SHELL JOINS JOINT VENTURE IN RUSSIA
Shell Exploration By has agreed to join a Saga Petroleum AS project to develop oil and gas fields in northern Russia's Timan Pechora basin in collaboration with three Russian companies.
Saga signed an agreement of intentions with Severgasprom, Arkhangelskgeologia, and Ukhtaneftegasgeologia to form a joint venture that would be half Russian and half foreign.
The combine intends to develop fields for which Severgasprom, as leader of the Russian group, applied for exploitation licenses at the end of December.
The plan is to develop Mid Kharyaga and North Kharyaga oil fields and Layavosh, Vasilkov, Vaneivis, Kumzha, and Korovin gas/condensate fields. The group also plans to apply for exploration and production licenses for the area near the fields.
Saga, which has been working with the Russians for 2 years, has undertaken joint studies of reserves, development prospects, and economic feasibility. The result is a plan for an integrated development, starting with the oil fields, which are nearest infrastructure.
"The main part of all production is planned for export," said Saga. "Further appraisal activities, technical and economic studies, and commercial negotiations are required before commerciality can be declared."
Ukhtaneftegasgeologia will act as operator of an appraisal well in Mid Kharyaga field this winter, for which Saga and Shell may finance coring, logging, and testing by western contractors.
The group aims to conclude a feasibility study, an environmental impact study, and a joint venture agreement this year.
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