Rosneft Says has World's Top Company Oil Reserves

Russian state-controlled oil major Rosneft said on Thursday it has become the world leader among public companies in oil reserves with a 6.1% increase in its total hydrocarbons reserves in 2006.

Rosneft said it had estimated proven reserves of 20.089 billion barrels of oil equivalent (boe), including 15.963 billion barrels of oil and 24.758 trillion cubic feet (tcf) of gas under the Society of Petroleum Engineers (SPE) classification.

Rosneft's proven oil and gas condensate reserves rose by 7.3% in 2006, while its gas reserves increased by 1.5%. The firm said its hydrocarbon reserve life was 27-30 years for oil and 51 years for gas.

"In 2006, Rosneft became the world leader among public companies in proven liquid hydrocarbon reserves under both SPE and Security Exchange Commission (SEC) life-of-field classifications," said Rosneft, Russia's second largest oil producer with output of 1.75 million barrels per day.

Under the stricter SEC classification, which takes into account reserves extractable during the companies licence life, Rosneft's proven reserves are estimated at 13.001 boe, including 11.823 billion barrels of oil and 7.067 tcf of gas.

Rosneft's main Russian competitor, the country's top oil producer LUKOIL, has SPE oil reserves of 15.3 billion barrels, while its total reserves are bigger that those of Rosneft at 20.36 billion barrels of oil equivalent.

U.S. company Exxon Mobil's total proven reserves are even bigger at 22.7 billion barrels of oil equivalent under the SEC classification, but the firm says they are split about evenly between liquids and gas.

Rosneft said the increase in proven reserves was mainly due to further exploration at Yuganskneftegaz, Rosneft's main production unit in West Siberia, which previously belonged to bankrupt oil firm YUKOS.

Another contribution came from East Siberia's Vankor field, which Rosneft plans to turn into its main source of crude for supplies to China after Russia finishes building a pipeline in 2008.

More Reserves are Likely to Come

Rosneft said reserves replacement stood at 273 including last year's acquisition of mid-sized oil producer Udmurtneft and 224% excluding it.

Analysts typically expect oil firms to replace over 100% of their production in a sign that they are growing.

Rosneft showed the best reserves replacement figures among Russian firms last year and its growth story is likely to continue through 2007 with upcoming auctions of other YUKOS's assets and strong government support of its actions.

Rosneft is likely to outpace LUKOIL as Russia's top producer as early as next month as it is seen as the most likely buyer of YUKOS's Tomskneft and Samaraneftegas production units.

East Siberia's Tomskneft produced 220,000 bpd in 2006, but can quickly increase production to over 300,000 bpd due to its reserves of 1.5 billion boe.

Tomskneft will be sold alongside YUKOS's two large refineries and other East Siberian assets at a starting price of $6.45 billion on May 3.

A Rosneft source said this week the firm had already bid for the lot, which also includes East Siberian Oil Company (VSNK) with reserves of 400 million boe.

The 190,000 bpd Samaraneftegas unit will be auctioned on May 10 together with YUKOS's three refineries located in central Russia. Samara has reserves of around 1.55 billion boe and Rosneft has said it would also bid for the lot.