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Russian Rosneft to spend $1 bln on Kamchatka shelf exploration

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Russia's largest crude producer Rosneft [RTS: ROSN] will spend around $1 billion on hydrocarbon exploration of the western Kamchatka shelf in Far Eastern Russia, a company executive said on Tuesday.
PETROPAVLOVSK-KAMCHATSKY, February 19 (RIA Novosti) - Russia's largest crude producer Rosneft [RTS: ROSN] will spend around $1 billion on hydrocarbon exploration of the western Kamchatka shelf in Far Eastern Russia, a company executive said on Tuesday.

The early stage of the development project, which will cost the state-controlled company around $24 billion, was coordinated earlier today by local authorities and company representatives.

Echoing comments made by Rosneft's head last September, vice president, Sergei Kudryashov, said, "In 2008, we plan to drill two initial exploratory wells."

"We want to know everything about the project, what it will bring and how safe it is for the environment," the Kamchatka Territory governor said after discussions with Rosneft.

State-controlled Rosneft holds a 60% stake in the project, which is comparable in scale to major oil and gas projects like Sakhalin I and Sakhalin II. The Korea National Oil Corporation (KNOC) holds a 20% stake. The Kamchatka shelf is about two-thirds the size of South Korea and is estimated to hold about 900 million metric tons of fuel equivalent at 26 sites.

A Russian-South Korean commission on economic, science and technical cooperation signed a memorandum of understanding to develop the shelf in September 2004.

The other shareholders in the project are a consortium of Korea Gas Corp., GS-Caltex Corp., SK Corp, Daewoo International Corp. and Kumho Petrochemical and Hyundai Corp.

Rosneft emerged as Russia's largest crude producer after taking over most of the assets of bankrupt oil firm Yukos through liquidation auctions in 2007.

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