Sibneft Launches Production From Krapivinskoye Field

Moscow, 10 May 2001; Sibneft has launched production from the Krapivinskoye field in the Omsk region, marking a key step in the company's drive to expand production beyond its home base of Noyabrsk.

Output from the field under the first phase of development is set to climb rapidly to a peak of around 7,000 barrels per day (350,000 tonnes) in 2003. Sibneft is also exploring nearby acreage, which is expected to raise this total to at least 20,000 barrels per day (1 million tonnes).

The first well at Krapivinskoye was brought on stream with output of some 300 barrels (40 tonnes) per day, and the blueprint for the first stage of development calls for the drilling of 14 wells. The field has total recoverable reserves of some 62 million barrels (8.6 million tonnes), but this tally is expected to rise significantly following the completion of additional exploration work.

The first stage of development of Krapivinskoye is expected to absorb some $30 million in capital expenditure. Sibneft won a license to develop the field in a tender held in February 2000. The company is currently conducting a feasibility study on the construction of a 400 kilometre pipeline to link the field with the 385,000 barrel per day capacity Omsk refinery.

"The inauguration of production from Sibneft's first wholly-owned field outside our core producing region of Noyabrsk is a historic event for the company," Sibneft president Eugene Shvidler said. "In the longer term, we aim to further diversify our upstream asset base and raise output from fields outside the Noyabrsk region to account for up to half of our total production."