Lukoil Takes $1 Billion Impairment on Conoco Oil Venture
Stephen Bierman / Bloomberg / March 1, 2012
... Lower production at the northern Yuzhnoye Khylchuyu deposit due to “unanticipated geological reasons” resulted in estimated field reserves falling to 142 million barrels at the end of 2011 from 505 million barrels in 2008.
... The cost of failed wells almost doubled to $417 million last year, Lukoil said. Dry wells, as they are known, cost $181 million in Ghana, $149 million in the Ivory Coast and $27 million in Vietnam, Lukoil said.
Falling from 505 million barrels to 142 million barrels means 363 million barrels must vanish.
At $125/barrel, 363 million barrels is $45 billion. So how did Stephen Bierman decide only $1 billion was lost?
Going the other way:
363,000,000 barrels times $2.75 = $1 billion.
Does Bierman think a barrel of oil costs $2.75?
The answer is that Bierman is only counting the bottom line that Lukoil discloses, not the value of the missing oil.
Net income of $1.35 billion compared with profit of $2.19 billion in the same period a year earlier, the Moscow-based company said in a filing today. That missed the average estimate of $2.69 billion in a Bloomberg survey of 15 analysts.
Yuzhnoye Khylchuyu at 68°10'14" N 55°21'56" E on google maps is http://g.co/maps/zjhx4
Hi-tech at edge of Arctic Circle
Russia Today / September 11, 2009
Russia’s Nenets Autonomous District inside the Arctic Circle is famous not only for its extreme temperatures and fascinating nature, but also for its booming oil industry and cutting-edge technologies.
Across the seemingly endless tundra in the Nenets Autonomous District – hundreds of kilometers from anything resembling modern civilization – you will find a fascinating combination of natural resources and cutting edge technology at the Yuzhnoye Khylchuyu oilfield.
“We are the biggest-producing oilfield in the Naryanmarneftegaz system. For example, in September we are preparing to receive nearly 21,000 tons of oil,” said Ruslan Isangulov, Director of the Yuzhnoye Khylchuyu oilfield.
lulz
