Opening Russian deposits to foreigners allowed by Duma

Apr 25, 1997 02:00 AM

Only 2 out of a list of 7 reserves being considered for development under production-sharing agreements will be open to development with foreign companies, the head of the lower house of parliament State Duma natural resources committee said recently.
Alexei Mikhailov said that the 2 reserves were the Kuranakh group of gold reserves and the Prirazlomnoye oil reserve. "All of the rest of the reserves will be developed by Russian companies," Mikhailov said.
Some major projects due to be developed by international consortia, including those on the Sakhalin Shelf in the Far East, do not need to be approved by the Duma, because they started work before the production-sharing law was passed.
Mikhailov told a news conference that the overall amount of investment expected to be made in the 7 deposits was $ 16 bn, but only just over $ 500 mm of the total would be made by foreign investors. "If all of these reserves are approved (by Duma deputies), then over 20 years the increase in oil production from the 5 (oil-bearing) deposits will be 600 mm tonnes," he said. An annual increase of 30 mm tonnes (600,000 bpd) would represent around 10 % of current Russian oil production levels.
Mikhailov said the first effects of developing the new reserves would be felt in 2 years, and that peak production would be around 10 years from now.

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