Ural-Oil Produces Millionth Ton Of Crude

Ural-Oil, a 100%-owned subsidiary of LUKOIL-Perm (operator of LUKOIL Overseas' Russian projects) has produced its millionth ton of crude oil since establishment in 2002.

Ural-Oil is developing 35 oil and gas fields (most with complex geological conditions) in 17 administrative districts in the vicinity of the Kama River. The company is constantly increasing oil production volumes. Thus, in 2002 the total volume of annual production was 34,000 tons, with 73,000 tons in 2003 and 551,000 tons in 2004.

The production target for 2005 is 545,000 tons. Drilling of 9 new wells and 6 side tracks is expect to contribute to delivering 582,000 tons of production in 2006.

In addition, the company is currently working on developing its oil and gas assets through establishment of new capacity. In particular, in late December 2004 it was declared the winning bidder and the auction for the Alexandrovskoye filed in Kungur Rayon (south Perm Oblast) with proved reserves of 1 million tons of oil. The license was received in March 2005, with pilot production at the field beginning at the same time.

During a period of six months two oil wells with a combined production rate of 24 tons of oil per day were put into operation and field infrastructure, including an oil pipeline, power line and access road, was built. Oil production in 2005 is expected to reach about 6,000 tons, with 10,000 tons and growing then onward. Seismic will be acquired on the license area before the end of 2006.