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. Last Updated: 07/27/2016

Moscow to Steer Western Investors Toward Remote Oil Wells

A new Russian government policy will steer foreign oil firms toward oil fields that require special technology and fields in Russia's remote regions, according to a senior Russian oil official.

Viktor Ott, chairman of the Energy Ministry's oil industry committee, told the Oil and Gas '93 Conference that foreign capital was most needed for wells requiring technological skills not available in Russia, and for fields in Russia's north and in the Far East.

"They are the main priorities, although we do not exclude others", he told The Moscow Times after his speech Thursday.

He said Western firms would also be encouraged to improve efficiency at Russia's refineries and to build local drilling and transportation machinery for the oil industry that Russia currently imported.

Ott's remarks follow strong lobbying in Russia against foreign investment in the mainstream of Russia's oil complex and accusing the government of selling Russia's mineral resources to foreign firms.

Ott said the new policy was based on an analysis of 30 joint ventures now operating in Russia's oil industry showing these were the most effective areas for Western involvement. He said 10 joint ventures had brought technology not available in Russia that was used for reworking old wells that had run dry. He said another five firms were building or servicing oil drilling equipment.

Russian oil production has fallen drastically over the last four years and experts have estimated that as wells run dry at least $5 billion, of new investment will be needed each year to maintain 1992 production levels.