Black Sea Energy Ltd., Calgary, has formed a joint venture to explore a block adjacent to its existing acreage in western Siberia's Tyumen region. The 50-50 venture with Russia's Tyumennedra is called Radonezh Petroleum Joint Stock Co. It is Black Sea Energy's third such JV in Russia (OGJ, July 14, 1997, p. 29).
The Radonezh block is directly east of Black Sea Energy's Tura project area (see map). Tura includes the 75,000 acre Kalchinskoye field and the surrounding 1 million acre North Kalchinskoye exploration block, on which Black Sea Energy JV Tura Petroleum Co. is performing exploratory and development drilling.
Tura Petroleum is currently producing about 7,300 b/d of oil from Kalchinskoye field.
Both Radonezh and Tura blocks are near the Trans-Siberian pipeline.
Radonezh potential
The Radonezh block covers 1.3 million acres. Black Sea Energy's partner on the block, Tyumennedra, is owned by three groups of private shareholders.One of these groups is the successor organization of the former national association of Russian petroleum geologists, which chose the highly prospective Radonezh block to satisfy its former employer's unfunded pension obligations.
Previous Russian studies of Radonezh indicated that it contains 7 million bbl of proven oil reserves. Using a recovery rate of 20% of the original oil in place, total recoverable oil is estimated at 1.4 billion bbl.
Black Sea Energy has done a little preliminary drilling in the area.
"Two initial exploration wells at Radonezh have produced oil from at least four productive zones and have tested at up to 500 b/d," said Black Sea Energy Pres. Clint Hussin. "Seismic analysis indicates the presence of seven potential pools," he added.
Development plans
During the next 2 years, Black Sea Energy plans to spend $20 million on exploratory and development drilling on Radonezh."Being adjacent to our Tura project's producing Kalchinskoye oil field, we expect to benefit from economies of scale and operational efficiencies," said Hussin.
Radonezh Petroleum plans to drill eight wells-six exploratory and two development-and acquire 900 km of seismic.
Under terms of the JV agreement and license, Black Sea Energy will make an initial equity contribution of $2 million. The company also has committed to a loan of $8 million during the first year and a loan of $10 million during the second year.
The loans will be repaid to Black Sea Energy from the project's operating cash flow on a preferential basis. During the loan repayment period, Black Sea will be entitled to 85% of the available cash flow.
As a result of this latest venture, Black Sea Energy now has exploration and development licenses on more than 2 million acres in Siberia's Tyumen oil region.
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