OilVoice - Petrosibir Announces New Drilling in Ukraine

Petrosibir Announces New Drilling in Ukraine

Monday, January 25, 2010

Petrosibir and Ukraine's largest oil and gas company, Ukrnafta, have commenced drilling of their third development well as partners in the Lelyaki oil field next to Poltava. The well is in close proximity to pipeline infrastructure for rapid tie in.

"This new well is an ongoing part of our plan to fully exploit the remaining oil reserves in the Lelyaki field through optimal placement of infill production wells. We will increase the production volumes and cash flows in 2010 and this is very positive for the company," said Zenon Potoczny Petrosibir's President.

The Lelyaki oil field was previously one of the largest producing fields in the Soviet Union, with a cumulative production of 385 million barrels of oil. The total daily production in 2009 was over 600 barrels per day. The new production well #304A is the third new well to be drilled since the company acquired a forty-five percent stake in Lelyaki. The well has a projected total depth of 2,015 meters and will be drilled to further develop the P1, P2 and K-1 productive reservoirs. Net drilling cost is expected to be SEK 3 million (CAD 450,000).

In addition, Petrosibir anticipates re-entering and sidetrack drilling of three suspended wells in different parts of the field during 2010. These well interventions show very good economics as the capital cost is much lower than new drilling.

"Our strategic partnerships with leading Ukrainian oil and gas companies like Ukrnafta are a key reason for our success in Ukraine. Ukraine is important to world energy markets. It is one of Europe's largest energy consumers, and wants to increase production from its own basins," said Robert Karlsson, Petrosibir's CEO.

The country's proven reserves include 400 million barrels of oil and 1.1 trillion cubic meters of gas (seven billion barrels of oil equivalents).