David K. Lifschultz CEO of Genoil announced today that the corporation has signed an additional contract to represent the Velikoye oil field on behalf of JSC PetroleumGas "AFB" to investors. Genoil has already begun discussions with several financing sources in Russia as well as a few different interested oilfield services providers all of whom expect major financial sponsorship from China on this project. Genoil is to earn a fee for bringing investment to AFB and anticipate closing the initial investment round in the next sixty days.
AFB is an oil company holding both exploration licenses and production licenses for a total of 700 square kilometers. These licenses are estimated to contain 150 billion tons of oil and oil equivalent and Genoil Inc. will spearhead the development of the project. Genoil through its network of relationships is empowering private companies like AFB to finance the development of their oil fields against future deliveries of oil and to develop a structure to make this possible for them. AFB is in an excellent position to take advantage of this financing plan. Rosneft has been known to finance many oil fields in this manner, for example, their acquisition of TNK-BP was done like this.
The magnitude of the discovery of a large oil field in the Astrakhan Region came to light several years ago. Interfax at that time quoted the lead geologist at AFB that the company estimated the field's reserves at 150 million tons of oil equivalent and 40 billion cubic meters of natural gas confirming that this is the largest oil field discovered in Russia in the last 20 years. At the same time, it was noted that the Velikoye field has very good light and sweet crude oil. The estimated capital requirements to develop Velikoye is approximately $5 billion USD beginning with further seismic work, assessment of wells and initial production.
President & C.O.O. Bruce Abbott stated,
"The Velikoye Oil Field is one of the most important oil fields in Russia which is attracting attention from serious investors and companies based all over the world." "Russia is one the leading global oil producers with over 12% of the world's oil reserves and about 10 million barrels per day of production."
AFB has two licenses for the right to geological exploration and production of raw hydrocarbons within the Tambov license block. The first license is for the Meso-Cenozoic sedimentary complex and is effective until 2030, and the second license is for the Paleozoic sedimentary complex and effective until 2036. There are no limitations on the validity of any license renewals.