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Future Plans
In 2007, overall production of oil and gas condensate (including 100% of production at Udmurtneft and Polar Lights) is expected to increase to 90 million tonnes over the 80.6 million tonnes produced in 2006. Yuganskneftegaz and Sakhalin-1 will be the main sources of growth. Bringing proved oil reserves at existing assets onstream by drilling 639 new wells and carrying out hydraulic fracturing operations at 440 wells will allow for this production increase.
Gas production is expected to increase to 15.2 billion cubic meters (1.6 billion cubic meters more than in 2006). Growth will be achieved primarily at Purneftegaz fields, in particular now that the Tarasovskoye complex gas treatment plant has become fully operational.
In order to replenish the resource base in 2007, provisions have been made for increased geological exploration work. 2D and 3D seismic survey work will reach 575 linear kilometers and 1,830 square kilometers, respectively. Exploratory work will generally be concentrated on the Vankor group of fields, fields at Yuganskneftegaz and on the Sakhalin shelf.
Medium-term Strategy
Rosneft's medium-term strategic efforts are focused on Eastern Siberia, where the Company is currently developing the vast Vankor field in the Krasnoyarsk Territory and, in cooperation with TNK-BP, the Verkhnechonsk field in the Irkutsk Region.
A recent evaluation has put the Vankor field's proved SPE reserves at 946 million barrels [135 million tons] of oil. Production is scheduled to start in 2008 and is expected to last for nearly 30 years. Commissioning the Vankor pipeline will not only give Vankor oil substantial export potential, but it will also help make economically viable the Far East Pipeline — Transneft's landmark project. The countries of the Asia-Pacific region, among the fastest growing in the world in terms of energy demand, are expected to be the primary customers for the Vankor field in the medium-term.
The Verkhnechonsk field, which is being developed under a three-year pilot production program unveiled by TNK-BP in 2005, will also be instrumental in filling the Far East pipeline. Rosneft is working actively to help launch full production prior to completion of the pilot production period.
Long-term Strategy
While the Sakhalin-1 project will play an important role in Russia's short-term growth strategy, Sakhalin Island also offers one of Russia's most exciting potential sources of sustainable long-term growth. Rosneft currently controls over one third of total Sakhalin offshore oil and gas resources, and while still at the early stages of exploration, the Sakhalin-3, Sakhalin-4 and Sakhalin-5 projects (Rosneft ownership of 49.8%, 51% and 51%, respectively) hold great potential to make Rosneft a major player in the region for years to come.
Rosneft's exploration project on the West Kamchatka shelf, being carried out in cooperation with Korea's KNOC, is also an important element of Rosneft's long-term growth strategy, as the Company's potential resources there could eventually rival those of the entire Sakhalin shelf.
The enormous Vankor province in the Krasnoyarsk Territory contains a number of 100% owned structures surrounding the main Vankor field, which is already under development. A recent evaluation by DeGolyer and MacNaughton estimates that 4.4 billion barrels [601.67 million tons] of potential recoverable oil resources could be located at the structures surrounding the Vankor oilfield subject to successful exploration.
Finally, substantial resources on both the Black Sea and Sea of Azov shelves as well as at the enormous Kurmangazy structure in Kazakhstan are key to Rosneft's long-term strategy of remaining a key oil supplier to markets served by the Caspian Pipeline Consortium and Mediterranean export routes. A recent evaluation by DeGolyer and MacNaughton has placed the latter's estimated potential recoverable oil resources at nearly 13.16 billion barrels [1.80 billion tons].