RUSSIA TO BEGIN OFFERING HUGE FAR EASTERN OFFSHORE TRACTS IN 1993

Russia plans to offer two far eastern offshore areas to bidding for exploration and development rights this year. The plans were announced by. Russian oil agency Northeast Petroleum Operating Agency (NEPO) last week at the Offshore Technology Conference in Houston. The tracts--Primagadan in the Okhotsk Sea and East Khatyrka in the Bering Sea--are part of a program to offer for license 16 offshore areas in the Russian Far East through 1996, NEPO said.

May 10, 1993

3 min read

Russia plans to offer two far eastern offshore areas to bidding for exploration and development rights this year.

The plans were announced by. Russian oil agency Northeast Petroleum Operating Agency (NEPO) last week at the Offshore Technology Conference in Houston.

The tracts--Primagadan in the Okhotsk Sea and East Khatyrka in the Bering Sea--are part of a program to offer for license 16 offshore areas in the Russian Far East through 1996, NEPO said.

In addition, NEPO plans to offer for license the Anadyr and Shantar blocks, also in the Okhotsk Sea and Bering Sea, respectively. Some of the acreage to be offered borders U.S. waters.

Russian officials peg the postulated hydrocarbon resources of the country's entire far eastern coastal shelf at 167.9-189.8 billion bbl of oil equivalent (BOE).

Of that offshore total, the Sakhalin sector is believed to contain 115.7-20.9 billion BOE, Khabarovsk territory about 26.3 billion BOE, and Magadan oblast about 9.5 billion BOE.

NEPO--formed under Russian Federation auspices to represent the regional governments and geological committees and headquartered in Magadan, Russia--is running the program. Halliburton Geophysical Services Inc., Sugar Land, Tex., is assisting NEPO in preparing and promoting the offerings.

WHAT'S AVAILABLE

NEPO Director Valery G. Lesnoy said packages of geophysical and related data will be available to bidders at a cost of about $40,000-50,000/per area. Geophysical profiles will cost extra.

Lesnoy said bids would be received through October and that the first licenses would be awarded in November-December.

There has been no drilling in any of the offshore areas, which are in 100-200 m of water and subject to difficult ice and severe winter conditions much of the year. No pipelines serve the region.

One of four onshore wells in the Chukotka region found oil, but development was halted for lack of funds, Lesnoy said. However, he estimated on the basis of geophysical data alone that each area could contain a minimum of 50-70 million tons (365-511 million bbl) of crude oil. The areas, which vary greatly in size, will be broken into smaller tracts for licensing. The Anadyr area, for example, extends about 270 miles east to west.

MAGADAN MOVES

In Russia's far eastern Magadan oblast, the Magadan Property Fund has started preparing documents for a meeting of future participants in an international round of bidding and for a gathering of NEPO's founding members.

A Magadan province council and the Russian Federation government have approved the makeup of the tender commission, order of procedure, and basic tender conditions.

The main problem is the division of spheres of interest involving the territories bordering on the Sea of Okhotsk, the general staff of the Russian Federation's Ministry of

Defense, and the Russian Committee for Protection of State Borders. A large portion of the offshore territory to be covered by the tender is in "neutral waters."

The Sea of Okhotsk's continental shelf includes two geological features, the northern Okhotsk trough system and the northern Sakhalin basin, that are believed to hold substantial oil, gas, and condensate resources.