OREANDA-NEWS. January 21, 2010. Managers and senior staff of the Ministry of Finance and the Ministry of Natural Resources visited TATNEFT on January 18-19 in the framework of studying the experience of stabilizing and increasing oil production in the oldest oil producing region of Russia, reported the press-centre of TATNEFT.

The purpose of their visit was to familiarize with the experience of Tatarstan and TATNEFT, which has substantial developments in the matter of the State promotion of crude oil production from small and marginal oil fields, as well as in application of new highly efficient technologies of crude oil recovery enhancement.

Sergey Shatalov, Deputy Finance Minister, Sergei Donskoy, Deputy Minister of Natural Resources and Environment of the Russian Federation, Managers of the Department of Economics and Finance of the Ministry of Natural Resources, the Department Head of taxation and customs tariff policy of the Russian Federation Finance Ministry, together with the Managers of OAO TATNEFT discussed possible approaches for governmental incentives to increase the crude oil production. In particular, they discussed putting into development the small oil fields and small business development in this area. In addition the proposals of TATNEFT's Management regarding the State aid in the development of deposits of extra-viscous oil (natural bitumen) and introduction of oil recovery enhancement methods were discussed.

During the two days stay the delegation visited a number of the Company's facilities, where it got familiarized with new technologies for the effective development of hard-to-recover and marginal oil reserves, extra-viscous oil recovery, and also utilization of associated petroleum gas (APG), etc. directly on site.

The delegation also visited a plot at the Ashalchinskoye field, where pilot operations are on the way to recover extra-viscous oil and where the only in Russia slant mast drilling rig operates for drilling horizontal wells. The delegation was given a chance to get acquainted with the whole complex technological chain of registration and control of the crude oil produced with application of advanced technologies from the wellhead to realization of marketable products to Transneft system.

Possible measures of the State support to increase production from small fields, enhanced oil recovery, development of extra-viscous oil fields, as well as development of the small and medium-size businesses in the oil sector were discussed in the course of the working meeting together with the top management of TATNEFT.

The meeting participants noted that today with increasing depletion of the main large crude oil fields in Russia the development of small fields with hard-to-recover reserves, the share of which in the country is quite substantial, is becoming increasingly relevant.

During the final meeting with Shafagat Takhautdinov, General Director of the Company, it was stated that the solution of all the above mentioned problems is only possible under the condition of joint work together with the concerned ministries of the state and subsoil users.

The parties agreed that, given the complexity and capital intensity of new technologies introduction allowing to more effectively and efficiently exploit the mineral wealth, high unit cost of development and construction of small fields, there is a need for governmental support at the level of economic stimulation and tax incentives application.

The meeting participants agreed on adopting a joint plan for further activities with regard to the issues discussed.