TNK-BP sinks $10 billion into arctic oil

Dec. 15, 2011 at 7:18 AM

MOSCOW, Dec. 15 (UPI) -- Anglo-Russian venture TNK-BP said it would invest $10 billion in a new pipeline from arctic oil fields that would move energy supplies to the Asian market.

The company said it signed a long-term contract with oil services company Transneft to move oil through the 300-mile Zapolyarye-Purpe pipeline from the Yamal oil fields in Western Siberia.

TNK-BP Executive Director German Khan said the company is the first to sign a contract to move oil from the region. Construction of the pipeline, he added, will herald a new stage of development for Yamal.

"Mutually beneficial cooperation between the state and oil and gas companies is one of the most important conditions for putting new fields into development and efficiently developing the abundant resources of the region," he said in a statement.

Oil reserves from the arctic field are estimated by TNK-BP at roughly 5 billion barrels. TNK-BP aims to start moving oil from the field through the new pipeline for eastern markets by 2016.

Production has been low because of a lack of export options.

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