Repsol of Spain and Alliance Oil Co. Ltd. of Bermuda have completed the first phase in the formation of their Russian exploration and production joint venture with transfers of assets and shares (OGJ Online, Dec. 22, 2011).
Alliance has contributed its Saneco subsidiary to the joint venture. Repsol has acquired shares in the joint venture from Alliance for $36 million and subscribed $37 million in new shares.
Under an agreement signed last December, Alliance was to transfer Saneco, which has production interests in Russia’s Samara region, and another subsidiary, Tatnefteotdacha, to the joint venture. The units at yearend 2010 had interests in 14 oil fields in the Volga-Urals region with proved and probable reserves totaling 171.5 million bbl and production of about 20,500 b/d.
In addition to capital, Repsol will contribute Eurotek, which it bought last December for $230 million (OGJ Online, Dec. 30, 2011). Eurotek’s assets include two West Siberian gas fields, Syskonsyninskoye, which is under development, and Yuzhno-Khadyryakhinskoye, which is under appraisal.
The remaining asset and cash transfers are expected to be complete by the fourth quarter this year. Alliance Oil will hold 51% and Repsol 49% of the joint venture, which will have an asset base estimated at $840 million.