Project Profile

Location: Northern Irkutsk region, southeastern Siberia, Russia
Production: 7 million tonnes/year
Reserves: 1,099 mln boe
Start-up Year: October 2008

Verkhnechonskoye (VC) field is a field located in the northern Irkutsk region of Russia, in Siberia. Commercial production at the Verkhnechonskoye (VC) field began in October 2008. Verkhnechonskneftegaz (VChNG) is the operator of the field. The shareholders in VChNG are TNK-BP with 74% and Rosneft with 25.94%. (the 0,06% interest is hold by minority shareholders). Oil from the field is transported via a section of the East Siberia — Pacific Ocean pipeline, which is operating in reverse direction, to Taishet and further to Rosneft’s Angarsk Refinery. To implement this shipment scheme, in July 2008, Rosneft and TNK-BP signed an agreement under which TNK-BP’s share in crude oil produced by Verkhnechonskneftegaz is fully or partially swapped for Yuganskneftegaz’s crude until the East Siberia — Pacific Ocean pipeline completion. Yuganskneftegaz’s crude is shipped in a westward direction as decided by TNK-BP. During the construction period of the project, there were a series of facilities to take advantage of the huge potentials of the field:

- An oil pipeline laid from the VC Field to the Oil Pump Station - 10 of the pipeline -  system Eastern Siberia - Pacific Ocean
- Oil treatment unit (OTU-1) constructed and expanded
- A system of oil gathering from well pads constructed
- Formation pressure maintenance system constructed and expanded
- Power stations 1 & 2 of the capacity 32.6 MW constructed
- A 85km long road from VC Field to the Talakanskoye field constructed to organize year-round traffic to the Verkhnechonskoye Field

2009 was the first full calendar year of production at the field. Oil production at the field in 2009 was 8.6 mln barrels (1.2 mln tonnes), of which the Rosneft share was 2.2 mln barrels (306 thousand tonnes) or 25.94%. A total of 38 new production wells were brought into operation during the year, and the number of wells in production at the end of the year was 59. Until November 2009, oil from Verkhnechonskoye was transported via a section of the Eastern Siberia – Pacific Ocean (ESPO) pipeline operating in reverse. After the first section of the ESPO pipeline was commissioned, oil supplies began to be exported via the port of Kozmino. Rosneft and TNK-BP concluded a shareholder agreement in November 2010, which gave Rosneft additional rights related to managing the Verkhnechonskneftegaz company. Oil production at the field in 2010 was 19.0 mln and the share of Rosneft was 4.9 barrels or 25.94%. A total of 44 new oil wells were brought into operation during the year, and the number of wells in production at the end of the year was 88. TNK-BP boosted production of Verkhnechonskoye oil and condensate field in the northern Irkutsk region of Russia to 7 million tonnes/year in end of 2012. The field produces cold, waxy oil from a reservoir complicated by salt in the rock matrix. The proved hydrocarbon reserves are 1,099 mln boe. DeGolyer & MacNaughton won the contract for the reserves estimation in 2010.

Operators:

Verkhnechonskneftegaz (VChNG): Operator with 100% interest

TNK-BP: 74% interest in VChNG
Rosneft: 25.94% interest in VChNG

Beijing Gas Group: 20% interest (bought from Rosneft)


Contractors:

DeGolyer & MacNaughton: Contract for the reserves estimation