GULF CANADA POISED FOR SOVIET OIL PROJECT

Gulf Canada Resources Ltd., Calgary, last week confirmed it is in the final stages of registration for a venture that could see outlays of as much as $1 billion for oil development in the Komi region of northern Russia. The project involves Canadian technology and expertise in arctic operations, enhanced oil recovery, and environmental processes. The Soviets have a 50% interest in the joint venture, called KomiArcticOil. British Gas plc, London, agreed in principle to participate with Gulf as

July 22, 1991

2 min read

The project involves Canadian technology and expertise in arctic operations, enhanced oil recovery, and environmental processes.

The Soviets have a 50% interest in the joint venture, called KomiArcticOil. British Gas plc, London, agreed in principle to participate with Gulf as an equal western partner for the other 50% interest.

Gulf Pres. C.E. Shultz called the joint venture "a strategic entry into the Soviet Union."

He said, "it positions us to participate in the development of sizable known oil deposits and immediately add to current oil production and reserves, as well as pursue other long term opportunities in the Soviet Union."

The joint venture is the result of 2 years of negotiations between Gulf and Soviet agencies.

Gulf signed an agreement last May with Komineft, the operating oil company in the Komi region of the Russian republic. Final approvals are expected soon.

The combine at first will focus on two fields in the Vozey area of Komi, north of the Arctic Circle about 1,500 km northeast of Moscow. The partners will develop a newly discovered oil field and increase production from a nearby older field. The fields hold a combined 2.2 billion bbl of oil in place.

The first phase of the multiphase project involves production of as much as 20,000 b/d within 3 years and total spending of about $200 million during that period. If all later phases are implemented, total investment could be $1 billion.

The project should double the production of crude oil from the two Vozey fields, Shultz said.

A board made up of representatives from the western and Soviet partners will manage the joint venture. An organization consisting of 50 Canadian employees and Soviet specialists is in place and ready to start operations as soon as final approvals are received. First supplies and equipment, including pipe, have been sent from Canada to Komi.