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Sibneft Signs $60 Million Drilling Contract With Pride International

Moscow, 29 May 2001; Sibneft has signed a major drilling deal with Pride Forasol, a unit of leading drilling contractor Pride International. The $60 million contract will be supported by a guarantee from French export credit agency Coface.

Under the contract, Pride will drill a series of horizontal wells at Sibneft's giant Sugmut field, which harbors reserves of close to a billion barrels. Pride will start work on the first well in autumn, with the remainder to be completed over a sixteen-month period.

France's Institut Francais du Petrole cooperated with Sibneft specialists in designing the drilling programme, which may be expanded depending on results from the first phase. Sibneft will retain other international service companies to perform associated services, such as logging, cementing and perforation.

The agreement with Sibneft is Pride International's first contract in Russia. The project is the first in Russia to receive a guarantee from Coface following the 1998 financial crisis, in addition to being the agency's first venture in the Russian oil sector.

Pride International is one of the world's largest drilling contractors and is a leader in horizontal drilling technologies. The group recently completed the world's longest recorded horizontal well with a reach of 11,180 metres at Tierra del Fuego on the southern tip of Argentina.

"This landmark agreement will play a pivotal role in our plans to tap new fields," Sibneft president Eugene Shvidler said. "The partnership with Pride will give a major boost to our recently launched horizontal drilling programme, and reaffirms our commitment to apply cutting-edge technology in the pursuit of higher returns."