C.I.S. JOINT VENTURES CONTINUE TO MARK PROGRESS

Foreign joint ventures continue to mark progress in the Commonwealth of Independent States.

KomiQuest Ltd.'s foreign partners are ramping up sales and exports of oil produced from reworked Vozey area wells in Russia's Komi republic.

Elsewhere in Russia, Eurosov Petroleum Ltd., London, reported four production wells had been completed on Yuzhnoye field in Western Siberia and have begun production at a combined rate of 4,000 b/d.

Meantime, Kazakhstan officials are processing final approvals for the proposed Zhetybay Quest joint venture. Zhetybay Ouest would undertake workover operations in Kazakhstan's Zhetybay field similar to KomiQuest's activities in Vozey area.

Zhetybay Quest would be owned 50% by Quest Petroleum Kazakhstan and 50% by Mangistaumunaigas, the state production association of Kazakhstan's Ministry of Energy & Fuel Resources. Star Valley Resources Corp., Vancouver, B.C., owns 15% equity interest in Quest Kazakhstan.

KOMIQUEST

KomiQuest joint venture's exports at the end of July totaled 156,000 bbl. In addition, Russia's Ministry of Fuel & Energy has approved sale of another 667,500 bbl of oil, KomiQuest operator Quest Petroleum Exploration Gesellschaft GmbH said.

KomiQuest partner Star Valley said the joint venture is holding more than 667,500 bbl of oil in storage and expects to export the volume approved by the fuel and energy ministry "as soon as we can move it to the export pipeline."

KomiQuest has applied for an exemption from Russia's oil export tax and has been holding back shipments as long as allowed by available storage capacity while awaiting action by Russian officials. But even with Russia's export tax--currently about $4/bbl--the joint venture's Vozey area workover operations are profitable, Star Valley said.

KomiQuest is owned 50% by Quest Petroleum and 25% each by Russian partners Komineft production association and Usinsk NGDU. Quest Petroleum equity owners include Qatar's Mannai Corp. 62.5%, Australia's Callina NL 22.9%, and Star Valley 9.2%.

KOMIQUEST OPERATING DETAILS

KomiQuest has been producing incremental oil from workovers for the past 7 months.

Total oil exports at the end of July would have been more than 156,000 bbl if KomiQuest's third shipment had not been trimmed to 75,000 bbl from the 112,500 bbl volume announced in late June.

After Vozey area production peaked earlier this year at 4,638 b/d net to the joint venture, combined output dropped to about 4,000 b/d from 10 wells when partners for technical reasons removed downhole equipment from an unspecified number of reworked wells not performing as expected.

Partners plan to recomplete or otherwise stimulate 13 more wells this year in Phase I of the venture's workover program. Downhole equipment recovered from unresponsive wells is to be reinstalled in the new workovers.

KomiQuest holds a 25 year license to produce and export new and incremental oil production from three concession areas encompassing 345 sq km and including Komi's South Vozey, West Vozey, South Famen, and Ufimskaya fields (OGJ, Nov. 9, 1992, p. 34). In addition to workovers, the venture is to extend known fields in the concession area, define new oil prone structures, and drill step-out and development wells.

Partners estimate that about 500 wells in concession area fields need to be reworked.

As expected, KomiQuest has three rigs operating on concession acreage. The units consist of Russian components above ground and western components subsurface. Using 100% western drilling would increase operating costs by a factor of 10, but achieve only about a 12% efficiency increase, partners estimate.

Using combined Russian and western equipment, KomiQuest can recomplete a Vozey area well in about 15 days.

SIBERIAN VENTURE

Production from Yuzhnoye wells is moved via a 65 km pipeline, laid during the winter because the area is a swamp in summer, which links into a trunkline at Nizhnevartovsk.

Another eight wells are ready for completion on two cluster sites. These will be brought on stream during the year, with the intention of achieving 10,000 b/d output by yearend.

Eurosov plans to bring Yuzhnoye production to 36,000-40,000 b/d of oil by the end of 1995, after which the company will consider extending the pipeline further prior to developing other fields nearby (OGJ, Feb. 15, p. 34).

Kevin Burke, chief executive of Eurosov, said a suite of three fields south of Yuzhnoye could be the next development project. Eurosov and partner Magma Oil Co., Nizhnevartovsk, would probably look for a partner to develop these.

Eurosov holds 30% of Yuzhnoye license interest, with the rest being held by Magma. Eurosov said 55% of 1993 production from Yuzhnoye is licensed for export free of export tax. The remainder is being sold for domestic consumption in Russia.

Magma assumed the 70% shareholding in Yuzhnoye owned by Siberian Oil Corp. (Sinco), Tyumen, when the field began production. Sinco and Magma are respectively the exploration and production arms of the same operation and are due to merge officially under the Sinco name.