Total, Lukoil to Drill in ‘Russian Bakken’

Russia's Bazhenov shale oil field covers 2.3 million square kilometers or 570 million acres, which is the size of Texas and the Gulf of Mexico combined and represents an area 80 times larger than Bakken.

Apr 2, 2014 at 9:22AM

This article was written by -- the leading provider of energy news in the world. 

Russia's Lukoil (NASDAQOTH:LUKOY) and France's Total SA (NYSE:TOT) have reportedly signed a memorandum to develop the Bazhenov shale oil fields in western Siberia, according to Russian news agencies.  

The announcement comes after Royal Dutch Shell (NYSE:RDS-A) and Russia's Gazprom Neft (NASDAQOTH:OGZPY) launched drilling in January in Bazhenov, which is being compared to the highly prolific US Bakken shale.

Lukoil CEO Vagin Alekperov said the company plans to extract some 100,000 tons of oil—or 733,000 barrels—this year from Bazhenov.

According to the Financial Times, Lukoil's potential partnership with Total would "mark a change of strategy for the Russian group, which until now has opted to develop its Russian assets alone."

Total SA is represented in Bazhenov through a 16% stake in Russia's second-largest gas producer, Novatek.

The Bazhenov covers 2.3 million square kilometers or 570 million acres, which is the size of Texas and the Gulf of Mexico combined and represents an area 80 times larger than Bakken.

According to the U.S. Energy Information Administration, an estimated 75 billion barrels of technically recoverable shale oil resources may lie in the Bazhenov formation.

In early January this year, Shell and Gazprom Neft began drilling at Bazhenov through their joint venture, Salym Petroleum Development (SDP).

What all parties are eyeing is the prolific cracks and fractures in the shale, which could ease the flow of oil and lead to lower production costs, while test wells have so far been operating at around 400 bpd, which is comparable to test well averages at Bakken.

ExxonMobil has also been attracted to the area and plan to start a $300 million pilot project drilling with Russia's Rosneft this year.

Moscow has introduced tax breaks to incentivize exploration of the Bazhenov and other shale plays, while recent Western sanctions threats over Russia's annexation of Ukraine's Crimean Peninsula in March have done little to scare investors away from Russia.

Earlier this week, Siemens announced that its planned investments with Russian Railways and Gazprom would go head unhindered, and German oil producer Wintershall Holding GmbH is likewise still eyeing a deal with Lukoil.

OPEC is absolutely terrified of this game-changer
Imagine a company that rents a very specific and valuable piece of machinery for $41,000... per hour (that's almost as much as the average American makes in a year!). And Warren Buffett is so confident in this company's can't-live-without-it business model, he just loaded up on 8.8 million shares. An exclusive, brand-new Motley Fool report reveals the company we're calling OPEC's Worst Nightmare. Just click HERE to uncover the name of this industry-leading stock... and join Buffett in his quest for a veritable LANDSLIDE of profits!


Written by James Burgess at

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

©1995-2014 The Motley Fool. All rights reserved. | Privacy/Legal Information