Lukoil, Russia's top oil producer, and the Finish power company Fortum will borrow $200 million from HypoVereinsbank and the European Bank for Reconstruction and Development to fund Arctic oil exploration by an equally owned joint venture.
The companies' SeverTEK venture has secured a six year loan that will be arranged by HVB and the EBRD, according to an EBRD statement e-mailed to news services. SeverTEK plans to invest $355 million in the field, which has proven and probable reserves of over a hundred and sixty million barrels of oil.
“The loan will be used to finance drilling and the construction of a pipeline and other infrastructure needed to bring on-stream SeverTEK's largest field at South Shapkino in the Timan Pechora basin, 70 kilometers north of the Arctic circle,” the EBRD said in its statement. “The six-year deal is the biggest the Bank has led for Russia's onshore oil sector.”
The European Union has said it wants to boost supplies of oil and gas from Russia to reduce its dependence on the Middle East, where violent clashes between Israel and the Palestinians have sparked concern that Arab states might curb shipments to the West.