OCCIDENTAL SCHEDULES RUSSIAN E&D JOINT VENTURE

June 8, 1992

A unit of Occidental Petroleum Corp. is on its way to acquiring joint venture exploration and development rights on a big block of acreage in Russia's Komi Republic with a high bid of $10.1 million. Oxy made its offer in the Komi Republic's first round of competitive bidding for acreage. Oxy's Block 15, covering 1.5 million acres, lies in the Timan-Pechora basin. Oxy said 4 billion bbl of oil have been found in the basin. Elsewhere in the Russian Federation, a group led by Marathon

A unit of Occidental Petroleum Corp. is on its way to acquiring joint venture exploration and development rights on a big block of acreage in Russia's Komi Republic with a high bid of $10.1 million.

Oxy made its offer in the Komi Republic's first round of competitive bidding for acreage.

Oxy's Block 15, covering 1.5 million acres, lies in the Timan-Pechora basin. Oxy said 4 billion bbl of oil have been found in the basin.

Elsewhere in the Russian Federation, a group led by Marathon Oil Co. plans to drill two appraisal wells off Sakhalin Island this summer.

Proposed drillsites are in Piltun-Astokhskoye and Lunskoye fields in a program to determine the feasibility of development (OGJ, Apr. 6, p. 44). A coordinating committee composed of representatives of Russian and Marathon group interests agreed to expedite the drilling.

OXY JOINT VENTURE

Following the Block 15 award May 29, Occidental of the Republic of Komi Inc. and Ukhtaneftegasgeologica (Ukhtanefte Gas Geology), one of Komi's petroleum enterprises, signed a contract setting up the Parmaneft exploration and development joint venture. Oxy has a 75% interest.

The contract has a 5 year exploration term and a 25 year exploitation period. Oxy will pay 100% of exploration costs and has the option to halt exploration at the end of each contract year.

The contract will become effective after registration in the Russian Federation's Ministry of Finance.

Block 15 lies just south of the Arctic Circle and west of the Ural Mountains, near the town of Ukhta. A crude oil pipeline with surplus capacity lies about 30 miles from identified prospects on the block.

Exploration is to begin as soon as possible with reprocessing of 2,000 km of seismic data and the start of a 1,300 km seismic survey.

Russia's Tass news agency said "several" other foreign operators submitted bids for Block 15.

A second round of bidding covering 21 more blocks in the Timan-Pechora region is to be conducted in about 1 month. Tass said minimum exploration commitments are $3 million on each block.