CANADIAN-SOVIET JOINT VENTURE TURNS A PROFIT

A Calgary company reports it is marketing crude oil and earning profits from a joint venture in the Soviet Union. Canadian Fracmaster Ltd. is a partner in an enhanced production and marketing operation in the Ob River area of Siberia with the Royal Dutch/Shell Group and the Soviet Ministry of Oil. Fracmaster Pres. Ron Bullen said the company has recouped its initial investment after 2 years and is starting to produce a substantial-but undisclosed-profit from operations. Fracmaster agrees to

March 25, 1991

2 min read

A Calgary company reports it is marketing crude oil and earning profits from a joint venture in the Soviet Union.

Canadian Fracmaster Ltd. is a partner in an enhanced production and marketing operation in the Ob River area of Siberia with the Royal Dutch/Shell Group and the Soviet Ministry of Oil.

Fracmaster Pres. Ron Bullen said the company has recouped its initial investment after 2 years and is starting to produce a substantial-but undisclosed-profit from operations.

Fracmaster agrees to stimulate a well at its own expense in return for a share of any increase in production it achieves.

Under the joint venture agreement, Fracmaster gets a 25% share of production gains, Shell 25%, and the Soviets 50%. Production gains of about 10,000 b/d from chemical stimulation are sold on Italian and Spanish markets for hard currency by a Soviet trading company.

Fracmaster invested about $23 million in demonstration and development expenses for the 20 year project. Bullen said Fracmaster has a target of 1 00,000 b/d and is close to completing two other joint ventures in the Soviet Union. He said the company also has had inquiries from Poland, Hungary, and Germany.

The Fracmaster president said the company has established a policy of donating some profits for community development and social programs in the area where it is operating. More than $5 million has been donated to the city of Nefteyugansk and nearby communities.

Bullen said Fracmaster gets its sales earnings in U.S. dollars. Its only currency problems have been raising enough rubles to pay for local services.