UPDATE 2-Russia launches Vankor oilfield, eyes China market
* Oil reserves 520 mln tonnes, gas reserves 95 bcm
* Annual oil output set to peak at 25.5 mln tonnes
* Will boost Russian oil supplies to China
(Recasts, adds quote, details, background)
By Katya Golubkova
VANKOR OILFIELD, Russia, Aug 21 (Reuters) - Russia launched a major new oilfield in the Arctic on Friday that will allow the world's second-largest crude exporter to revive flagging output and carve a greater share of China's growing energy market.
The Vankor field will supply state-controlled oil leader Rosneft (ROSN.MM) with 25.5 million tonnes, or 510,000 barrels per day, of oil when it reaches peak production in 2014. This is equivalent to nearly one-quarter of the firm's output last year.
"A new oil and gas province will be established here in the near future," Prime Minister Vladimir Putin said at a ceremony to launch the field, over 100 km (63 miles) north of the Arctic Circle, addressing several billionaire oil industry executives.
Russia expects oil production to recover this year after falling for the first time in a decade in 2008. Putin said Vankor, which is being launched after several delays, would feed into pipelines under construction to China and the Baltic Sea.
China has agreed to lend $15 billion to Rosneft and another $10 billion to oil pipeline monopoly Transneft (TRNF_p.MM) in exchange for supplies of 300 million tonnes of Russian oil over two decades, a large part of which will originate from Vankor.
Crude will be delivered from Vankor through a 556-km spur to Transneft's nationwide pipeline system. Deliveries to China are scheduled to begin from 2011 via the East Siberia-Pacific Ocean pipeline and a further link to the Chinese border.
Rosneft said in a statement that oil from Vankor, which it acquired in 2003, would also feed a major new petrochemical complex the company is planning to build in Russia's Far East.
Putin said the field would also supply some crude to the BTS-2 pipeline, a route now under construction to bypass Belarus in delivering Russian oil to the Baltic port of Ust-Luga. This route is scheduled for completion in the third quarter of 2012.
Rosneft is responsible for over one-fifth of Russia's oil output and has grown quicker than any other Russian oil company in the past few years after acquiring assets of the bankrupt oil firm YUKOS and investing in major new fields.
The company said Vankor, in the north of the Siberian region of Krasnoyarsk, held 520 million tonnes, or 3.8 billion barrels, of oil reserves and 95 billion cubic metres of gas. This year, the field will produce 3 million tonnes, or 22 million barrels.
Declining or stagnating output has been of grave concern to Putin's government, which depends heavily on revenues from oil sales.
Analysts say initial production at Vankor, added to output from new fields launched by rivals LUKOIL (LKOH.MM) and TNK-BP TNBPI.RTS, will allow Russian oil output to return to growth in 2009 after falling 0.7 percent to 488 million tonnes in 2008.
"The first seven months showed 0.8 percent output growth in Russia, and with Vankor's 3 million tonnes, it's 0.5 percent more," said Valery Nesterov, oil analyst at Troika Dialog.
"This means that Russian output will grow by about 1 percent compared with last year." (Additional reporting and writing by Vladimir Soldatkin and Robin Paxton; Editing by Keiron Henderson)
- Tweet this
- Share this
- Digg this
- UK troops in largest armoured deployment in Eastern Europe for six years
- In class obsessed Britain, tweet of 'white van' man hits nerve
- European Parliament may propose Google break-up in draft resolution
- Aviva in £5.6 billion deal to buy Friends Life after pensions shake-up
- Conservatives, states set to launch legal blitz against Obama over immigration