Our Arctic Neighbors: Lukoil wants Nenets field to produce more oil

Click here to read the PDF version of this story.
Print this story | Email it to an associate.

The Yuzhno-Khylchuyuskoye field in Russia’s Nenets Autonomous Okrug is not yet producing as much oil as Lukoil had hoped, Leonid Fedun, a vice president of the company, said at a press conference Aug. 31. The field is operated by Lukoil subsidiary Naryanmarneftegaz, a joint venture with ConocoPhillips. Lukoil owns 70 percent of the company and ConocoPhillips 30 percent.

“The company is studying the field and the production peak will be reached, but I currently cannot say when that will happen,” Fedun said. “Unfortunately, the first expectations were greater than what we have got,” he added. The field is connected by pipeline to the Varandey terminal on the Pechora Sea coast.

The field produced 22.7 million barrels of oil in the first half of 2009, according to Naryanmarneftegaz.

China’s Sinopec recently signed an agreement with Lukoil to purchase 21.4 million barrels of oil from the Yuzhno-Khylchuyuskoye field. The deal is valid from July 1, 2009, to June 30, 2010, or “until the contract is paid in full,” Lukoil said. The oil will be shipped by Litasco, a trading arm of Lukoil.

—Sarah Hurst