Shell JV Aims to Reverse Salym Decline

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Salym Petroleum Development (SPD), a 50-50 joint venture of Royal Dutch Shell and Russia's Gazprom Neft, has launched the early production phase at the so-called South Hub project, which the company earlier hoped should help it sustain output in the next couple of years. "Despite the many challenges that our team and our contractors faced, we've made progress [on South Hub] over the last year," SPD CEO Michael Collins told Energy Intelligence, adding that production had started from one of the two pads at the field. "We'll be working on South Hub at least for the next year and a half ... this is part of the plan which was for early production from two of the pads and we are already up and running." The South Hub project, a result of successful exploration at the Upper Salym field, was seen by SPD as a project that would help the venture to reverse a production decline in the next few years. SPD operates three mature fields in West Siberia -- Zapadno Salymskoye (West Salym), Vadelyp and Verkhne Salymskoye (Upper Salym) -- which reached their peak of 8.46 million metric tons (170,000 b/d) in 2011 before starting to decline. SPD managed to reverse the decline using mainly technologies, but that seems to be not enough any more.

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