Russia to produce 80 million mt/year in East Siberia by 2025

Moscow (Platts)--14Mar2007

Russia expects to pump some 40 million mt/year of crude from currently
undeveloped fields in East Siberia by 2015 and raise the output further to 80
million mt/year by 2025, according to the industry and energy ministry in a
statement posted on its website Wednesday.
"Given the federal program on exploration and development of hydrocarbon
fields, crude output in East Siberia and Yakutia can reach 40 million mt/year
by 2015 and raise further to 80 million mt/year by 2025," the deputy industry
and energy minister Andrei Dementyev was quoted as saying.
The program will require total expenditures of some $102 billion, the
deputy minister said.
Until recently, the lack of transportation infrastructure limited the
development of East Siberian fields. But a year ago Russia started
construction of a new pipeline across East Siberia towards the Pacific Coast.
"The construction of East Siberia-Pacific Coast pipeline is to resolve
the problem," the ministry said, citing Dementyev. "The project's fulfillment
will allow Russia taking up to 6-6.5% of oil market in the Asian-Pacific
region."
The first 30 million mt/year stage of the pipeline, a link from the
oilfields around Taishet in eastern Siberia to Skovorodino in the Amur region
in Russia's Far East, near the border with China, is targeted for completion
in late 2008. An export terminal on the coast near the port of Nakhodka is
also to be ready in 2008, with initial deliveries from Skovorodino handled by
rail.
At the second stage of the project, the line will be extended from
Skovorodino to the Pacific Coast and the route's capacity will be expanded up
to 80 million mt/year. The timeframe for the second stage of the project has
not been set so far. Russia's industry and energy minister Viktor Khristenko
has recently said the expansion might take place after 2012-2013, when the
information on East Siberian hydrocarbons reserves is clarified.
Russia's Prime Minister Mikhail Fradkov Tuesday raised concerns over oil
companies' abilities to fill the second stage of the new pipeline. "Additional
efforts are needed to fill the line," Fradkov said, adding that the government
was planning to discuss the issue at a meeting in two-three months.
Analysts also question the country's ability to fill the second stage of
the pipeline with East Siberian oil. "We share the doubts of the Prime
Minister on the viability of the second phase of the ESPO," UBS said in a
research note.
Crude production in East Siberia could reach 30 million mt/year by 2012,
filling up the first phase of the ESPO by then, it said.
Russia's major oil companies are ready to fill the first stage of the
route with oil produced in West Siberia, the ministry said.
--Nadia Rodova, nadia_rodova@platts.com