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Market
World
markets have seen oil prices rise significantly from under
$15.00 U.S. per barrel in 1998 to the $40.00 U.S. per barrel
range in 2004. Reasons for the dramatic increase are many
and varied which will have a significant impact on world economies
if it persists.
Increased
prices are supported by:
1.
rising demand,
2. low inventories,
3. OPEC strategy,
4. violence in the Middle East, and,
5. insufficient U.S. refinery capacity.
Predicting
what direction prices will go in the future is anybody’s
guess. Opinions sit at both ends of the spectrum, with some
believing that $50.00 a barrel is not far off, with possibilities
of $80 per barrel depending on terrorist action, while others
believe that current prices are an overreaction to current
conditions.
Site
Exploration and Development
The
Company will use local expertise and labour where possible
due to lower cost and availability. Given the long history
of oil and gas exploration and development in Russia, local
knowledge and expertise is extensive and can be secured for
very competitive costs. However, it will ensure that technology
is most current to determine the proven and probable reserves
and maximize the output from each well. The
Company will hire a Western geologist and/or geological firm
to oversee all exploration and development in at the sites
secured.
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