Sibneft Launches Major New Oilfield Development Programme

Moscow, 27 June 2000; Sibneft has announced the launch of an aggressive new oilfield development programme, as the company continues to ramp up investment in its upstream operations. Sibneft is this year launching production from four new fields, and the company is also starting development of new reservoirs at another two fields. Capital expenditure over the lifetime of the six new projects is expected to exceed $1 billion.

Sibneft launched commercial production from the Romanovskoye and Yarainerskoye fields in spring, and plans to bring on stream production from the East Vyngayakhinskoye and East Pyakutinskoye fields later this year. In addition, the company will begin production from new reservoirs recently discovered at the Karamovskoye and Kraineye fields.

Sibneft has begun drilling in the central area of its giant Sugmut field, which harbors reserves of close to a billion barrels. Peak production under a $64 million pilot project is expected to reach 2 million tonnes per annum (40,000 b/d) in 2003. Sibneft is applying advanced technologies supplied by international oilfield service company Schlumberger, its strategic alliance partner. These include ClearFrac technology to boost well productivity from hydrofracturing operations, new drilling fluids and advanced technology for reservoir entry.

Sibneft is now working on a blueprint for full field development, which is due to be launched in 2001. The development is expected to absorb capital expenditure of some $370 million and generate peak production of 6.5 million tonnes per annum (135,000 b/d) by 2006.

Sibneft president Eugene Shvidler commented: “For the past two years, we have focused on improving the productivity of our existing fields by streamlining our operations and applying cutting-edge technology. As a result of these efforts, we have succeeded in setting a new benchmark for efficiency in the Russian upstream. We have now moved on to a new phase, where our focus has shifted to developing new fields in our portfolio with the aim of achieving long-term sustainable growth in production.”