Nalco (NYSE: NLC) announced today its Russian subsidiary has formed a joint venture with a subsidiary of Russia’s largest oil company, OAO LUKOIL, to provide energy chemicals and services in Western Siberia.
The joint venture, OOO Kogalym Chemicals Plant, will be based in Kogalym (West Siberia, Russia) and will provide LUKOIL production operations in West Siberia with Nalco’s upstream chemical technologies and services, including well stimulation and cementing additives, as well as oil field production and enhanced oil recovery programs.
“We are excited about the opportunity to combine Nalco’s leading technologies in these areas with the LUKOIL’s Kogalym supply chain capability to provide world class products and services,” said Erik Fyrwald, Nalco Chairman and Chief Executive Officer. LUKOIL’s Kogalym facility will provide blending, bulk storage, rail and road loading and unloading facilities and delivery to the well head.
Technical support laboratories together with field delivery and application teams will enable the joint venture to design customized chemical programs and provide complete chemical management services. In addition to serving LUKOIL, the joint venture will sell these oilfield programs and products to other oil and gas producers in West Siberia.
Nalco’s investment in the joint venture will permit further enhancements of the production process at LUKOIL’s Kogalym facility and the production of Nalco’s innovative programs that are designed to perform in the challenging conditions of one of the world’s most severe environments. The joint venture will be majority controlled by Nalco. It is planned that production volume for the joint venture will increase seven fold by 2015, from an expected 4,000 tons to 28,000 tons per year.