SURGUTNEFTEGAS IS EXPANDING ITS RESOURCE BASE

Throughout 2005 the Company was engaged in geological and prospecting works on 17 acreages and 22 fields in the West Siberian, East Siberian and Timano-Pechora oil and gas provinces. Within a year 1 oil field and 6 oil and gas deposits were commissioned. Oil reserves increment totaled 82 mn tons.

Last year Surgutneftegas took up 9 hydrocarbon exploration and 7 licensed blocks are located on the territory of Khanty-Mansiysky Okrug and the rest is in Yakutia (Alinsky) and in the south of Tyumenskaya Oblast (Nelimsky). At present the field season of seismic operations is under way to be finished. Tens of millions tons of the potential resources are expected to be produced on the blocks the Company purchased in 2005.

Since the beginning of the current year Surgutneftegas has purchased 4 hydrocarbon exploration and production licenses. Novo-Vasyugansky block is located in Tomskaya Oblast. Nizhnepepsky and Verkhnetirsky oil blocks are in Irkutskaya Oblast, moreover the latter is not far from the town Ust Kut, where Surgutneftegas is developing its infrastructure in line with construction of an oil pipe line at the Talakanskoye field. The forth license taken up late April concerned exploration of Zarechniy block in Novosibirskaya Oblast. The forecast resources of the purchased blocks make up almost 150 mn tons of oil and more than 140 bmc of gas. The Company’s experts suppose that the forecast will be scored, indeed.

In 2006, the Company is planning to launch 2D and 3D seismic shooting for the licensed blocks that will cover over 6,000 line kilometers and 1,000 square kilometers correspondingly. The prospecting and exploratory drilling is expected to exceed 167,000 meters, construction of 57 exploratory wells and deepen of 54 development wells to carry out additional exploration of underlying horizons are to be finished next year as well.

Growing activity of the exploration works is also expected in new regions of the Company’s operation. Particularly, from the first half of 2007 eight of fourteen drill crews of Exploration Division of OJSC “Surgutneftegas” will operate on the blocks of the Eastern Siberia.

“Since our key task is to replenish the depleting resource base up to a 100% level through reserves increment and new blocks acquisition, our interest to all perspective oil and gas blocks wherever they are located is quite obvious. The company is engaged in geological and prospecting works in Nenetsky Okrug as well as in Western and Eastern Siberia regions”, stated Nikolai Medvedev, the Senior Geologist, Deputy Director General of OJSC “Surgutneftegas”.

According to Nikolai Medvedev the initiation of tax holidays at new fields can become a real motivation for geologic exploration development. He also noticed that prospecting and exploration works require large investments that are paid back not sooner than in ten years and only on condition that the commercial oil reserves have been explored. 

Press Service of OJSC “Surgutneftegas”