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PetroNeft Resources successful testing of mini oil refinery on Licence 61

PetroNeft Resources plc (LON:PTR) an oil & gas exploration and production company operating in the Tomsk Oblast, Russian Federation, and 50% owner and operator of Licences 61 and 67, has announced the successful testing of the mini oil refinery on Licence 61 ahead of schedule.

Highlights

·    Successful testing of mini refinery processing unit on Licence 61.

·    Regulatory approval in process, expected to be in place by Q1 2021.

·    Project set to significantly reduce operating expenditure   

In January 2020 the company commenced construction of a mini oil processing facility on Licence 61 to eliminate the need to purchase the significant volumes of diesel fuel required for machinery and electricity generation at production facilities, especially during the winter months. The project will reduce 2021 operating costs by over $600,000. In addition it will further improve the company’s economics by enabling excess product to be sold on the local market at a significant premium to unrefined barrels.

Due to the oil price drop associated with the Covid outbreak, the project was paused in March to reduce costs and Covid exposure from subcontractors. Once the market outlook started to improve in June, the Company was able to continue the work using its own personnel.

Following successful testing of the refinery unit, the next stage is to receive final regulatory sanction, a process that can only start once the plant has been tested. Certification is expected to be in place during Q1 2021.

David Sturt, Chief Executive Officer of PetroNeft Resources plc, commented: 

“This is a major success for the company. The project will not only significantly reduce operating costs per barrel but also open up a new value – added revenue stream for excess product.

We are particularly pleased by the fact that, in spite of delay caused by external factors, and the ongoing disruption caused by Covid, our team was able to complete the project without relying on outside contractors, which is  a testament to their innovation,  commitment and determination”.