Surgutneftegas to increase capital investment in upstream 15% in 2011 - Bogdanov
SURGUT. June 24 (Interfax) - Surgutneftegas will increase capital investment in production 15% in 2011, company CEO Vladimir Bogdanov said at the AGM in Surgut on Friday.
"As for production and addition of new fields, investment last year was about 120 billion rubles and is targeted to rise 15% this year," Bogdanov said.
The increase is partly a result of rising charges and taxes. "We need to increase the volume of production drilling in order to maintain production levels in Eastern Siberia," he said.
Surgutneftegas expects production to rise 2% to 60.7 million tonnes in 2011. Gas production might decline 2.2% to 13.1 billion cubic meters.
The bulk of downstream investment - 20 billion-25 billion rubles - will go to completing construction of a high value-added refining unit at the Kirishinefteorgsintez facility. Startup is scheduled for the first quarter of 2012. It will begin the second phase of modernization of the Kirishi refinery in 2012. Investment in the project might total 183 billion rubles.
Surgutneftegas invested 20.8 billion rubles in the refinery modernization in 2010, including 3.3 billion rubles to rebuild and modernize existing capacity and 17.5 billion rubles to complete construction of the high value-added unit based on fuel oil hydrocracking.
Kirishinefteorgsintez refined 21.3 million tonnes of crude oil in 2010. It plans to refine 21.1 million tonnes of hydrocarbon crude in 2011.
Surgutneftegas invested almost 140 billion rubles overall in 2010. The company accounted for more than 31% of exploration drilling in Russia last year. More than 75% of the exploration wells yielded hydrocarbons.
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