2012 Annual Report (p.17-23) Adobe PDF version - Lukoil

Annual Report 2012 21Spending on prospective projects during 2012 amounted to$3.4 billion, which is more than 28% of total capital spendingin 2012. In Russia the Company invested more than $1.4 billionfor development of the Caspian region, and about $0.5 billion onfields in the Bolshekhetskaya Depression. The greater partof foreign capex in the exploration & production segment in2012 was at the West Qurna-2 field in Iraq.The Imilorskoye field has enormous resource potential, andownership by the Company of developed infrastructure close bywill reduce development costs. Efficient development of the fieldwill create new jobs and increase tax revenues to the state budget.First production from Imilorskoye is expected in 2015.>Capital expenditures in prospective regions in 2012DescriptionTwo oil fields have been discovered at the territory:Imilorskoye + Zapadno-Imilorskoye (1987) and Istochnoye(1988). The company offered a single payment of 50.8 billionrubles for mineral usage rights, representing $1.2 per barrel ofproved and appraised reserves. Geological and recoverable oilreserves (C1+C2) at the area as of January 1, 2012 were855.5 and 193.7 million tonnes, respectively.Prospective regions in RussiaWestern SiberiaWestern Siberia is an established region of hydrocarbonproduction for LUKOIL, and most of its oil fields are highlydepleted. Prospects for increase of production of hydrocarbonsin the region depend on the acquisition of new licenses,intensification of drilling work and use of secondary and tertiaryrecovery techniques (hydraulic fracturing, sidetracking,horizontal wells, etc.). Increase of hydrocarbon productionwill also be achieved through the development of gas fieldsin the region.Imilorskoye + Zapadno-Imilorskoye and Istochnoye fieldsThe area is located in Surgut administrative sub-division ofKhanty-Mansiysk Autonomous District, 65 km south-west ofthe city of Noyabrsk, which is in Yamal-Nenets AutonomousDistrict. A communication corridor passes at a distance of29 km from the center of the area, and consists of a road withhard surface connecting Surgut with Noyabrsk, a trunk oilpipeline connecting the Kholmogory and West Surgut pumpingstations, power transmission lines (500, 220 and 110 kilovolt)and a gas pipeline connecting Kholmogorskaya compressionstation to the Surgut gas-processing plant. A pipeline carryingmarketable crude oil passes 15 km to the east of the areaboundary, and trunk oil and gas pipeline routes pass 55 km tothe east of the boundary.The Imilorskoye field is directly adjacent to the largest LUKOILfield currently in development – the Tevlinsko-Russkinskoyefield – and shares many of its geological features. The regionaround Imilorskoye is well equipped with facilities, having allof the necessary production and transportation infrastructurefor field development, so Imilorskoye can be made ready andbrought into production relatively quickly and with best-possibleeconomic and synergy effects.LUKOIL strengthened its base in Western Siberia during 2012through the acquisition of a license, which gives rights at theImilorskoye + Zapadno-Imilorskoye and Istochnoye fields.Geological and recoverable oil reserves (C1+C2) at the area asof January 1, 2012 were, respectively, 855.5 and 193.7 milliontonnes. The license will enable the Company to greatly increase itsreserves and raise future production levels in the strategic regionof Western Siberia.Khanty-MansiAutonomousDistrictDistance to a fieldoil pipelineImilorsky21 km60 km30 kmYamal-NenetsAutonomousDistrictDistance to trunkoil pipelineNoyabrskGCS KogalymskayaKOGALYM