|Sibneft New Vice President for Production 2/2/2006||C H U
K O T K A .org
||Chukotka Articles from 2006 back
|Chukchi a huge, new, old find 2005||
|Gold Mining 1993-2004
Oil and gas in Chukotka 2006
Anadyrskiy the Rayon coal industry
Bilibino richest deposits ore gold cuprum silver metals of platinum group
The Chaunsky Rayon unified mining-industrial complex is being formed
Shmidt Region Gold mining is the largest industrial sector by revenue
Iul’tinskii Region is rich in tin tungsten and coal.
PEVEK rusting away pier
In recent years though many of the mines have been shown to be uneconomic and have closed,
causing many residents to move to more central regions in Russia and for the port infrastructure to decay.
Pevek (Russian: Певек) is a town and Arctic port in Chaunsky District, part of the Chukotka Autonomous Okrug, Russia. After Anadyr and Bilibino it is the third largest town in Chukotka. Population: 5,206 (2002 Census); 12,915 (1989 Census). The town is a modern settlement established after the First World War to provide a port for the export of minerals as part of the expanding Northern Sea Route.
During the 1940s and 1950s, Pevek was the site of several GULAGs where prisoners mined uranium.
In recent years though many of the mines have been shown to be uneconomic and have closed, causing many residents to move to more central regions in Russia and for the port infrastructure to decay.
|Sibneft Begins Offshore Seismic in Chukotka’s Anadyr Bay 2005|
|Chukotka Auton Regn Overview 10 1998||
Abramovich Canada Visit
Sibneft, managed by Roman Abramovich
|The settlement was founded to house the miners and
workers from the Pyrkakay (Пыркакай, later renamed Krasnoarmeysky) tin
mine, but was determined to no longer be economically viable in
1998. As of 2009, Krasnoarmeysky is included in the list of
settlements currently in
the process of being liquidated.
* 1basic - 11,
* 2gravel - 72.
The greater part of tin and tungsten deposits is concentrated in the Chukotka metallogenic zone. They are situated relatively close to each other in the north of the Okrug. The largest are basic reserves (Pyrkakayski Stockworks, Yioultin, Valkumei, Ekug, Svetloye, Lunnoye). The average percentage of tin in the ore is 0.23%.
The largest deposit is Pyrkakayski stockworks. Location: Chaoun District, 86 km south-eastwards of the town of Pevek.
Characteristics: stockwork group is constituted of 7 deposits with the Okrug’s largest reserves of ВС1С2 category, ore revertible.
In-place reserves: 270.800 tons, or 82% of total Okrug’s reserves; В+С1 – 259. 8 thousand tons, С2 – 11.2 thousand tons.
Average percentage of tin in the ore: 0.23%
Exploration: open cutting is possible.
Slump in tin prices and sharp contraction of domestic market that took place in 1990s resulted in stoppage of tin production at the Valkumei and Yioultin deposits, as well as at numerous tin placers. All such tin deposits have been transferred to state reserve.
Platinum group metals
Probable reserves of the platinum group metals in the Okrug are located in the Anadyr-Kiryak system, which is characteristic of gold, mercury, rarer copper, chromite and tin-and-silver mineralization, as well as of some placers of gold and platinoids.
Advance geochemical search and prospecting works performed in recent years in the Mainitski-Khatyrski platinum-beating area brought new data on metallogenic potential and perspectives of the territory in finding basic deposits of gold, platinoids and chromites; a forecast estimation of these deposits has been provided. Based on recent information, promising metallogenic areas needing a more detailed analysis of their geologic-structural, geochemical and search characteristics have been singled out. These are Algan, Velikorechinsk, Mainits, Rytgyl, Alkatvaam, and Econai areas.
In addition to this, probable reserves of platinum group metals in the Peschanka complex molybdenum-copper-porphyry formation deposit are estimated by the Р1 category as follows: Platinum - 16.2 tons, palladium - 125.5 tons, rhodium - 17.6 tons.
Pure silver deposits have not discovered, but still there are reasons to think that there are reserves with big concentrations of silver. Silver as a co-product is found in many proven gold and tin-silver deposits. Estimated on-site deposits amount to 1087 tons including:
* 1В+Сi – 45.6 tons – 1041.4 tons,
* 2C2 – 1041.4 tons.
Probable silver reserves as estimated on 01.01.2003 are set in the amount of 8500 tons by the Р2 category. These are located in two metallogenic areas:
* Verkhne-Yablonski area with gold and silver mineralization - 2300 tons,
* Pettymel-Oleptitinsky area with silver and polymetallic mineralization - 6200 tons.
The profitability of industrial exploration of silver-bearing deposits with on-site reserves is judged by economic value of basic minerals, gold and tin.
The Government Statement of Balance includes 28 tungsten deposits on the territory of the Chukotka Autonomous Okrug, including:
* gravel - 17,
* basic - 11.
On-site reserves are contained in gravel and basic deposits that by the ВС1С2 category total 63,700 tons, with average percentage of WO3 of 0.06%.
Gravel deposits of the Yioultin District allow open cutting, and three of them have reserves for deep-mined output. Also, gold placers of the Lenotap River contain tungsten trioxide allowing for drag extraction.
In 7 locations with open cutting in the Chaoun District tungsten trioxide is found as a co-product for tin.
In 1992 tungsten production was quitted by the same reasons as production of tin.
Presently no copper extraction locations have been set in the Chukotka Autonomous Okrug.
However as a co-product copper may very well be produced. The most promising in this respect is the Peschanka complex copper-porphyry deposit. Apart from copper, it is proved to contain considerate reserves of molybdenum, gold, silver and platinum group metals.
Exploration work of search and estimation stage have been performed on the Peschanka deposit, mineralization was explored to 700 m depth. Results of this work served as base for estimating probable reserves of Pi category, these made up 1.350 billion tons of ore containing the following:
* 8.3 million tons of copper (0.61% percentage),
* 200,000 tons of molybdenum (0.015%),
* 435 tons of gold (0.32 g/ton),
* 5000 tons of silver (3.7 g/ton) and
* 159 tons of platinum group metals (0.12 g/ton).
In connection with steep rise of copper price (it now costs more than $7000 per ton) industrial value of this deposit is worth reconsidering.
Additional copper reserves were found during assessment research of large territories, very promising from the point of view of copper-sulfur formation reserves.
estimation Explored resources
expectations exceed the
explored resources by many times. As of 01.01.2005, the Ministry of
and Development of Russia approved resource forecast for lode gold in
locations showing positive geologic and economic parameter.
|Sibneft New Vice President
for Production 2/2/2006
Sibneft named Reval Mukhametzyanov as the company's new vice president for production. Mukhametzyanov returns to the post, which he has held previously, after serving for over three years as vice president of Slavneft.
Mukhametzyanov will oversee the exploration and production operations of Sibneft-Noyabrskneftegas and Slavneft. His long association with the company will allow him to quickly reinvigorate the development of Sibneft's production assets while maintaining the company's current strategy.
Sibneft vice president Andrey Matevosov will continue in his post, focusing his efforts on the development of new exploration and production projects. He will supervise the company's Sibneft-Vostok, Sibneft-Khantos and Sibneft-Chukotka business units.
"In previous years, Reval Mukhametzyanov's high level of professionalism helped Sibneft to achieve some impressive results," said Sibneft president Alexander Ryazanov. "His experience and insight will aid the company in achieving its plans for stabilizing production and ensuring long-term growth."
Born in 1934, Reval Mukhametzyanov is a graduate of Kazan State University. In 1977, he became chief geologist of Nizhnevartovskneft and later headed the Nizhnevartovskneftegas unit in charge of the major Samotlor oilfield from 1982 through 1985. He worked for a decade as chief geologist and deputy general director of Noyabrskneftegas (now part of Sibneft) from 1985 until 1995 before joining Sidanco as executive director and senior vice president.
From 1997 through 2002, Mukhametzyanov served as Sibneft's vice president for oil production. In 2002, he left to become senior vice president of Slavneft.
|Chukchi well is a huge,
new, old find 2005
World Oil MARCH 2005
MMS apparently wants folks to get interested in the Chukchi Sea off the northwest coast of Alaska. Only about five wells have been drilled there, and one of them, the Burger discovery, was just reappraised by MMS. The new verdict is that Burger may be the largest hydrocarbon find on Alaska’s OCS.
The well was drilled during the Chukchi exploration program, headed by Shell between 1989 and 1991. At the time, nobody was searching for gas, so not much attention was paid to the discovery.
The new re-appraisal has lifted the most-likely recoverable reserves from an original estimate of 5 Tcf of gas to a new estimate of 14 Tcf.
The estimate indicates a possible range from 8 to 27 Tcf.
Estimates for condensate' range from 371 million to 1.4 billion bbl with 724 million bbl the most likely
The Burger structure is a 25-mi diameter dome, sitting on a structural ridge that branches southwest across the center of the Chukchi shelf, from a point on the Barrow Arch about 50 miles northwest of Barrow. The Chukchi sandstone forms an exact analogy to similar rift-sequence sandstones that form the reservoirs at the Kuparuk River field in the central North Slope.
Offshore Seismic Work in Chukotka’s Anadyr Bay
Moscow, July 19, 2005
Sibneft has begun carrying out geophysical exploration work on the Tumanskiy license block, located in the Anadyr Bay section of the Bearing Sea. The company plans to collect 3000 kilometers of seismic data at the site. The data will shed light on the geology of subsurface structures previously determined to be promising, thereby helping to design a program of exploration drilling on the field for 2006.
Sibneft-Chukotka received a five-year geological exploration license for the Tumanskiy block in November 2003. The block covers about 13,000 square kilometers in water that is 25 to 60 meters in depth. There are five localized structures within the license area, with total geological resources estimated to exceed 1 billion tons of oil equivalent.
Geological work likewise continues at other Sibneft license sites in the Chukotka region. At the Telekaiskoye oil and gas condensate field, testing is underway on a well that, in 2004, produced industrial flows of oil. Sibneft has also built geological models of the offshore portion of the Anadyr oil & gas basin based on drilling and seismic work carried out in the region, identifying several more promising structures.
now Russia's fifth largest oil company
04-03-02 http://www.gasandoil.com Vremya Novostei via NewsBase
The oil company Sibneft became the fifth largest company in Russia in terms of production in February, leaving behind Tatneft. By the end of the year, the company will boost output by 26 % to 20.7 mm tons, compared with last year, and double output by 2005. Company leadership notes that the company may invest annually the required $ 1 bn if the world oil price is not below $ 16.5 per barrel.
As output grows, Sibneft management will
credit portfolio, which currently stands at $ 840 mm.
This summer, Sibneft intends to borrow $ 200-300 mm for capital investment. In addition, the company will solicit another credit to take part in the privatisation of a 19.68 % stake in Slavneft by the end of the year. This year, Sibneft's main investment will be committed to the Sugmut deposit in the Yamal-Nenets area, the Priobskoye and Palyanovskoye deposits in the Khanty-Mansi area.
In addition, around $ 100 mm will be invested in the Sibneft-Yugra joint venture between Sibneft and Sibir Energy, which develops the Yugorskoye deposit. Last year, the company extracted 80,000 tons of oil at the deposit and aims to produce 500,000 tons in 2002.
|Russian oil at
The latest financials and operating performance ratings for LUKoil, YUKOS, Sibneft, Surgutneftgaz and Tatneft.
Organic growth was low at 1 percent due to the stagnant production in the company’s core western Siberia region, which currently accounts for 72 percent of total production (the region produced 83 percent in 1999). So far, the Komitek acquisition appears to be paying off – production at the three Timan-Pechora subsidiaries (Komitek, Nobel Oil, Bitran) was up 5.7 percent last year and accounted for 9.2 percent of LUKoil’s total output.
Production at international projects continues
at a rapid pace (39 percent last year). Major growth was recorded at
Azeri-Chirag-Guneshli (the Azerbaijani part of the Caspian) and Tengiz
(Kazakstan) oil projects.
The balance sheet appears healthy, with an estimated $2.8 billion in total debt, $1.2 billion in cash and equivalents and equity of $9.8 billion.
Crude oil exports soared 23 percent to 438,000
export/production ratio increased from 40 percent to 44 percent, the
in the sector. Clearly this high share of exports in a period of record
oil prices had an extremely beneficial impact on the bottom line.
Despite generating an estimated $2.4 billion in operating cash flow last year, Yukos’ CAPEX amounted to only $500 million. Note that after subtracting a $1.3 billion improvement to the balance sheet, described above, we still could not allocate $600 million. Company executives cited long-term supplier advances and various investments (Eastern Siberian Oil Company being one) as the uses of extra cash flow.
Sibneft exported 32 percent of its oil production and 21 percent of refined product output last year, largely unchanged from 1999 levels. Refinery throughput was unchanged at 250,000 bpd. Light products amounted to 80 percent of output, which is by far the highest percentage of any major refinery in Russia and is a further improvement from the 78 percent achieved in 1999.
Sibneft acquired a 40 percent stake in Orenburgneft last year for $250 million to $300 million. We expect this equity to be used as a bargaining chip to increase the utilization of Omsk refinery (64 percent at present) by securing additional oil supplies from TNK, Orenburgneft’s majority shareholder; but it is also possible that management may either sell the stake or insist on a joint operation with TNK.
Sibneft has also formed a 50/50 joint venture with Sibir to develop the southern part of the Priobskoye field.
Operating and net margins are below the sector averages due to high depreciation charges. Sibneft carries its U.S. GAAP books in dollars, which has made depreciation expense immune to the ruble devaluation. As a result, Sibneft’s depreciation equals that of LUKoil and Surgutneftegaz, despite production being 72 percent lower.
On a cash basis, margins are traditionally slightly below those of industry peers, due to higher exposure to the domestic market. This, however, should work in Sibneft’s favor this year as domestic prices outperform exports.
Sibneft’s financial position is very stable.
Refinery throughput at the Kirishi refinery fell 7 percent in 2000 to 320,000 bpd after the management decided to stop processing third-party oil. At the same time, Surgutneftegaz deliveries to Kirishi rose 8 percent. Due to an excellent optimization of product output, the refinery’s light-heavy product ratio improved sharply to 68 percent-32 percent from 50 percent-50 percent in 1999. The refinery currently operates at 84.2 percent of capacity, among the highest levels in Russia, and exports approximately two-thirds of its output.
Financial performance Surgutnefetgaz’s own forecasts for 2000 are for revenue of $5.6 billion (up 70 percent year on year), gross profit of $3.5 billion (up 82 percent) and pre-tax income of $3.16 billion (up 82 percent). Although Surgut’s RAS accounts are not directly comparable with U.S. GAAP, we believe that Surgut is the most profitable company in the sector due to tight cost-control. The pre-tax margin stood at 57 percent in 2000, up 400 basis points from 1999.
Kirishi refinery, which is not consolidated in Surgut’s performance, posted a 48 percent gain in revenues to $571 million. Due to a drop in refining volumes, however, its pre-tax margin shrank 900 basis points to 35 percent, and pre-tax income rose only 12 percent to $199 million.
In order to capture downstream margins,
50,000 bpd at the refining unit it leases from Nizhnekamskneftekhim and
marketed the resulting products. As a result of this processing
deliveries to Nizhnekamskneftekhim (NKNH), commonly transacted at a 30
percent discount to market prices, fell to 60,000 bpd last year.
The balance sheet continued to improve due to the company’s ongoing debt reduction program. Total debt fell by $275 million to $620 million at year-end 2000, and the net debt/equity ratio has improved from 0.52 percent in 1999 to 0.21 percent.
For 2001, we expect a 33 percent drop in
EBITDA on a 13
percent decline in revenues. In the absence of downstream business,
performance is inherently more sensitive to oil-price volatility. But a
moderate reduction in working capital needs, combined with higher
expense, should still allow Tatneft to generate operating cash flow of
|Draft law on production
sharing ignores investors
Several pieces of legislation have been adopted recently that will help form a special tax regime for projects operating under production sharing agreements.
The draft law "On Direct Production Sharing" is awaiting the president’s signature. It was adopted by the Federation Council and establishes a simplified procedure for production sharing between the government and investors.
It is well known that the law "On Production Sharing Agreements" (PSA) basically substitutes some taxes and duties for production sharing. In other words, an investor running a PSA project is exempt from taxes and duties, except royalties, profit tax, universal social tax and duties on the use of land and natural resources.
A special taxation system for PSA needs to meet the following two basic requirements. It must fit in with the principles established in the law "On Production Sharing Agreements" and be compatible with the Russian Tax Code and other legal and executive acts concerning taxation.
The State Duma Committee on Budget and Taxes, together with representatives of the fiscal structures, drafted a relevant document that was submitted to the Duma on January 23, 2001. But on April 26 the Finance Ministry refused to cooperate and put forward its own draft. Finally, it was decided that the latter document should be finalized and submitted to the government by June 20, 2001.
The Finance Ministry’s draft provides for a dramatic increase in the number of taxes (from four to 22) and, what is worse, establishes that investors’ expenses cannot be reimbursed in excess of the limits set by the agreement. This means that it will not be long before such "limits" appear in every PSA. And the larger the number of taxes the less production is left to be shared between the parties of a PSA. This is a step back toward the existing taxation system that we have been trying to put straight for six years.
On April 13, 2001, the Consultative Council on Foreign Investments in Russia, the European Business Club, the American Chamber of Commerce’s Russian branch, the German Economic Union and the Oil Consultative Forum, who represent the interests of foreign investors in Russia, sent a letter to Economic Development Minister German Gref where they clearly stated that the Finance Ministry’s draft law was not in line with the law "On Production Sharing Agreements." They said it "will not help create any adequate conditions for investments," that it "undermines the foundations of the production sharing principles and ideas," and "leaves no opportunity for any long-term economic assessments."
The letter, which definitely deserved serious attention, was shown little respect by the government. As if deriding it, the government meeting that convened shortly after it was received resolved "to uphold the main principles of the Finance Ministry’s draft."
Without waiting for the deadline of June 20, the Finance Ministry finalized the draft and submitted it to the government on May 11. Compared with the initial draft, the final version showed some improvements as well as some changes for the worse. For example, a number of purely conventional payments, such as "compensation to the state for exploratory and prospecting work," were classified as taxes.
In their letter, the investors gave a highly positive appraisal of the draft law prepared by the State Duma Committee on Budget and Taxes. The letter said that the adoption of this draft "with some amendments and appendices would be a major step forward and … would signal the improvement of Russia’s investment climate in the oil and gas industry."
The investors’ opinion was ignored, and the Duma’s Committee’s proposals were rejected right away.
Another dangerous provision in the government’s draft substitutes "royalties" for "extraction tax." As things stand, the "royalty" rate varies between 6 percent and 16 percent and is specified in a PSA license, while the government’s draft calls for setting the "extraction tax" at 16.5 percent. Obviously, this may push some of the PSA projects out of business.
According to estimates made by the head of the YUKOS oil company, Mikhail Khodorkovsky, the substitution of "royalties" for "extraction tax" will nearly double the tax burden.
The cost of oil production and operational efficiency of an oil company strongly depend on the deposit’s location, depth of the oil layer, deposit’s capacity, and so on. The proposed "extraction tax" does not take these differences into account.
So, the "extraction tax," if introduced, will cause numerous problems and require existing licenses to be revised. What is worse, the tax will destroy the present rational use of natural resources and provoke social and political destabilization in a number of regions. For many oil provinces, especially the old ones located in Tatarstan and Bashkortostan, the tax may well turn out to be too much.
In other words, the government’s draft law will stimulate operations at the richest oilfields and will force companies to abandon deposits as soon as oil production costs increase, leaving the problems to future generations.
Meanwhile, the adoption of the draft law "On
Sharing" has made both the Duma and Finance Ministry drafts obsolete.
gives all interested parties – the State Duma and the government – one
more chance to draft a sensible version of the Tax Code’s article "On
Sharing" to make it possible for Russia to take part in serious talks
potential investors. (The author is a member of the Expert Council,
of a State Duma commission in charge of Production Sharing
By MIKHAIL SUBBOTIN / Special to Oil, Gas and Energy
ARCO has signed preliminary agreements with two local governments covering E&P in the Soviet Far East.
ARCO's protocols with regional councils of Magadan and the Chukotka Autonomous Area pave the way for ARCO to negotiate for exclusive rights for onshore and offshore E&D. Target areas will be identified in subsequent negotiations. The councils will help ARCO obtain required legal approvals of the Soviet and Russian Federation governments.
January 12, 1993
In a deal that could lead to a joint venture agreement, IPC and Chukotneftegasgeologia have a joint study agreement covering an area in the Chukotka region. The two will assess the technical and economic feasibility of producing small onshore oil fields in the ANADYR ANDKAHTYRKA BASINS,aimed at yielding exports for western markets.
Crude from the two basins has a high wax content, but it is low in sulfur and the fields are close to the Pacific Coast.
IPC said depending on results of the study, it could enter a production agreement with Chukotneftegasgeologia in the next 2-5 years.