LUKOIL and Bashneft signed an agreement to establish a joint venture and stipulate conditions for the development of two fields named after Roman Trebs and Anatoly Titov. According to the agreement, LUKOIL will purchase 25.1% of an ANK Bashneft subsidiary, while the license and subsoil use rights for R.Trebs and A.Titov fields will be re-issued in favor of this subsidiary. In its turn, the joint venture will purchase from LUKOIL 29 exploration wells located in the license area. Lukoil will pay 4.768 billion rubles ($167 million) for the stake and book its share of reserves, Chief Executive Officer Vagit Alekperov, said at a signing ceremony in Moscow today.
The parties also agreed to transport the oil from R.Trebs and A.Titov fields via the Varandey Oil Export Terminal owned by LUKOIL to the Barents Sea coast, where the crude will be loaded into tankers. The parties will consider supplying the produced associated petroleum gas to the energy centre of the Yuzhnoye-Khylchuyu field, which is developed by Naryanmarneftegaz (a joint-venture of LUKOIL-70% and ConocoPhillips-30%). The associated petroleum gas will be used for generation of electric power to support the activities of the production units at R.Trebs and A.Titov fields.
In February of 2011, Bashneft obtained a license for a federal-level site of subsurface resources, including R.Trebs and A.Titov oil fields, for a term of 25 years. Bashneft had agreed to pay approx. RUB 18.5 billion for the license. The license area, 2,151 sq km in size, is located in the Nenets Autonomous District. The total recoverable oil reserves of commercial categories (С1+С2) located within the license areas of R.Trebs and A.Titov fields, as booked in the state balance sheet, reach 140.1 million tons. Developing Trebs and Titov will require $6 billion of investment, Alekperov said. The field may start production at the end of 2013 or start of 2014.