CHARLIE TAYLOR

PetroNeft Resources has said that its Arbuzovskoye 106 well in the Tomsk region in west Siberia is now in production with a flow of 170 barrels of oil per day (bopd).

The oil and gas exploration firm also said its Arbuzovskoye 103 is now drilling ahead.

The Tungolskoye horizontal section meanwhile is reported to be proceeding slowly with production results set expected in January. The pilot hole previously confirmed the structure, the net pay (8.2 m) and commercial oil flow (100 bopd non-stimulated) at the crest of the structure. The well is being drilled under a turn-key contract so additional time will not result in additional cost, the group said.

It said the main regulatory approvals required for the development of the Tungolskoye field have been obtained and the tendering process for the various services and materials required for this work programme is well underway.

"The pilot hole at Tungolskoye has achieved its objectives in confirming the structure, net pay and oil flow and we look forward to the production test result from our first horizontal well in the New Year," said chief executive Dennis Francis.

Drilling at PetroNeft’s Sibrayevskoye 373 well is expected to start in February.

The firm said the vast majority of operating costs and capital expenditure for its Siberian projects are denominated in roubles, which it said acts as a natural hedge to falling oil prices. PetroNeft said this should also enable it to undertake more capital expenditures pursuant to the $45 million farm-in carry being financed by Oil India.