Shell
reveals huge Siberian oil budget
Posted: 17 September 2003
Shell has approved a budget of over $1 billion for the development
of the Salym fields in Western Siberia, Russia. The Supervisory
Board of Salym Petroleum Development N.V. (SPD), a 50-50 joint venture
with OAO Evikhon, has subsequently also approved this budget.
The Salym fields are West Salym, Upper Salym and Vadelyp. SPD holds
production licenses for all three fields. West Salym is the largest
of the three, accounting for about 80 per cent of the total estimated
recoverable reserves.
First oil from West Salym is expected by the end of 2005 with production
expected to peak at 120,000 barrels per day in 2009. Oil will be
evacuated via a tie-back to the existing Transneft pipeline system.
Development of Upper Salym has already begun and Vadelyp will be
developed in a second phase. The Salym group of fields is located
in the Khanty-Mansiysk Autonomous Okrug in Western Siberia, 190
kilometres from the town of Nefteugansk.
Russia is an important area of future growth for Shell’s
exploration and production business and the Salym project represents
an important building block in Shell’s Russia strategy. In
May, Shell announced with fellow shareholders the decision to invest
$10 billion in the second phase of the Sakhalin II integrated oil
and gas project on Sakhalin Island in the Russian Far East. Sakhalin
II is the largest single foreign investment project in the country.
Walter van de Vijver, a Group Managing Director and Chief Executive
Officer of Shell Exploration and Production said: "The decision
to proceed with the Salym fields is an important step forward in
the development of Shell’s presence in Russia, a country of
high strategic importance for the Group. Together with the recent
launch of the second phase of the Sakhalin II project, this strengthens
Shell’s position as the leading foreign direct investor in
Russia’s energy sector."
Shell is confident that work on the Salym fields will move ahead
quickly and efficiently, allowing the benefits of development to
be realised by the investors, the people of Khanty-Mansiysk Autonomous
Okrug and the Russian economy as a whole.
Posted by Richard Price,
Editor Pipeline Magazine
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