Bitech acquires prospective acreage on Sakhalin Island
Bitech Petroleum Corp., Toronto, announced an agreement with Dashk LLC, a Russian company, to jointly develop the Djimdan license block on Sakhalin Island. Bitech is acquiring 52% of Dashk LLC for $1.7 million.
HOUSTON, Apr. 11 -- Bitech Petroleum Corp., Toronto, announced an agreement with Dashk LLC, a Russian company, to jointly develop the Djimdan license block on Sakhalin Island.
Dashk owned 100% of the license, and Bitech is acquiring 52% of Dashk for $1.7 million. The purchase price will be split over four payments, with the last payment coming after the well has been drilled.
Bitech Pres. and CEO Nicholas Gay told OGJ Online Wednesday, �If the block doesn�t work out as we think it will, we can give it back to the Russians.�
Bitech will operate the license block, 5 km north of the town of Nogliki. The block, covering 114 sq km, is south of Mongi field. Mongi has been in production since the 1970's and is operated by Sakhalinmorneftegaz (SMNG).
Two prospects have been identified on the Djimdan license. One is South Mongi and the second is Ust Veni. The South Mongi prospect is on trend to Mongi field, which had peak production of 25,000 b/d.
The Ust Veni prospect is down-dip, and on the same migration path. Bitech estimates resources for the two identified structures range from 49-177 million bbl of recoverable oil, with a total median recoverable volume of 96 million bbl.
Bitech plans to shoot 3D seismic this winter and drill a wildcat in 2002.
Both South Mongi and Ust Veni lie close to infrastructure and access to an oil export route. A pipeline connects Sakhalin to an all-weather deepwater port on mainland Russia, which could allow oil to be exported directly to Japan at relatively modest cost.
Gay said, "This is Bitech's first acquisition in Russia since our original entry into the Komi Republic. The Sakhalin project offers a tremendous growth opportunity within Russia.�
Through its Russian subsidiary, Bitech-Silur Joint Stock Co., Bitech is active in oil development and production in the Komi Republic of the Russian Federation.
Bitech-Silur owns and operates five production licenses and two exploration licenses in Komi, 1,500 km northeast of Moscow. Of the five production licenses, two are in production. These are South Kyrtayel field and Lekker field. As of Dec. 31, production was 10,000 b/d of oil.
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