24 wells to be drilled by the company's Sibneft-Drilling subsidiary, with international service companies supplying auxiliary services.

Sibneft president Eugene Shvidler commented: "This agreement reaffirms our commitment to apply the best available technology to maximize recovery from our fields and returns for our shareholders." Deutag managing director Claus Chur said: "We hope that this contract will lay the foundation for a long term partnership with Sibneft".