Bula Resources (Holdings) plc, Dublin, has purchased an interest in a Russian oil company in an attempt to avoid the problems of working in Russia as a foreign partner.
Bula paid $5.6 million to Russian Transcontinental Financial Industrial Corp. for a 51% interest in AKI-OTYR, a joint stock company holding oil producing licenses in western Siberia.
In return, the Russian corporation will be issued shares in Bula to give it a 26% share of the enlarged company.
Bula Technical Director Tim Howell said this is the first example of an oil company buying a stake in a Russian firm.
"We acquired a share in a Russian company because there is one rule for Russian companies and one for foreign companies," Howell explained.
Bula said AKI-OTYR's main assets are licenses to produce oil from Shapshinskoye oil fields near the Ob River in the Khanty-Mansiysk region of western Siberia.
SHAPSHINSKOYE FIELDS
The Shapshinskoye group of fields, 90 km southeast of the town of Khanty-Mansiysk, is divided into three areas: upper to the north, middle, and lower to the south. An independent survey of the fields is said to have estimated proved reserves at 135.9 million bbl of 33.2 oil.
Lower Shapshinskoye field is a Cretaceous reservoir at a depth of 7,650-7,700 ft. Average production potential for vertical wells in the field is estimated at 730 b/d and 1,830 b/d for horizontal wells, based on test data for eight wells.
Field life is pegged at 25 years.
Bula said Lower Shapshinskoye is at the most advanced stage of delineation of the three fields.
Proved reserves for Middle Shapshinskoye are estimated at 19.4 million bbl, and Upper Shapshinskoye reserves are placed at 32.3 million bbl.
The survey estimated that ultimate proved, probable, and possible reserves could be more than 300 million bbl of oil in each of the Shapshinskoye reservoirs.
Bula said the reservoirs will afford high production rates from easily drillable depths. Shapshinskoye fields lie 15 km from the nearest export pipeline.
RYAMNOYE FIELD
AKI-OTYR also holds a license to produce oil from Ryamnoye field, 7 km east of Nizhnevartovsk.
Ryamnoye field reserves are estimated at 8.8 million bbl of 39.4 oil. The field was discovered in January 1990 in Jurassic sandstone at 8,040 ft.
One appraisal well and nine development wells have been drilled in the field. Production equipment and a pump station are said to be required to complete field facilities.
Ryamnoye's wells will be used for early production to generate cash flow. Howell said the field lies only 250 m from an export pipeline in Nizhnevartovsk townsite.
The field development plan calls for existing wells to be placed on production during the first 2 years of operations and drilling of two horizontal wells in the third and fourth years.
During the first year, a horizontal sidetrack will be drilled from an existing well. If this succeeds, other wells will be reentered and sidetracked.
Howell said initial average well potential production of 380 b/d for vertical wells could be boosted to 950 b/d by production through horizontal well sections.
Field production is expected to peak at 3,500 b/d in the third and fourth year after production begins. Field life is estimated at 14 years.
Because the acquisition of AKI-OTYR requires shareholder approval, Bula has been granted a suspension in trading of its shares on the Dublin and London stock exchanges.
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