U.S.-SOVIET JOINT VENTURE NEAR FINAL TERMS

U.S. and Russian partners expect late this month to register their second oil and gas joint venture in western Siberia. If plans proceed on schedule following registration, Golden Mammoth partners about June 1992 will begin drilling joint venture wells in the Bakhilovsk region, says Gil Labbe, president of Anglo-Suisse L.P., Houston (OGJ, July 15, p. 34).

Nov. 18, 1991

3 min read

U.S. and Russian partners expect late this month to register their second oil and gas joint venture in western Siberia.

If plans proceed on schedule following registration, Golden Mammoth partners about June 1992 will begin drilling joint venture wells in the Bakhilovsk region, says Gil Labbe, president of Anglo-Suisse L.P., Houston (OGJ, July 15, p. 34).

Partners in Golden Mammoth, Anglo-Suisse Production (Cyprus) Ltd., a subsidiary of Anglo-Suisse LP; and Varyeganneftegaz (VNG), the Russian oil and gas production association; signed joint venture papers Oct. 15, Labbe said. Anglo-Suisse Cyprus and VNG each own 50% interest in the venture.

Anglo-Suisse LP and VNG are 50-50 partners in the White Nights joint venture, which last summer began exporting oil from western Siberia (OGJ, June 24, p. 27). The two companies also are preparing a third deal, designated Northern Lights, for joint venture development some time next year.

VENTURE TERMS

Labbe said terms of White Nights and Golden Mammoth ventures are virtually the same:

Non-Russian partners will provide investment capital, take over operations in joint venture fields, negotiate sales agreements, and arrange transportation with Russian agencies.
VNG will contribute oil and gas reserves and existing infrastructure.

Golden Mammoth will be allowed to export joint venture oil.

The biggest difference between the two deals is that Golden Mammoth requires Anglo-Suisse to put up $15 million in the first 2 years to develop regional infrastructure in addition to investment in oil and gas operations.

Also, Anglo-Suisse has been negotiating Golden Mammoth terms directly with officials of the Russian Soviet Federated Socialist Republic. White Nights joint venture talks included U.S.S.R. officials, who approved the deal in November 1990.

Anglo-Suisse is negotiating with non-Russian companies interested in joining the Golden Mammoth project.

Labbe said the seven fields involved in White Nights and Golden Mammoth joint venture areas hold combined reserves estimated at 3 billion bbl. The areas lie between Russia's Urengoi and Samotlor fields. Urengoi is thought to be Russia's largest gas field, while Samotlor oil reserves are estimated at 20 billion bbl, Labbe said.

Golden Mammoth operator Anglo-Suisse will take over operation of existing wells, currently producing about 25,000 b/d. But the focus of joint venture partners will be on drilling as many as 500 wells in Golden Mammoth fields.

By comparison, White Knights partners last year began field work by reworking damaged or shut-in Russian wells.

At first, Golden Mammoth partners plans to deploy three rigs in the joint venture area. Labbe said wells in the joint venture area began producing in 1989 and little rework is needed.

"Essentially, no well is more than 2 years old. It's really a virgin area," Labbe said.