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LUKOIL plans to drill from 2 to 4 exploratory wells in Ghana in 2012

November 30, 2011, 19:24 UTC+3

One of Russia’s biggest oil companies LUKOIL plans to continue an intensive development of oil fields in West Africa next year

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MOSCOW, November 30 (Itar-Tass) —— One of Russia’s biggest oil companies LUKOIL plans to continue an intensive development of oil fields in West Africa next year, Vice President of the Company Leonid Fedun said.

The company plans drill from two to four exploratory wells in the Republic of Ghana in 2012, he said at the last week’s presentation of the financial report on the company’s activity in January-September 2011.

In his words, LUKOIL plans to drill two holes in Ghana before the end of the year. “It is necessary to drill one or two exploratory wells,” Fedun said, adding, “The country has hydrocarbons. But the question is in the setting up of headers.”

“In general, an exploratory drilling is always linked with big risks,” he said. “The company has already drilled several exploratory holes. The first one yielded good results. The second – satisfactory result. But the third one was without hydrocarbons,” Fedun said, adding, “I cannot say that we are satisfied with the results of our activities, but we should continue drilling.”

“As a whole, LUKOIL explored seven blocks, but only two of them are ready for further development,” he said.

In July-September 2011, the company wrote off 161 million U.S. dollars of spending assigned for the drilling of two exploratory holes in Ghana. Earlier, LUKOIL specialists reported that the drilling of wells at Jata and Chita deposits of a deep-water block in Ghana showed that they have no commercial reserves of hydrocarbons.

The company’s written-off funds for the exploration of fields reached 165 million U.S. dollars in July-September 2011 and 215 million U.S. dollars in the first nine months of the year.

In addition, the company plans to represent its development strategy in the period up to 2021 in December 2011. The program envisages investments worth more than 100 billion U.S. dollars, including 24 billion U.S. dollars in the oil processing sector. A part of funds will be spent for the implementation of new projects.

The ratio of investments in oil production and refining will make up 75 to 25 percent.

The company’s management drafted three versions of the strategy with due account of the dynamics of macroeconomic indicators. The Board of Directors will make a decision pertaining to the final version of the company’s development strategy.

In December 2011, the board is expected to adopt the company’s three-year strategy, which considers as the basic scenario the oil price at the level of 95 U.S. dollars per barrel in 2012.

LUKOIL is one of the world’s leading vertically integrated oil and gas companies. Main activities of the company are exploration and production of oil and gas, production of petroleum products and petrochemicals, and marketing of these outputs. Most of the company’s exploration and production activity is located in Russia, and its main resource base is in Western Siberia. LUKOIL owns modern refineries, gas processing and petrochemical plants located in Russia, Eastern and Western Europe, near-abroad countries. The company’s products are marketed in Russia, Eastern and Western Europe, in near-abroad countries and the USA.

LUKOIL is the second largest private oil Company worldwide by proven hydrocarbon reserves. The company has around one percent of global oil reserves and 2.4 percent of global oil production. LUKOIL dominates the Russian energy sector, with 18.6 percent of total Russian oil production and 18.9 percent of total Russian oil refining.

At the beginning of 2010, LUKOIL proven reserves were at 13,696 million barrels of crude oil and 22,850 billion cubic feet of natural gas.

LUKOIL has an outstanding portfolio of production assets. The main production region for LUKOIL Group is Western Siberia. LUKOIL is carrying out international exploration and production projects in Kazakhstan, Egypt, Azerbaijan, Uzbekistan, Saudi Arabia, Colombia, Venezuela, Cote d’Ivoire, Ghana and Iraq.

At the beginning of 2010 the company’s marketing network embraced 26 countries, including Russia, former Soviet republics, European countries the near-abroad and European countries, as well as the USA and includes 199 tank farm facilities with total capacity of 3.13 million cubic meters as well as 6,620 filling stations, including franchises.

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