Scottish Oil Firm Seeks to Exit Siberian Field

Dana Petroleum, the Scottish explorer with assets in the North Sea, Africa and Russia, wrote down reserves in Siberia after losing a court battle against local partner LUKoil, the country's second-biggest oil producer.

Dana will seek 30 percent output growth from Britain, Norway and Egypt as it considers selling assets in Russia, where it "experienced challenges to its rights to continue to operate and manage the South Vat-Yoganskoye field in Siberia," the Aberdeen-based company said Thursday in a statement distributed by the Regulatory News Service.

Dana said it was in talks to sell its stake in Yoganoil, the developer of the Vat-Yoganskoye deposit, to LUKoil after the Russian major won a court ruling terminating Yuganoil's commercial contract to manage and operate the field.

Dana ceased to recognize production from the field after the September ruling, and Yoganoil agreed to operate the field for LUKoil on a service basis. An impairment charge in the company's 2007 accounts will reflect the change of operating mode at Vat-Yoganskoye, Dana said, without specifying either reserves or impairment charge figures.

"After 10 years ... in co-operation with LUKoil, the ... proposition of Russian domestic oil-price return no longer competes with the opportunities afforded elsewhere," the statement said.

Total production will average 40,000 to 45,000 barrels of oil equivalent per day in 2008, compared with an average 30,500 barrels a day in 2007, Dana said.