TNK reports difficulties in setting up joint venture for Samotlor

Jul 31, 2000 02:00 AM

German Khan, executive director of Tyumenneft (TNK), said that deficiencies in Russian legislation were making it difficult to develop the Samotlor oil field under a production-sharing agreement (PSA). TNK would like to set up a joint venture with Chernogorneft (a subsidiary of Sidanko that was briefly under TNK's control), Khan said. However, problems in the tax and PSA laws have made it difficult to proceed with the project, he said.
The two types of legislation are at odds with each other, he explained, in that the PSA law allows investors to make payments in the form of oil while the tax laws do not. As such, he said, the tax legislation will have to be amended before large-scale work can proceed at Samotlor. TNK and Chernogorneft began discussing the joint venture last year, after the latter company was declared bankrupt and sold at a controversial auction.
Chernogorneft is developing a section of the Samotlor field adjacent to that of TNK, and Khan said that Halliburton, the US oil field services company, had worked with TNK and with Chernogorneft's parent company Sidanko to study the feasibility of joining the concessions. Halliburton believes this to be a workable project, he said.

Source: NewsBase
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