CRIMEA AWARDS FIRST PRODUCTION SHARING CONTRACT
A 4 year old Houston geotechnical consulting firm has signed a contract it believes to be the first production sharing agreement in Crimea, part of the former Soviet Union.
HyTEXplor Houston Inc. and Crimea's Krymgeologia, or State Geological Production Association, will form a production company to develop and operate fields in Crimea and four adjacent states in Ukraine.
HyTEXplor officials say exploration, especially deeper pool tests in present fields, is possible under the contract.
Krymgeologia estimates Crimea's reserves at 100 million bbl of low sulfur liquids and 1 tcf of natural gas. But the semiautonomous republic has production from only two fields because the centrally planned oil industry of the old U.S.S.R. bypassed most of the region's discoveries in favor of larger fields elsewhere.
Those bypassed finds now look attractive to Crimea and Ukraine, which have suffered economically from the lapse of oil shipments from Russia and the move to market prices for gas imports from Turkmenistan (OGJ, Oct. 26, 1992, p. 30).
Crimea sets its own natural resource policy. Ukraine still handles the republic's external affairs and defense.
HyTEXplor estimates value of its production sharing agreement at "well in excess of $1 billion."
WHAT'S PLANNED
An agreement signed last November committed HyTEXplor to comprehensive feasibility studies of a group of oil and gas fields and included all critical elements of the final contract.
HyTEXplor will finance and manage development and operation of all oil and gas fields in Krymgeologia's jurisdiction, except the two on production, subject to endorsement by the Ukrainian State Geological Committee and the prime minister of Crimea.
The Houston firm will evaluate fields and begin development in order of their potential. It will provide capital, expertise, and technology to jointly owned Krimtex Nafta, which will handle development. HyTEXplor will receive an undisclosed share of production after recovering costs.
The firm, which is seeking industry partners, expects to begin development of the first field soon. It will evaluate other fields at the same time.
Until the Crimean venture, privately owned HyTEXplor offered geotechnical services and exploration and production management as a consultant.
It has performed concession evaluations in Jordan, Syria, and Colombia; designed, implemented, and operated an enhanced oil recovery project in Texas; created an information management system for a major oil company's exploration department; and evaluated oil and gas opportunities in former Eastern Bloc countries.
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