Oil and gas explorer PetroNeft says it has agreed a deal with Alexandrovskoye Oil Refinery for up to $1m (€844,000) to finance infrastructure development on one of its licenses in Russia.
he Dublin-listed company is focused on the Tomsk Oblast region of the country, where it owns and operates 50pc of Licences 61 and 67.
The latest finance is to further develop the infrastructure of Licence 67 to enable year-round production from next year.
At present the well can only produce for three to four months each winter.
The financing will be repaid in tranches with produced oil at market rates, according to a statement from PetroNeft.
The facility will cover the entire anticipated cost of road construction.
AOR is located at Alexandrovskoye town in the north-western part of the Tomsk region located 230km from the Cheremshanskoye oil field.
PetroNeft said AOR purchased all the oil produced from the C4 well – part of Licenses 67 – during the recent extended well test at “competitive market rates.”
Production will recommence from the C4 well as soon as the winter road is in place, which is expected to be by the end of December.
Construction of the new all-weather road will occur through the winter months and should be completed in early 2021.
David Sturt, chief executive of PetroNeft Resources, said: “The financing arrangement will enable us to establish year-round production from Licence 67 from the beginning of 2021 and also provides a secure buyer for our produced oil at competitive market rates. It may also have further value, as we look at the potential of further development on Licence 67.”