Texaco Inc. said yesterday that it and three other oil companies had formed a company to explore for and possibly develop oil fields in a remote area in Siberia.
Situated above the Arctic Circle on the Pechora Bay, the 2,847-square-mile area is in the Timan Pechora Basin, where temperatures can reach 70 below zero. The area is estimated to have reserves of about two billion barrels, about one-fifth the reserves of the Prudhoe Bay area of Alaska.
Texaco and subsidiaries of Exxon Corp., Amoco Corp. and Norsk Hydro, a Norwegian oil company, plan to spend about $100 million in a three-year appraisal of the field, where oil has already been found by the regional Russian oil agency.
More than 130 wells have been drilled by the Russians, with a success rate of 60 percent, which is considered quite high.
Russia abounds with areas where successful wells have been drilled but never developed, usually because of a lack of capital and equipment.
The venture is exactly the kind that major oil companies are seeking. After spending huge amounts of money exploring all over the world with mixed success in the 1980s, most large companies have shifted strategy and are only going into areas where they know there is oil.
Texaco said it had been working on this project for four years fTC and had already invested about $50 million.
The joint venture, Tima Pechora Co., hopes to produce oil, mostly for export, for 46 years. Texaco and Exxon each control 30 percent of the venture, and Amoco and Norsk Hydro 20 percent each.
Peter I. Bijur, a senior vice president of Texaco who is overseeing the project, said the consortium brought together "marvelous expertise and experience in different areas," including dealing with a harsh climate in Alaska.
In Siberia, he said, a port and a pipeline will have to be built so that the oil can be put on tankers. "It's very hostile," he said. "There is absolutely no infrastructure in the area."
Other areas of Russia and former Soviet republics have attracted larger investments.
Last month, a group of companies led by USX Corp.'s Marathon Oil Co. reached an accord on an oil and natural-gas project off the coast of Sakhalin Island in Eastern Russia. Development costs on the field, estimated to hold 1 billion barrels of oil and 13 trillion cubic feet of gas, are projected at $9 billion.
In Kazakhstan, another former Soviet republic that has opened its oil industry to outside investment, money is pouring in.