ANOTHER JOINT VENTURE SCHEDULED IN U.S.S.R.

Mustang Investments Inc., Salt Lake City, signed a 50-50 joint venture agreement with the Soviet agency Nizhnevartovskneftegas (NNG) to produce and export oil and gas from 25 western Siberian fields, Mustang Investments and Jack Laken, president of Laken & Associates, Toronto, also became the only western members of the Union Economics International Concern, a combine that plans to invest in various Soviet projects.

Jan. 14, 1991

3 min read

Mustang Investments Inc., Salt Lake City, signed a 50-50 joint venture agreement with the Soviet agency Nizhnevartovskneftegas (NNG) to produce and export oil and gas from 25 western Siberian fields,

Mustang Investments and Jack Laken, president of Laken & Associates, Toronto, also became the only western members of the Union Economics International Concern, a combine that plans to invest in various Soviet projects.

Although the joint venture contract with NNG provides for Mustang to market at least 15 million bbl/year of oil, Mustang Pres. Douglas W. Merritt said the amount will be "considerably" more.

"That is just a guaranteed minimum amount," Merritt said. "Because we are working with an entity in the Soviet Union that is so enormous, they wanted us to start with a realistic figure. They said 15 million bbl would be realistic."

NNG, headquartered in the Tyumen region of western Siberia, is associated with the U.S.S.R. Ministry of Oil and Gas Industry. Joint venture offices will be in Dallas and Nizhnevartovsk, U.S.S.R.

The 25 fields controlled by the venture contain 11,000 wells producing more than 2.4 million b/d of oil and 12 billion cu m/year of gas.

The agreement gives Mustang exclusive rights to market outside the U.S.S.R. the oil, gas, and other resources produced by NNG and the joint venture. Mustang will be paid with a share of production.

Merritt said, "Several European and Asian companies have shown a great deal of interest, including firm offers to purchase the oil and gas production of NNG and the joint venture or to join in further development of NNG."

The venture plans to develop oil fields in Tyumen and import consumer goods and industrial equipment to Nizhnevartovsk. Merritt also said Mustang will hire an outside service company to help with the project.

UNION ECONOMICS

The Union Economics combine hopes to increase production and sale of Soviet oil and gas to the world market.

Its members, Merritt said, control more than 40,000 oil wells.

Among the Soviet members of the cartel are L.G. Burcovskava, chairman of the Moscow City Committee of the Red Cross, S.A. Magradze, director of the Atlant Commercial Bank, and N.D. Derkach, director of the Research Institute of Drilling Technique's Perm Branch.

Merritt said the group also plans to develop housing in several regions of the U.S.S.R.

Union Economics is considering offers from several European and Asian companies to do business with the combine either as members or as buyers of its crude oil and natural gas production, he said.