From taiga to tank: hard scrabble for new oil

Fri Sep 9, 2011 10:37am EDT
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article | Single Page
[-] Text [+]

By Melissa Akin

VERKHNECHONSK, Russia (Reuters) - Oil was discovered in 1978 deep under the forest floor in this corner of Eastern Siberia, but the challenges of drilling here were created hundreds of millions of years ago in a churn of silt and sea water.

"There was an ocean here, and it covered all this land," Igor Rustamov, head of Verkhnechonskneftegaz, the TNK-BP led operator of the field, said.

"There was a migration of liquids into the reservoirs."

The modern-day result is one of the more difficult drilling propositions in the Russian oil industry -- layers of hard rock and pockets of salt deep under the Siberian taiga, 1,200 km from the nearest major city.

The oil which emerges is shipped eastward through a newly built $25 billion pipeline and loaded onto tankers at the Pacific port of Kozmino, where it competes with Middle Eastern crude in the lucrative Asian market.

It also crosses the Pacific to refineries in the United States, where it has acquired a following as a replacement for crude from Alaska's declining North Slope.

For all the field's complexity, such challenges may be the new normal in Russia, the world's largest oil producer, which is struggling to keep output steady at 10.2 million barrels per day as Soviet-era fields decline.

Fields like Eastern Siberia's Verkhnechonsk, set to pump nearly 100,000 bpd this year and reach its plateau of over 150,000 bpd in 2014, are ever more complex and remote, but essential to maintaining Russia's oil exports as the Soviet oil heartland of Western Siberia declines.   Continued...