Russia's Surgut to raise investment in exploration

MOSCOW, March 14 (Reuters) - Russian oil firm SurgutNefteGas SNGS.MM plans to boost investment into oil exploration by a third to about 12 billion roubles ($503.4 million) this year, an agency quoted a firm's executive as saying on Friday.

Surgut, Russia’s fourth-largest oil producer, is going to use the funds to carry out exploration at its Siberian and northern deposits, Interfax quoted Ivan Kos, Surgut’s deputy chief geologist, as saying in East Siberian town of Irkutsk.

Interfax said that Surgut spent over 9 billion roubles on exploration in 2007, which allowed the firm to boost reserves by 78 million tonnes, mainly in northern Yakutia and West Siberian Khanty-Mansiisk regions.

Surgut has been increasing its production faster than any other Russian oil firm in the past decade, but growth has slowed in the past three years. Last year, its output fell by 1.6 percent to around 1.3 million barrels per day.

Analysts have blamed mushrooming capital expenditure to maintain output in the West Siberia for the decline.

Surgut is also exploring a number of big fields in East Siberia, which is set to become Russia’s next large oil province when a new pipeline to China is built by the end of this decade.

The company said last year it had a potential to raise its output to 2 million barrels per day due to its massive reserves. (Reporting by Tanya Mosolova; editing by James Jukwey)