IMILORSKOYE FIELD, Russia, Oct 8 (Reuters) – Russia’s No.2 oil producer Lukoil launched an oilfield in western Siberia ahead of schedule on Wednesday, a major step in its drive to prop up falling production and to weather U.S. sanctions over Ukraine.
The United States imposed sanctions on Lukoil and other Russian energy companies last month, preventing U.S. firms from supporting the Russian firms’ activities in exploration or production in deep water, Arctic offshore or shale projects.
The sanctions have also limited the companies’ access to Western capital markets.
“The field is launched, though there are difficulties with raising financing,” Chief Executive Officer Vagit Alekperov told reporters at the snow-covered Imilorskoye field.
The Imilorskoye group of fields, where the launch ceremony was held, is 250 km from the town of Kogalym. The group has extractable oil reserves of 194 million tonnes (1.4 billion barrels), and was originally due to be launched in March 2015.
West Siberia is at the heart of Russia’s oil industry, the world’s largest by output. However, oil production there has been on the decline as fields become depleted.
Lukoil, Russia’s largest non-state oil company and controlled by Alekperov and his deputy Leonid Fedun, managed to halt a decline in oil production last year after three straight years of decreasing production thanks to new assets in Russia.
Alekperov said time and investment were needed for Russia to replace the Western technology it cannot now import due to U.S and EU sanctions over Russia’s role in the Ukraine crisis.
“In all these years we acquired … oil production equipment from abroad, from the United States as well as from Europe, Japan and other countries. Time and sufficiently serious resources will be needed for our industry to replace them,” he said.
Deputy Prime Minister Arkady Dvorkovich, in charge of energy and commodities, said the government would support the construction of new oil pipelines and talks with banks, including Asian lenders, for financing.
“We will support the companies … by working with financial institutions that resisted the temptation of imposing sanctions, most of all with the Chinese People’s Republic,” he told reporters.
Alekperov said due to Western sanctions on equipment, supply Russian companies should speed up the development of traditional oilfields to boost oil output in the future.
Lukoil plans to produce 200 tonnes of oil per day at the field this year. In 2015, it plans to produce 300,000-400,000 tonnes, while in five years annual output is set to reach 3 million tonnes with a future maximum annual production of 5 million tonnes.
The company’s investments in the field are set to reach 100 billion roubles ($2.5 billion) in 20 years, Alekperov said. He did not specify the concrete period.
Lukoil’s oil production stood at 90.8 million tonnes in 2013. The company expects output to stabilise this year.