"RBC". RussNeft to Start up Shapshinsk Oilfields in KhMAO by the End of 2008.

The two other Shapshinsk oilfields in KhMAO (Verkhne- Shapshinskoye and Sredne-Shapshinskoye) are to be started up by the end of 2008. These time constraints for the start-ups of the oilfields were set by the Company to be subsequently introduced into the licenses at the meeting the License Observance Commission of RF Natural Resources Ministry. As of today the Natural Resources Ministry has withdrawn its claims related to the observance of the license agreements at the three oilfields of Shapshinsk group.
According to the decision of the Commission meeting held on the19th of August 2004 the Company received a six-month notice on possible pre-term withdrawal of the licenses in case violations of the license terms persisted. Upon expiry of the notification term Rosprirodnadzor of KhMAO, an environmental inspection board, did the checking of the oilfields for availability of any violations of the terms specified in the license agreements. The checking showed that the Earth’s user had started to work actively at the oilfields having invested about 1.5 million rubles into geological exploration.
At today’s meeting the Commission resolved to recommend the Federal Agency on the Earth’s use to enter changes and add-ins into the terms of the license agreements on these oilfields specifying volumes and time constraints for fulfillment of the commitments taken by the Earth’s user.
The development of Shapshinsk oilfields with reserves of more than 100 million tons of crude oil is one of the strategic projects of the Company, as RBK was informed by RussNeft. According to the interlocutor of the Agency, due to the absence of transportation means and check-in system into Transneft’s main pipelines there was no way to actively develop Shapshinsk reserves. The Company also informed that by August 2005 they will put up a crude treatment plant (UPN) with a capacity of 1.5 million tons per year and that they have already designed a crude oil commercial record-keeping station. Currently equipment mounting, starting-up and adjustment are well under way at all the oilfields. The Company is also putting up a pressure oil pipeline that will extend over 18 km to be cut into the main pipeline. A 35 km-road from Irtysh River to the UPN, power supply lines and a crude oil collector have been provided for at the sites, as stated by RussNeft representative
The initial extraction volume is expected to be about 0.5 million tons of crude oil, and in future these oilfields may yield 1.5 million tons of crude oil per year.