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PetroNeft Drills First Well in Arbuzovsjkoye Field

2012-08-27

Russia-focused PetroNeft Resources announced that it has begun the drilling of the first of 10 wells in its Arbuzovskoye field development program on Monday.

The onshore Arbuzovskoye field, on license 61 in the Tomsk Oblast in Western Siberia, contains in excess of 13 million barrels of oil, according to PetroNeft. Arbuzovskoye is the firm's second production development.

PetroNeft said that the Arbuzovskoye No.1 well is currently producing 300 barrels of oil per day (bopd), with negligible water production, through a recently-constructed seven-mile spur pipeline to the nearby Lineynoye oil processing facilities. The firm pointed out that the rate is currently constrained by an electrical fault with the pump that is preventing it from operating at its optimum rate.

Meanwhile PetroNeft reported that total oil production from both its Lineynoye and Arbuzovskoye oil fields is currently steady at around 2,000 bopd.

"We are delighted to have commenced drilling of the first of 10 planned new production wells at Arbuzovskoye where our existing well has demonstrated very encouraging production characteristics. We will focus on developing Arbuzovskoye and seek to steadily build on our existing production profile and positive cashflows throughout the remainder of the year," PetroNeft CEO Dennis Francis said in a statement Monday.

Oil analysts at London-based FoxDavies Capital described PetroNeft's update as "positive".

"With the commencement of drilling of the first of ten new production wells on the Arbuzovskoye oil field, Russia, we expect production trajectory to be north bound in near to medium term," they said.