German Wintershall to Expand Presence in Turkmenistan

Ashgabat, 4 July 2007 (nCa) --- Wintershall of Germany is ready to expand its activities in Turkmenistan, said a company executive during a meeting Tuesday with President Berdymuhamedov.

The Turkmen media reports that Bernhardt Schmidt, a top executive of Wintershall, presented some new proposals to the president of Turkmenistan. The details of the proposals were not known immediately but it is believed that, among other things, Wintershall would expand its exploration work in the Caspian sector of Turkmenistan.

The sides agreed that it was necessary to revamp the Turkmen-German economic forum as effective tool of bilateral cooperation.

Wintershall offered to increase the number of Turkmen specialists being trained in Germany.

Berdymuhamedov praised the efforts of German embassy in facilitating the training and education of Turkmen students in Germany.

Kuldip Sandu, Wintershall country director for Turkmenistan, and Hans Mondorf, German ambassador to Turkmenistan, were also present during the meeting.

Wintershall is a wholly owned subsidiary of BASF.

Wintershall has 20% share in two blocks in the Caspian sector of Turkmenistan.

The company website (www.wintershall.com) says that Wintershall’s Exploration and Production sector spent a total of 524 million euros on exploration, investments, and acquisitions in the search and development of new oil and gas deposits in 2006 (2005: 492 million euros). Of this amount, 221 million euros were spent in Europe (2005: 239 million euros), 138 million euros in North Africa, including the Middle East (2005: 89 million euros), 62 million euros in South America (2005: 94 million euros), and 102 million euros in core region of Russia and the Caspian Sea region (2005: 70 million euros).

Here is the write up taken from the Wintershall website about its activities in the Caspian region and Russia:

In 2005, Wintershall further expanded its long-standing partnership with Russia’s OAO Gazprom. In the first upstream project together with Gazprom, development of the Achimov Formation in a section of the Western Siberian Urengoi Field, the road and facility work for the drilling and production rigs was virtually completed in 2005. At the start of 2006, two drilling rigs will be put into operation in the first phase of the project which will eventually encompass six production wells.   When the reservoir behavior has been explored, work will start on developing the entire field in 2007. Gazprom subsidiary OOO Urengoygazprom and Wintershall have equal shares in the Achimgaz joint venture. The BASF subsidiary Wintershall is the first German producer to be directly involved in gas production in Russia.

Achimgaz is expected to produce around 200 billion cubic meters of natural gas and 40 million metric tons of condensate. The total required investment will be around one billion US dollars, which is one of the largest investments ever made by a German company in the Russian Federation. Negotiations are underway for joint development of the Yushno Russkoje gas field, also in Western Siberia.

At natural gas field Yuzhno Russkoye which also is situated in Western Siberia, Wintershall will receive an interest of 25% less one share in the company Severneftegazprom (SNGP), which holds the license in the Yuzhno Russkoye gas field. In addition, Wintershall will receive a further 10% in the company SNGP in the form of preferred shares, carrying no voting rights. This will give the Wintershall an interest of 35% less one share in the economic rewards of the Yuzhno Russkoye field.

When the first Achimgaz wells were started in April 2006 the thermometer still showed minus 25 degrees in West Siberian Novy Urengoy.

The Yuzhno Russkoye field has recoverable reserves of more than 600 billion cubic meters of natural gas, approximately three times the size of Achimgaz. On the Juschno-Russkoye field seismic and drilling operations have already begun. Production from this field in Western Siberia is scheduled to start in 2008. By acquiring an interest in Yuzhno Russkoye, Wintershall is making a significant and sustainable addition to its natural gas production base.

Offshore Dagestan, in the Caspian Sea, geological and geophysical work is continuing in the Tyuleni exploration block.

In the Volga region, Volgodeminoil, a joint venture in which Wintershall and its partner Lukoil each have a 50 percent share, is continuing its oil exploration and production activities. Volgodeminoil is now the longest-standing joint venture for hydrocarbon production between a Russian and a Western European partner.

In Turkmenistan, Wintershall has a 20 percent share in two offshore exploration blocks.