Rosneft awarded Sakhalin V exploration license

OJSC NK Rosneft, on behalf of an alliance including BP PLC, has received a 5-year exploration license for part of Russia's Sakhalin V area off Sakhalin Island in Russia's Far East.

By OGJ editors

HOUSTON, July 16 -- OJSC NK Rosneft, on behalf of an alliance including BP PLC, has received a 5-year exploration license for part of Russia's Sakhalin V area off Sakhalin Island in Russia's Far East.

The license covers seismic acquisition and exploratory drilling on the Kaigansky-Vasuykansky blocks in the East-Smidt (East Shmidtovsky) area located in the southern part of the Sakhalin V tract. The blocks cover an area of 10,000 sq km (see map, OGJ, July 19, 1999, p. 44).

A partnership of BP Exploration & Operating Co. Ltd.49%, Rosneft 25.5%, and Rosneft-Sakhalinmorneftegas 25.5%—formed in 1998 to develop Sakhalin V hydrocarbons—will set up a joint-venture company to hold the license and jointly carry out all operations, including geological studies in the license area. The alliance conducted a 5,000 line-km 2D seismic survey of the Sakhalin V area in 2000. Water depths range up to 140 m.

Rosneft estimates exploration could take up to 6 years. It postulates that the Sakhalin V structures identified thus far could hold reserves of as much as 600 million tonnes of crude oil and 600 billion cu m of natural gas.

The partnership plans to purchase seismic data from a survey that Petroleum Geo-Services ASA and Dalmorneftegas are conducting this summer over Sakhalin V. Drilling could begin as early as 2004, depending on results of the survey.

The Sakhalin area, considered a world-class hydrocarbon province, lies off the east coast of mainland Russia in the Sea of Okhotsk, which is ice-bound for about 6 months each year and technically challenging for developers.

Onshore production of oil and gas began in the 1920s, and in the last 30 years there have been five giant discoveries totaling more than 500 million bbl of oil and 1 trillion cu m of gas in the Sakhalin Island area.

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