PetroNeft, an oil and gas exploration company operating in Russia’s Tomsk region, has announced the successful test of a mini-oil refinery ahead of the projected timeline. The company owns and operates 50 percent of licenses 61 and 67 in the region. The successful test of a mini-refinery processing unit took place on license area 61, with regulatory approval expected by the first quarter of 2021. The project significantly reduces operating costs.

In January 2020, the company started the construction of a mini-oil processing plant on license area 61 to obviate having to purchase significant quantities of diesel fuel needed for machinery and power generation in production facilities, especially in the winter months. The project will reduce operational costs by more than USD600,000 by 2021. It will also further improve the profitability of the company by allowing the sale of surplus products on the local market at a significant premium to unrefined barrels.

The project was suspended in March to reduce the spread of COVID-19, as well as to save costs due to the drop in oil prices. After the market outlook improved in June, the company was able to continue the work.

After the successful testing of the refinery unit, the next stage will entail receiving final regulatory approval, a process that can only begin after the plant has been tested. The certification is expected to take place in the first quarter of 2021.

David Sturt, chairman of PetroNeft Resources commented, “This is a great success for the company. Not only will the project significantly reduce operating costs per barrel, but it will also open up new added value, additional sources of income from surplus products. We are glad that our team could complete the project without outside contractors, despite delays due to external factors and the ongoing disruption caused by COVID-19, a testament to their innovation, commitment, and determination.”