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Overview
PetroKamchatka's strategy for achieving growth is to source and operate onshore exploration projects in Kamchatka with the potential for large, low-cost reserves.
PetroKamchatka has secured onshore licences and identified prospects in the Tigil Block and Icha Block areas of the Kamchatka Peninsula. Industry partners have farmed-in on each of the Tigil Block and Icha Block.
PetroKamchatka also acquired the Urginskaya Block in February 2008, where three leads have been identified. More recently, in September 2009, four additional licences were added that significantly increased PetroKamchatka's net acreage in Kamchatka.
This fits with PetroKamchatka's strategy to obtain high initial interests in properties and then to mitigate financial and technical risk exposure through the farm-out arrangements.
PetroKamchatka's success is dependent on its ability to maintain, develop and otherwise have access to:
- A strong presence in the Kamchatka region;
- Strong relationships with industry partners and government agencies;
- Experienced and effective technical and operating expertise;
- A strong financial structure with access to required capital; and
- An effective management team with a good understanding of local laws and customs, environmental and fiscal legislation and the obligations to which PetroKamchatka is subject.
Competitive Strengths
Strong Management and Organization. Management of PetroKamchatka has extensive prior work experience in the petroleum producing regions of Russia, Indonesia, Central Asia and western Canada, analogous to the areas where PetroKamchatka's projects and interests are located. The organization is comprised of experienced local Russian employees plus International oil professionals capable of running exploration, development and production operations in this remote region of Russia.
Strong Regional and Country Relationships. Through joint venture partnerships and ongoing operations, PetroKamchatka has developed very strong, supportive and positive relationships with key stakeholders including local, regional and federal Russian authorities, joint venture partners, professional oil and natural gas institutions and other regional authorities and community stakeholders.
Proximity to Tidewater. PetroKamchatka's licences in Kamchatka are located within 50 kilometres of tidewater on the Kamchatka Peninsula in the far east of Russia, adjacent to the Sea of Okhotsk. This proximity to tidewater will allow PetroKamchatka access to seasonal shipping of any future oil production via oil tanker to a multitude of markets. This suggests PetroKamchatka may not be dependent upon access to third-party infrastructure. At some future point, a pipeline could be built to the east shore of Kamchatka and a deep-water all-weather offloading terminal could be constructed. This would eliminate seasonal deliverability. Such a pipeline proposal is subject to economic viability, financing and requisite government approvals and other factors,
Proximity to Markets. Any discovered oil would be accessible to the large and fast growing oil markets of Asia and western North America. The Kamchatka exploration licences are approximately 2,500 kilometres from the large refineries in Japan and South Korea, and 5,000 kilometres from the west coast of North America. The licences are located close to tidewater in areas with relatively no oil transportation infrastructure.
Extensive Land Position. PetroKamchatka has obtained through the successful acquisition of seven separate onshore exploration licences a significant land position (3,690,900 gross hectares, 3,281,755 net hectares) in West Kamchatka, thereby holding the vast majority of lands on the onshore portion of this basin.
Resource Potential. PetroKamchatka is targeting large, seismically defined structures that have potential for significant hydrocarbon accumulations. The D&M Report provides an independent assessment of the prospective resources of PetroKamchatka's prospects and leads in the Tigil, Icha and Urginskaya Blocks.