Press releases in August 2005 | |||
TNK-BP Funds Pilot Development of the Verkhnechonskoye Field
TNK-BP confirmed today that its Board of Directors has agreed to fund up to $270 million for pilot development of the Verkhnechonskoye oil and gas condensate field in the Katangsky Region of the Irkutsk Oblast.
The current stage of the pilot development is intended to prove field reservoir potential and to determine the most efficient method for a full-scale development of the field using advanced technologies. OAO Verkhnechonskneftegas intends to complete the pilot development by the end of 2008.
The Pilot Production System will include oil and gas processing and water injection facilities that are expected to be completed by the end of 2006. It is planned to drill 20 new wells, 13 of which will be production wells, and 7 new water injection wells.
Part of the allocated funds will be invested to build a 600 km pipeline to connect the Verkhnechonskoye field with Ust-Kut, a railway station on the Baikal-Amur Magistral. A railway terminal will be constructed which will accept and re-handle the Verkhnechonskoye crude.
The Verkhnechonskoye field is the largest oil and gas condensate field yet discovered in Eastern Siberia. Development had been hampered for many years by an absence of transportation infrastructure but it has now become possible, following last year’s decision by the Russian Government to undertake the construction of the Eastern Siberia –Pacific Coast pipeline system.
«Until recently all our estimates indicated that any commercial development of the Verkhnechonskoye field would not be economically viable since we had to lay a one thousand kilometer pipeline from the northern part of the Irkutsk Region to the Angarsk Petrochemical Plant in the south. However, the decision for Transneft to build a trunk pipeline to the Pacific Coast has changed the situation: thus we are now prepared to invest substantial funds into this project, as the project economics now look positive and provide acceptable margins for the investor», said Alastair Ferguson, TNK-BP Deputy Executive Director, Gas Business Development «Our principal task will be to align the Verkhnechonskoye pilot development plans and preparations for commercial production with the Transneft schedule for the first stage of pipeline construction to Skovorodino. This will enable us to start deliveries of Verkhnechonskoye crude to the domestic market, as well as to Asia and the Pacific as early as 2008-2009» he added.