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Kalmykia: Russia's new oil and gas Klondike

What does a common person know about Kalmykia? Steppes in the south of Russia, Buddhism. Also the name of Kirsan Ilyumzhinov, who tries to lift the republic’s economy, sounds familiar for many people. However, today this region, alongside with our northern areas, can become oil-and-gas Klondike… Kalmykia’s leader Kirsan Ilyumzhinov during his visit in Moscow made a report on oil and gas exploration works in republic.

What does a common person know about Kalmykia? Steppes in the south of Russia, Buddhism. Also the name of Kirsan Ilyumzhinov, who tries to lift the republic’s economy, sounds familiar for many people. However, today this region, alongside with our northern areas, can become oil-and-gas Klondike…

Kalmykia’s leader Kirsan Ilyumzhinov during his visit in Moscow made a report on oil and gas exploration works in republic. The report was read at the session of the Committee on social and economic situation improvement in Southern federal district.

Following the results of the session which was held under the chairmanship of Dmitry Kozak, plenipotentiary of the President of Russia in Southern federal district (who has been appointed the Minister of regional development just after the event), the report was accepted, according to which the Russia’s Ministry of natural resources is to provide full-scale realization of « The long-term program of studying and rehabilitation of mineral resources of Russia in terms of consumption balance and reproduction of mineral raw materials».

It is marked, that in the frameworks of the program it’s supposed to carry out the regional geophysical operations and deep drilling realization to explore Kalmykia’s drilling areas, where deep levels linked with commercial deposits of oil and gas; as well as the further expansion of exploration of uranium and titano-zirconium deposits in the republic.

It’s should be noted, that this summer Vagit Alekperov, the head of Lukoil oil major signed a cooperation agreement with Kalmykia’s president Kirsan Ilyumzhinov.

Right after Lukoil stated that it was likely to establish gasochemical plant in Kalmykia, tens of investors flood the steppe republic. Finally one has solved the fate of contracts on construction of Elista-Aksariysk gas pipeline which will allow expanding transport communication between Kalmykia and Russia. Furthermore, the negotiations with China on a scheduled flight establishing between Elista and Zhengzhou has been held successfully; and the high-level talks on construction of a Eurasia ship canal, linking the Black and the Caspian seas, have started. Some private companies started to invest in the republic’s economy.

By the way, the construction of oil and gas refining complex in Kalmykia will be launched in 3rd or 4th quarter of 2007. According to Lukoil CEO Vagit Alekperov, “the long-term strategy of the Company’s development includes the creation of a powerful extraction, transportation and refining complex of hydrocarbon materials in the Caspian region.”

The source of raw materials for deliveries to a plant will be the Lukoil’s deposits on North Caspian, where by 2012 it is planned to produce up to 10 million tons of oil and 12 billion cubic meters of gas per year. The complex construction was caused by the big gas discoveries in the Caspian Sea. Thus it can be brought about after 2010. There is every reason to believe that the first volumes of oil and gas from the Caspian deposits will be produced in 2009.

The detailed information about Business magazine Neftegaz. RU you can learn on www.neftegaz.ru

Author: Victoria Yudina

Source : Neftegaz.RU Magazine