06/10/2014 Shell suspends Bazhenov development Latest company to fall foul of Russian sanctions SHELL has suspended its part in joint exploration work with Gazprom Neft at the Bazhenov shale deposit in Siberia as a result of trade sanctions imposed on Russia. Shell is the latest Western oil major to pull out of drilling operations in Russia. The US and EU imposed harsh economic sanctions on the country for its alleged support of armed separatist groups battling government forces in Ukraine. Most of the sanctions were focussed on banks or defence companies, but US firms were also banned from “services or technology in support of exploration or production for deepwater, Arctic offshore or shale projects.” “There are implications for some of Shell's current and envisaged activities in Russia, including Bazhenov, and we are working closely with the relevant authorities and our partners to determine what the exact impact of those will be,” a Shell spokesperson confirmed to tce. Gazprom Neft is continuing with exploration work alone and says that it has drilled the first horizontal exploration well into the Bazhenov deposit at the Palyanovsky field. The well is 3,200 m deep while the horizontal borehole is 300 m long. It plans to drill four wells in total of increasing depth and length. The company will use fracking to determine gas flow from the wells, but previous test drills at the Palyanovsky field have achieved commercial flows. Ruspetro is independent of government owned oil companies, so no real cross over. Big oil is very interested in the bazhenov. RPO have some of biggest and best acreage. Lots of things need to be resolved, but obviously the potential is massive.
It is a two part problem with RPO. Firstly, they have yet to publish a definitive case for an acceptable rate of return from the bazhenov formation. If they can say demonstrate a drilling protocol for a reproducible and economic rate of return, they can, with accuracy, state the funding required to make a profitable business. Secondly, they then need to deliver this level funding without a placement. With such huge reserves, if these two things are achieved, this is a five bagger. Great uncertainty regarding these two issues still exists.
its the Restructuring that I feel is holding this back,until this is sorted share price will struggle,they do say that if they can not do this by mid December then additional funding will be needed,which I assume could be through a share placement,my gut feeling is this will be sorted,seem to be taking a long while to get this finance and restructuring sorted, lets hope this share price can now start to rise leading up to news in November regarding this restructuring,im sure markets are well up on events and will no b4 us if everythings going well,watch the share price over coming weeks
all good news in the rns with the chance also that restructuring will be sorted in nov / dec, when then is completed i really see the sp returning to the 30's and with increased production building from then gla
A reasonably positive statement. The most encouraging part is the implication that they might be getting closer to solving the problem of heterogeneity: 'Evidence from tracer testing that seven out of eight fractures have contributed to production. This latter assessment is the result of a second innovation employed in this well - a different chemical tracer was injected into each fracture stage, so production from each stage could be individually identified. The ability to tune fracture size and location to the specific reservoir distribution encountered in the horizontal wells is key to mitigating the geological heterogeneity in the Company's reservoirs' They need to produce a new assessment of the potential economic viability of the fields post drilling with the new fracture technology. If they can combine a proven rate of return with new funding, then with better news on sanctions and higher oil price we can start getting better movement in SP. Long way to go but a we have a gatting chance now.
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