Russia's largest oil producer Rosneft has opened tenders to underpin its efforts to reverse a sizeable decline in oil and condensate production at its regional subsidiary Bashneft, which operates mature fields in the country’s central region of Bashkiria.
According to the company’s tender disclosure notice, Rosneft is prepared to pay almost $30 million to potential drilling contractors capable of committing to spudding 22 exploration wells between 2022 and 2024.
Proposed drilling locations are scattered across four major already-producing districts in Bashkiria, with the wells divided into several lots to enable different contractors to handle the jobs.
Seven of the planned wells are located near the Arlanskoye field, which remains as Bashneft's largest asset, despite being in development for more than 60 years.
According to the notice, all wells will have to be drilled to different depths, ranging from 1200 to 2200 metres.
Rosneft, which in 2016 bought the controlling 50% Bashneft stake from the Russian government, ordered the subsidiary to bear a large part of the company’s total production cut last year to fulfil Russia's commitments to the Opec+ alliance.
Bashneft’s oil output has lost momentum, despite subsequent quota aincreases, falling by over 34% to about 210,000 barrels per day in the first half of 2021 against the same period of 2020.
Bashneft was able to produce at the average rate of 352,000 bpd in 2019, according to data from the country’s Energy Ministry.
Before Rosneft’s takeover, the company aimed to increase output at an annual rate of 13% until 2026, using latest oilfield recovery solutions introduced when the producer was in the hands of a private owner, Moscow-based telecom giant Sistema.
Rosneft’s decision to restrict Bashneft’s production also dealt a blow to the social spending programmes in Bashkiria that are financed through the regional budget.
Last year, Bashneft had to halt tax payments and dividend payouts to regional authorities as it plunged into the red.
Authorities in Bashkiria were given a 25% stake in the oil producer and a promise of stable dividends after backing the renationalisation of Bashneft.
According to Rosneft’s notice, drilling contractors are invited to submit their proposals before 9 September, with results of the tender to be announced in November this year.
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