OREANDA-NEWS. March 27, 2008. The joint-stock company Verkhnechonskneftegas” will be ready to start oil supplies to the Eastern Siberia–Pacific Ocean oil pipeline system in September 2008, said Mugammir Galiullin, General Director of Vercknechonskneftegas, to journalists during their visit to the Verkhnechonsk oil and gas condensate field.

According to him, the company is going to supply to the Eastern Siberia–Pacific Ocean oil pipeline system all 287,000 tons of oil produced by the company in the Verkhnechonsk field in 2008. “We asked Transneft about the terms of connection to the pipeline system for reverse pumping of oil and were allowed to connect to it on a temporary basis,” said he.

Mr. Galiullin added that in case of changes in the schedule of launching the Eastern Siberia–Pacific Ocean oil pipeline system, Verkhnechonskneftegas will have to adjust its oil production schedule. Mr. Galiullin explained that in late August 2007 the company approved the license agreement supplements that imply linking the beginning of industrial development of the Verkhnechonsk field with the start of oil supplies to the Eastern Siberia–Pacific Ocean oil pipeline system.

According to Mr. Galiullin, Verkhnechonskneftegas will determine its logistical scheme of oil supplies to customers by mid-summer, and the company shareholders will by this time sign an agreement for organization of oil sales.

Mr. Galiullin added that the cost of oil production in the Verkhnechonsk field will amount to \\$3–5 per barrel.

As reported earlier, last week Verkhnechonskneftegas completed construction of the linear part of the oil pipeline running to the Eastern Siberia–Pacific Ocean oil pipeline system. The total cost of oil pipeline construction from the Verkhnechonsk field to the Eastern Siberia–Pacific Ocean system is approximately 7 billion rubles, including 1.25 billion rubles for construction of the linear part. The total length of the oil pipeline to the point its tying in the Eastern Siberia–Pacific Ocean oil pipeline system will be 89 kilometers. The oil pipeline is being constructed by the open joint-stock company Sibtruboprovodstroi (Novosobirsk).

It was also reported that the Ministry of Industry and Energy informed the Government of the Russian Federation that construction of the first line of the Eastern Siberia–Pacific Ocean oil pipeline system will be completed in Q4 2009. Later, in the end of last year, the Ministry said that, according to the integrated schedule of construction, the first line of the oil pipeline system will be completed in late 2008. Transneft, however, suggested that its Board of Directors should approve changes in the investment program of the company for 2008 and postpone the launch of the first line of the Eastern Siberia–Pacific Ocean oil pipeline system.

Verkhnechonskneftegas is the subsoil user of the Verkhnechonsk oil and gas condensate field, whose reserves are estimated at 159.5 million tons of oil of category C1, 42 million tons of oil of category C2, 0.44 million tons of condensate of category C1, 2.9 million tons of condensate of category C2, 56 billion cubic meters of gas of category C1, and 105 billion cubic meters of gas of category C2.

The major shareholders of Verkhnechonskneftegas are TNK-BP (with 68.4% of its shares) and Rosneft (with 25.94% of shares).