Bula starts oil well

BULA RESOURCES, the Irish oil explorer, starts its first development well today in Siberia's large Salymskoye oilfield in the run-up to large- scale production for the first time since it moved into Russia two years ago.

The news, to be announced on the Stock Exchange tomorrow, will provide a much needed boost to Bula's shares which currently languish at just 1.75 Irish pence.

"Now we've delivered on what we promised. We're the only oil company with a full London listing to get this far in Russia," said Tim Howell, Bula's technical manager. "It just shows how a small company can work with the Russians."

The 1,400-square kilometre Salym field contains 500 million barrels of proven and probable reserves and, if all goes to plan, production proper should start by August and build up to 240,000 barrels a day.

Bula's 50 per cent share of the field is worth an estimated pounds 425m in net present value terms, or 33p for each of its 1.3 billion shares in issue.

The market, however, has not yet taken this on board as it remains disappointed by another Bula deal in Russia that came badly unstuck last year.

"In the normal course of events the market would give them the benefit of the doubt, but after the first deal there's an element of wait and see," said one analyst.

Big investors, however, are already taking note: a pounds 3m placing last year brought in Morgan Grenfell Asset Management and Capital International. Each now holds a 7.6 per cent stake.

Bula has already spent pounds 7m on Salym in the oil region of Khanty Mansiysk in western Siberia, and a new 23km pipeline will be in place by the end of April to link the field to Russia's existing network. Oil giants Shell and Amoco are also active nearby.

Vladimir Tokarev, head of Bula's local partner - Khantymansiyskneftegasgeologica - is one of four Russians on Bula's board.

Jim Stanley, Bula's chairman, a former chief financial officer in Central Africa for South African mining giant Anglo American, first targeted Russia in 1992 after forays from Colombia to the Celtic Sea came to nothing.

The firm lost Irpounds 3.4m on turnover of just Irpounds 512,000 from its US gas interests in 1994, the latest in a series of losses stretching back to 1988. In the meantime, the shares have slipped from a 16p high after a number of new issues.

Last year, wrangling over legal title stopped Bula going ahead with the development of 535 million barrels in the Shapshinskoye and Ryamnoye fields near Salym.

Bula is not the only Western firm to have to learn the hard way in Russia, however, and it is confident the direct joint venture on Salym will prevent a repeat of last year's complications.

Sport
The giant banner displayed by Legia Warsaw supporters last night
football
News
news
Voices
The Ukip leader has consistently refused to be drawn on where he would mount an attempt to secure a parliamentary seat
voicesNigel Farage: Those who predicted we would lose momentum heading into the 2015 election are going to have to think again
News
Angelina Jolie with her father Jon Voight
people
PROMOTED VIDEO
Arts and Entertainment
Cara Delevingne made her acting debut in Anna Karenina in 2012
film Cara Delevingne 'in talks' to star in Zoolander sequel
News
Melissa and Joan Rivers together at an NBC event in May 2014
peopleDaughter Melissa thanks fans for 'outpouring of support'
Life and Style
tech
Life and Style
life
Life and Style
One in six drivers cannot identify a single one of the main components found under the bonnet of an average car
motoringOne in six drivers can't carry out basic under-bonnet checks
News
ebooksAn evocation of the conflict through the eyes of those who lived through it
News
i100
Voices
Pupils educated at schools like Eton (pictured) are far more likely to succeed in politics and the judiciary, the report found
voices
Arts and Entertainment
Simon Cowell is less than impressed with the Strictly/X Factor scheduling clash
tvSimon Cowell blasts BBC for breaking 'gentlemen's agreement' in scheduling war
News
peopleWrestling veteran drifting in and out of consciousness
Arts and Entertainment
Shady character: Jon Hamm as sports agent JB Bernstein in Million Dollar Arm
filmReview: Jon Hamm finally finds the right role on the big screen in Million Dollar Arm
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Business Analyst,HR,Halifax,£400-450pd

£400 - £450 per day + competitive: Orgtel: My client, a leading bank, is curre...

Recruitment Consultants - IT - Trainee / Experienced

£20000 - £30000 per annum + OTE £40-50K first year: SThree: The SThree group i...

Cost Reporting-MI Packs-Edinburgh-Bank-£350/day

£300 - £350 per day + competitive: Orgtel: Cost Reporting Manager - MI Packs -...

Head of Marketing (Online & Offline, Media, Digital, Strategy)

£85000 - £100000 per annum: Ashdown Group: Head of Marketing - Slough, Berkshi...

Day In a Page

Ukraine crisis: The phoney war is over as Russian troops and armour pour across the border

The phoney war is over

Russian troops and armour pour into Ukraine
Potatoes could be off the menu as crop pests threaten UK

Potatoes could be off the menu as crop pests threaten UK

The world’s entire food system is under attack - and Britain is most at risk, according to a new study
Gangnam smile: why the Chinese are flocking to South Korea to buy a new face

Gangnam smile: why the Chinese are flocking to South Korea to buy a new face

Seoul's plastic surgery industry is booming thanks to the popularity of the K-Pop look
From Mozart to Orson Welles: Creative geniuses who peaked too soon

Creative geniuses who peaked too soon

After the death of Sandy Wilson, 90, who wrote his only hit musical in his twenties, John Walsh wonders what it's like to peak too soon and go on to live a life more ordinary
Caught in the crossfire of a cyber Cold War

Caught in the crossfire of a cyber Cold War

Fears are mounting that Vladimir Putin has instructed hackers to target banks like JP Morgan
Salomé's feminine wiles have inspired writers, painters and musicians for 2,000 years

Salomé: A head for seduction

Salomé's feminine wiles have inspired writers, painters and musicians for 2,000 years. Now audiences can meet the Biblical femme fatale in two new stage and screen projects
From Bram Stoker to Stanley Kubrick, the British Library's latest exhibition celebrates all things Gothic

British Library celebrates all things Gothic

Forthcoming exhibition Terror and Wonder: The Gothic Imagination will be the UK's largest ever celebration of Gothic literature
The Hard Rock Café's owners are embroiled in a bitter legal dispute - but is the restaurant chain worth fighting for?

Is the Hard Rock Café worth fighting for?

The restaurant chain's owners are currently embroiled in a bitter legal dispute
Caribbean cuisine is becoming increasingly popular in the UK ... and there's more to it than jerk chicken at carnival

In search of Caribbean soul food

Caribbean cuisine is becoming increasingly popular in the UK ... and there's more to it than jerk chicken at carnival
11 best face powders

11 best face powders

Sweep away shiny skin with our pick of the best pressed and loose powder bases
England vs Norway: Roy Hodgson's hands tied by exploding top flight

Roy Hodgson's hands tied by exploding top flight

Lack of Englishmen at leading Premier League clubs leaves manager hamstrung
Angel Di Maria and Cristiano Ronaldo: A tale of two Manchester United No 7s

Di Maria and Ronaldo: A tale of two Manchester United No 7s

They both inherited the iconic shirt at Old Trafford, but the £59.7m new boy is joining a club in a very different state
Israel-Gaza conflict: No victory for Israel despite weeks of death and devastation

Robert Fisk: No victory for Israel despite weeks of devastation

Palestinians have won: they are still in Gaza, and Hamas is still there
Mary Beard writes character reference for Twitter troll who called her a 'slut'

Unlikely friends: Mary Beard and the troll who called her a ‘filthy old slut’

The Cambridge University classicist even wrote the student a character reference
America’s new apartheid: Prosperous white districts are choosing to break away from black cities and go it alone

America’s new apartheid

Prosperous white districts are choosing to break away from black cities and go it alone