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. Last Updated: 07/27/2016

LUKoil Drills Into Baltic Sea

LUKoil, Russia's largest oil producer, started drilling at a $270 million offshore field in the Baltic Sea, a project that has sparked protests from environmentalists and raised concerns in neighboring Lithuania.

Drilling began at a well at the Kravtsovskoye field, also known as D-6, which contains 66.7 million barrels of oil in recoverable reserves, LUKoil said in a statement. The field lies 22 kilometers off the coast of Kaliningrad.

LUKoil is seeking to diversify its production from western Siberia and pump oil in regions from the Baltic to the Middle East, from which it is easier to ship crude to world markets. The company pumps every fifth barrel of crude in Russia, which last month overtook Saudi Arabia as the world's top oil producer.

"The success of this project will strengthen Russia's position in the Baltic," LUKoil CEO Vagit Alekperov said. The company will use "state-of-the-art technologies" at the field.

Moscow-based environmental group Ecodefense in 2002 went to court in Kaliningrad to push LUKoil to provide data on the project's expected effects on the Baltic Sea. Lithuanian Prime Minister Algirdas Brazauskas has called on Russia to work with his government to ensure the Baltic Sea's environment is protected.

The company plans to start production at the field this summer and to bring output to 600,000 tons per year (12,000 barrels per day) by 2007, the company said.