Sibneft hooks up with Halliburton

Feb 08, 2002 01:00 AM

by Mike Solovyanov

In a move to further boost efficiency, oil major Sibneft announced that it has signed a framework agreement for Halliburton to provide oil field services. Sibneft vice president Alexander Korsik said an almost "unlimited" sum of money can be spent on introducing Western technology to Siberian oil fields.
"It is our firm intention to maximize the use of our global knowledge for the benefit of Sibneft," said Hans Klampferer, business development manager for Halliburton-Eurasia. "We are focused on bringing financial results to Sibneft and its investors."

During Soviet times, the state oil companies used their own in-house service divisions to oversee the steps in pumping crude oil, which include the repair and maintenance of wells, drilling techniques and reservoir management and other tasks. Since privatisation, many Russian companies -- including No. 6 Sibneft -- have adopted the Western model and spun off their service divisions into independent companies.
Sibneft already works with service companies Schlumberger, BJ Services and Pride Forasol. With the addition of Halliburton, Sibneft will be able to encourage competition for projects among the service companies, pushing down costs as it explores and develops fields in Siberia and the Far East.
"We want companies to compete for our oil fields," said Sibneft vice president Andrei Matevosov. "Through competition, new ideas are born and new technologies are brought on board."

Halliburton only came into the Russian spotlight in 1999, when it was chosen as a contractor for Tyumen Oil's Samotlor field as part of a controversial US Export-Import Bank loan deal. But Halliburton has prospered in Russia and the Caspian region over the past 10 years with the backing of US Vice President Dick Cheney, who lobbied strongly for lucrative projects when he was Halliburton CEO from 1995 to 2000.
Worldwide, Halliburton posted $ 13 bn in revenues in 2001. Matevosov said that Halliburton will "very likely" participate in exploration work in Chukotka, an autonomous district in the Far East, as well as along the district's shoreline. Roman Abramovich -- who controls 88 % of Sibneft through financial industrial group Millhouse Capital -- was elected governor of the region in December 2000.

Sibneft has licenses for three onshore blocks in Chukotka and began exploratory drilling last summer. Sibneft officials have cited reserve estimates as high as 275 mm barrels, and last year about a quarter of the company's exploration expenses were funnelled to the district.
That percentage looks to increase in 2002, especially if Sibneft begins exploring potential offshore reserves, Matevosov said. While he declined to give an exact sum for Chukotka, he said the dollars figure for the region ran into the tens of millions.

Source: Anna Raff
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