FOREIGN FIRMS PRESS UPSTREAM PROJECTS IN C.I.S.

International oil and gas companies continue to mark progress in upstream deals with the Commonwealth of Independent States.

South Korean and Russian officials have agreed to conduct a feasibility study on a field in Yakutsk.

Drilling has started in the West Siberian area targeted for license by the Urengoil Trace joint venture.

The Blue Kama joint venture is wrapping up financing for its project to develop reserves in Tatarstan, and Russia has approved the plans of Germany's Deminex for joint development of oil fields near Volgograd.

Meantime, Kazakhstan has chosen consultants to aid in negotiations with British Gas plc and Agip SpA for development of Karachaganak field.

YAKUTSK STUDY

Representatives of Korea Petroleum Development Corp., Korea Gas Corp., Daewoo Corp., and Yukong Ltd., representing an eight member South Korean group, met in Seoul late last December with officials from Moscow and Sakha republic and agreed to conduct a preliminary feasibility study to develop a gas field in Yakutsk.

The year long study is to start after group members are chosen and sup- plies are provided, Agence France Presse reported. Members of the feasibility study team are to be chosen at a meeting in March.

A protocol for the joint venture study was signed early last December when reports said the group would focus on developing fields along the Vilyui River in eastern Siberia and assess bids for a pipeline running southeast through North Korea (OGJ, Dec. 7, 1992, Newsletter).

URENGOIL TRACE

Main Urengoil Trace partners Tracer Petroleum Corp., Vancouver, B.C., and Urengoyneftegaz Geologia (UNGG) started drilling late last month in the northern part of the western Siberian basin, kicking off a pilot project aimed at establishing early commercial production from the largest of three fields in the area.

Four sandstone reservoirs in the target field have been delineated by more than 40 holes, Tracer said, but the field has not been placed on production. The zones contain 41 gravity sweet crude, natural gas rich in liquids, and 54 gravity condensate.

An independent reserves determination by Coles Gilbert Engineers, Calgary, said the target field holds proved and probable reserves of 363 million bbl of oil (284 million bbl proved), 278 million bbl of condensate (236 million proved), and 5.1 tcf of marketable gas (4-4 tcf proved).

Tracer said in addition to providing early revenues, information gathered during the pilot project is needed to complete full scale development plans.

The joint venture received approval late last year to explore, develop, and produce reserves in a 1.8 million acre area in western Siberia (OGJ, Nov. 2, 1992, p. 28). UNGG has applied to Russian authorities for a production license, which is expected to be granted soon and will be transferred to Urengoil Trace.

Partners with Tracer 20% and UNGG 50% are Dundee Bancorp of Toronto 20%, Con Brio Resources Ltd. of Calgary 5%, and Euromin Canada Ltd. 5%.

PROJECTS MOVING AHEAD

The Blue Kama joint venture, including Panoco Holding GmbH, Vienna, and Tatneft Oil & Gas Association, are finalizing financing for their project to develop eight oil fields west of giant Romashkino field.

Funding will be used to import equipment from western suppliers. Most of the work will be carried out by the local labor force under supervision of western contractors.

Panoco said reserves in the 78,461 acre area are estimated at 2.61 billion bbl, and the joint venture plans to drill about 2,770 wells in 14 years.

The joint venture was registered last August (OGJ, Oct. 19, 1992, p. 25). Initial organizational meetings have been held, and plans for the first year include working over 35 wells and drilling 80 wells.

Production will move through a 58 mile pipeline the joint venture will lay. A refinery project, still in the feasibility study stage, is to be complete within 3 years.

Russian officials have approved Deminex's plan to jointly explore four areas north, west, and south of Volgograd on the lower Volga River.

A heads of agreement was signed on the project in 1990.

KAZAKHSTAN CONSTRAINTS

Kazakhstan has retained Shearman & Sterling, a New York law firm, to advise the republic in connection with British Gas and Agip's plan to develop Karachaganak field in the Urlask region.

Ecology & Environment Inc., Buffalo, has been hired to provide environmental consulting services for the republic on the project.

BG and Agip were awarded the right to negotiate definitive agreements for developing the field last June, and negotiations are to be complete this year.

BP and Agip expect to spend about $6 billion on the project the next 10 years and $20 billion during the 40 year life of the field.

Karachagank holds reserves that are estimated at 2 billion bbl of oil and 20 tcf of natural gas (OGJ, Sept. 28, 1992, p. 30).

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