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. Last Updated: 07/27/2016

Croatian Oil Firm Buys Out White Nights' Siberian Fields

ZAGREB, Croatia -- Croatian state oil and gas firm INA has bought Russian-American joint venture White Nights, which owns two oil fields in Western Siberia, for $20 million, INA chief executive Davor Stern said Thursday.

The two fields contain 10 million tons of crude oil that would boost INA Industrija Nafte's known reserves by 75 percent, Stern said.

Their technical reserves are estimated at 60 million tons, but their extraction would not be profitable at the current price of oil on the world market.

White Nights is a joint venture of Phibro Energy Production Inc., part of U.S. investment bank Salomon Smith Barney, and Russian oil firm Varyeganneftegaz, subsidiary of Sidanko oil group.

Stern said that INA is expected to pay half the sum in cash within the next two years and the other half in services at Varyeganneftegaz's other fields in the area.

INA has been present in Western Siberia as a servicing company for four years, but this sale marks the first time that Croatia's biggest company has bought an existing field instead of obtaining a concession for oil exploration.

"Our advantage is in the know-how for the exploitation of weak fields," Stern said at a news conference in Zagreb.

He added that INA had developed well-fracturing technology enabling it to boost production in fields with low underground pressure.

INA is planning to more than double the annual production of oil from White Nights to around 1 million tons from the current 420,000 tons, and to transport it through the Druzba oil pipeline to its refinery in Sisak, south of Zagreb.

Last month, INA formed a joint venture for oil exploration, processing and marketing with Russia's oil giant LUKoil.