A unit of Panoco Holding AG, Nyon, Switzerland, has disclosed more details on a $600 million oil field development program in Tatar A.S.S.R. of the Soviet Union.
Panoco U.S.S.R. AG and Tatarstan's Tateneft Oil & Gas Association will develop seven oil fields in a 78,461 acre area west of giant Romashkino field (OGJ, Aug. 12, p. 31). Proved reserves are estimated at 1.69 billion bbl.
Panoco hopes to get its joint venture registered by Dec. 1.
The venture, designated Blue Kama, will drill more than 2,000 wells during a 10 year period and has targeted production at 125,000 b/d from the fields.
Crude will move through a new 58 mile pipeline to Almetyevsk, where it will link into the existing pipeline infrastructure. All the oil will be exported unless Tatneft decides to use some locally.
The joint venture also will be involved in renovating pipelines.
There is also scope for exploration in the area, but in the first years of the 25 year contract emphasis will be on field development.
The third element of the joint venture is construction of a 50,000 b/d refinery in the Nurlat area. It will be the first processing unit in Tatarstan, which produces about 800,000 b/d of oil but imports all its products from other regions.
The refinery project is still in the feasibility study stage, which will take about 1 year to complete. Construction would require 2-3 years.
Production of about 2,000 b/d will start next year, when a number of wells are worked over. The peak of 125,000 b/d will not be reached until 1995-96.
Panoco plans to use four or five western rigs for the drilling program to supplement Soviet owned rigs, which will be supplied with western equipment where necessary. Tatneft has 140 Soviet built drilling rigs.
Centerpiece of the development will be a central treatment unit. The crude has a low gas:oil ratio, but at 23 gravity the oil is heavier than the normal Ural blend of 32 from the area. It also contains 3.5% sulfur that must be be removed.
Tatneft has drilled about 170 wells in the seven fields. Panoco said there is a considerable amount of drilling and seismic information available.
However, Tatneft lacked money and locally manufactured equipment to undertake the development. During the development phase Panoco will import items in short supply such as steel and compressors.
Much of the work will be done by local industry under the supervision of a western contractor.
Discussions on financing are well advanced, said the company, and at this stage there is no need to consider other partners.
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