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Company in Mass Media

Polyarnoye Siyanie’s second breath

16.09.2016 http://izvestia.ru/news/632630

Once a troubled asset, the deposit seems to be getting back to life. As of September 2016, Polyarnoye Siyanie deposits are estimated at 6 million tons of oil. In this regard, the company started a 19-well drilling program scheduled for completion in 2017-2018, an insider told Izvestia. Experts say growing oil prices will help investors to restore operations.

According to Izvesita’s source, when the oil field changed owner late last year, its reserves were estimated at 3 million tons. Now they have nearly doubled, to 6 million tons. Rus’-Oil spokesman confirmed this influence.

“This year, Rus’-Oil ordered a re-interpretation of all existing seismic survey data with RusGeoService; as a result, DeGolyer and MacNaughton audit firm acknowledged the increase of reserves to 6 million tons”, said the spokesman, adding that most of the growth was thanks to the Yuzhno-Dyushevsky licensing site.

This allowed Polyarnoye Siyanie to proceed with the implementation of a 19-well drilling program scheduled for completion in 2017-2018. According to Rus’-Oil, a new technology will be used – without building cluster sites, using Mobistack floating slab foundation. The company expects to produce 350,000 tons of oil in 2017, 400,000 tons in 2018 and 490,000 tons in 2019.

Until recently, Polyarnoye Siyanie, established back in 1992, was considered a troubled asset. Until 2015, it was owned on a parity basis by ConocoPhilips, US, and Rosneft (which acquired its 50% share from state-owned ArkhangelskGeology).

The company owns five oil fields in Ardalinskaya Group, Nenets Autonomous Okrug: Ardalinskoye, Vostochno-Kolvinskoye, Oshkotynskoye, Zpaadno-Oshkotynskoye and Tsentralno-Khoreiverskoye (the latter was discovered and developed in 2008).

In the recent years oil production at Polyarnoye Siyanie was dropping rapidly – from 700,000 tons in 2010 to about 520,000 tons in 2012, and further down to 410,000 tons in 2014. ConocoPhilips declared its intention to sell the asset back in 2012. Ultimately the company was sold to foreign investors in late 2015 and passed to Rus’-Oil, General Director Sergey Podlisetsky, for management.

According to Alena Afanasyeva, Senior Analyst at Forex Club, the enterprise turned out a lucky acquisition for the new owner, even though it was considered as a depleted asset with declining production.

“Favorable market situation dropped the prices inside the oil-and-gas industry, which allowed the investors to select the most attractive and profitable options given the current pricing. For example, Brent oil was traded at about $35 a barrel when Polyarnoye Siyanie was sold late last year; today oil is up to $46 and keeps testing the $50 mark”, says our source.

Andrey Dirgin, Director Analytics Department at Alfa-Forex, adds that any investment into oil industry can be considered a positive factor both for the industry and for the Russian economy in general.