Pipeliners

10 April 2007  – Upstream OnLine – Oil companies are taking so long to explore and develop oilfields in East Siberia that a major pipeline to the Pacific coast could be delayed, Russia's Natural Resources Ministry warned today. The ministry plans to gather all the main companies working in East Siberia for a meeting next month to discuss preparations for building the pipeline, which would take 1 million barrels per day to the Pacific coast. Russian crude oil pipeline monopoly Transneft plans to finish a first, 600,000 bpd leg to Skovorodino near the Chinese border next year, but it will only be expanded and extended to the Pacific if enough oil is found in East Siberia. At the beginning the pipeline will take supplies from Russia's traditional oil heartland of West Siberia but later Russia plans to rely on new flows from the relatively unexplored regions of East Siberia and Yakutia. "Based on the data submitted so far, right now the start of work on the second leg of the pipeline could be put back by three or four years at best," Sergei Fyodorov, head of geology at the ministry, was quoted as saying by RIA news agency. That could push the target date for the pipeline to reach its full capacity of 1.6 million bpd back to at least 2015. Deputy Resources Minister Alexei Varlamov told a meeting of ministry officials that oil producers were not keeping up with the government's plan for survey work in East Siberia, which could mean there would not be enough oil to fill the pipe. Last year explorers spent only 6.5 billion roubles ($250 million) compared to the government's expectation of 20 billion roubles, he said. "Around 25 billion roubles a year needs to be spent on this on average to guarantee the resource base," he added. He said the lack of work in East Siberia was also linked to delays by gas monopoly Gazprom in developing gas supplies in the region, which meant oilfield licences adjacent to gas fields such as Chayandinskoye could not be awarded. The heads of the ministry and its agencies told Reuters they planned to re-examine and possibly revoke some licences, to speed up work on auctioning licence blocks, draw up new licence areas and to keep a check on progress.