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Royal Dutch Shell plc .com: Gazprom Neft Abandons Allotment in Sakhalin

From www.kommersant.com

June 23, 2006

Gazprom is ready to part with its sole field in Sakhalin, the Lopukhovky area, the license for which exploration was obtained along with Sibneft (today’s Gazprom Neft). But Gazprom may think better of the area, if it joins Sakhalin-2 project by swapping assets with Shell. In any case, Lopukhovsky is an asset of low efficiency with no promising future, the branch analysts speculate.

Gazprom Neft is deciding whether to dispose of Lopukhovsky area, Sakhalin shelf (between Sakhalin-4 and Sakhalin-5), the company’s president Alexander Ryazanov announced yesterday.

The area was acquired in late 2005, when Gazprom bought out 76 percent in Sibneft.

The possible resources of Lopukhovsky are estimated at 130 million tons of oil and 500 bcm of gas. TNK-Sakhalin obtained a prospecting license in 2002 to pave the Sakhalin way for TNK-BP. The exploration budget was estimated at around $60 million but the company didn’t invest the whole amount, preferring to sell 75 percent in TNK-Sakhalin to Sibneft. Similar to TNK-BP, Lopukhovsky was the first asset of Sibneft in Sakhalin.

The area has no prospects, said a source close to the Federal Agency for Subsoil Use (Rosnedra). “They may find modest reserves but development in extremely severe conditions of northern Sakhalin will hardly be efficient.”

by www.kommersant.com

All the Article in Russian as of June 23, 2006

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