BENTON EXPLORES W. SIBERIAN JOINT VENTURE

Benton Oil & Gas Co., Ventura, Calif., pursuing a Western Siberian joint venture, will host a Soviet delegation in the U.S. next month. Benton announced in January the signing of a letter of intent regarding a joint venture to explore, develop, and produce oil and gas from North Gubkin and Prisklonovoe fields in the Tyumen oblast area 1,500 miles northeast of Moscow. The letter of intent, or protocol, calls for Benton and Purneftegasgeologia Industrial Association (PIA) to complete technical

April 8, 1991

2 min read

Benton Oil & Gas Co., Ventura, Calif., pursuing a Western Siberian joint venture, will host a Soviet delegation in the U.S. next month.

Benton announced in January the signing of a letter of intent regarding a joint venture to explore, develop, and produce oil and gas from North Gubkin and Prisklonovoe fields in the Tyumen oblast area 1,500 miles northeast of Moscow.

The letter of intent, or protocol, calls for Benton and Purneftegasgeologia Industrial Association (PIA) to complete technical and economic feasibility surveys during 2-3 months.

These studies are still in progress.

PIA is the local governing body that regulates the fields in this part of the Soviet Union.

Benton's initial efforts are to be aimed at exploiting the two fields, which were discovered in the late 1980s but have never been produced, said Alex Benton, president.

Reserves, reservoir characteristics, and other data about the fields are required to be held confidential under the protocol, said David H. Pratt, vice-president of finance.

The company is analyzing Soviet oil and gas operations, presently focusing on transportation and hard currency concerns, Pratt said.

Benton has assumed that a final agreement would provide for some type of charge that the Soviets would retain off the top of the joint venture's proceeds. Such a charge, variously referred to as a royalty, override, or value added tax, is part of Benton's overall consideration of the project, but not at levels as high as the 40% recently expressed by others (OGJ, Apr. 1, p. 44).

A decision whether to proceed could be made in as little as 4-8 weeks, Pratt said.