Yukos, MOL to spend $300-350 million on western Siberian field

Feb. 13, 2002
Russian company OAO NK Yukos and Hungarian company MOL PLC have agreed to jointly further develop Zapadno-Malobalysk field in Russia. They will invest $300-350 million in the project.

By the OGJ Online Staff

HOUSTON, Feb. 13 -- Russian company OAO NK Yukos and Hungarian company MOL PLC have agreed to jointly further develop Zapadno-Malobalysk field in Russia. They will invest $300-350 million in the project.

Yukos and Mol will form a 50:50 joint venture incorporated in Russia. MOL will pay Yukos $100 million on the effective date.

Zapadno-Malobalysk is in western Siberia within the Khanty-Mansiysk Autonomous Region. It is near pipeline and transportation infrastructure. Yukos said the field has estimated proven recoverable reserves of at least 20 million tonnes of crude.

The field has recently been producing 10,000 b/d. Plateau of 55,000 b/d is expected by 2005.

The companies have been contemplating the joint exploitation of the field since 1999.

At first, they intended to arrange a production-sharing agreement with the Russian Federation for the field. However, the lengthy negotiation process necessary for a PSA made them decide to proceed with the development under a licensing regime.

Yukos also said it does not intend to participate in the privatization of Greek company Hellenic Petroleum Co., which it had previously studied doing, because it is focusing on Central Europe.