Offshore staff
MOSCOW Rosneft and BP signed shareholder and operating agreements for joint activity on the East-Schmidt (Sakhalin-5) and the West-Schmidt (Sakhalin-4) license blocks.
Projects are implemented under the effective legal framework between Rosneft (51%) and BP (49%). Operational management of the projects will be conducted by CJSC Elvary Neftegas, which was established in 2003 for exploration on the Kaigansko-Vasuykansky license block (Sakhalin-5). Plans are in place for exploration activities on both blocks. BP will finance drilling of six wells until commerciality is confirmed. Following commercial discovery, expenses will be reimbursed from Rosneft's share of production.
Exploration on the blocks and design of the joint development strategy on Sakhalin-4 and Sakhalin-5 are being conducted by the two parties.
and Rosneft management believe considerable offshore knowledge combined with more than 75 years of Rosneft's experience in Sakhalin would allow the most effective use of modern technologies and compliance with health, safety, security and environmental requirements.
BP's Lord Browne and Sergey Bogdanchikov from Rosneft signed a joint statement expressing satisfaction with the achieved agreements that open up new opportunities for both companies at the next stage of their cooperation.
East-Schmidt covers 11,800 sq km (4,556 sq mi) and West-Schmidt covers 9,400 square km (3,629 sq mi) in the north offshore Sakhalin in the harsh climate with complex ice conditions and sea depths from 100 to 200 m (328-656 ft).
There are over 22 prospective structures identified on the blocks. Considerable scope of exploration activities has been recently conducted on the blocks. Joint investment to date exceeds $80 million. Future investment is planned to reach $700 million.
The exploration program specified by the license agreements includes 2D and 3D seismic acquisition on each block as well as drilling of three exploratory wells.
Drilling of one exploratory well on each block is planned for next year.
11/27/2006
