Interfax cited Mr Alexander Korsik president of Bashneft as saying that the company has drilled its first exploration well at the Trebs and Titov oil fields in the Nenets Autonomous District.

Bashneft told Interfax that subsidiary LLC Bashneft Polyus, the operator of the project to develop the fields has completed drilling the first exploration well at the Trebs field. The 4,218-meter well hit Cenozoic, Mesozoic and Paleozoic deposits, confirming the presence of oil deposits in dolomite and dolomitic limestone of the lower Devonian system and upper Silurian system. Testing has now begun for liquid influx.

Bashneft and Lukoil which in April agreed to work together at the Trebs and Titov fields have still not signed the documents to form a joint venture. Lukoil was expected to buy a 25.1% stake in the Bashneft subsidiary to which the licenses and rights to the fields are to be transferred. The transfer of the licenses has not been completed yet.

The companies said that the joint venture deal will only be finalized after the fulfillment of a number of conditions, including permission and endorsement from corporate governance bodies and the relevant government agencies, as well as the conditions of various agreements concerning the operations of the venture.

Bashneft and Lukoil management have also repeatedly said that they are working on the development of these fields on the basis of partnership agreements, despite the absence of an official document to form a joint venture.

Geologists have said that the Trebs and Titov fields are very difficult to develop. One geologist who has explored the deposits said any company that develops them will face the problem of difficult reservoir rock. Furthermore, the deposits are broken up into many blocks at different levels. Therefore, different systems and methods of development will have to be selected for each block.

(Sourced from Interfax)