RUSSIAN OIL PRODUCTION TO SHRINK SINCE 2010, WARN EXPERTS

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MOSCOW, April 6 (RIA Novosti) - Russian petroleum production may shrink, starting 2010, as presently used oilfields are exhausting, warns Anatoli Ledovskikh, chief of the Federal Agency for the Use of Natural Resources.

Despite that, experts are sure petroleum production will remain profitable up to 2015, though world prices may have an adverse effect on it, he said to a news conference.

"We have petroleum reserves to last another thirty years provided the present-day production rates is maintained. But then, there are ample inferred reserves, and new oilfields are being discovered," he added.

As for natural gas, its reserves will last another seventy years or so at the current production rate, which is close to an annual 50 billion cubic meters.

Mr. Ledovskikh hopes more gas-fields will be discovered-but principal deposits are nearing exhaustion, so Russia will hardly be able to increase production at its present-day pace, he acknowledged.

The agency chief is far more optimistic about minerals and ores. Geologists have come close to discovering diamond deposits in the Arkhangelsk Region and elsewhere in the Russian northwest. Russian soil preserves about a half of the world's diamonds, he pointed out. Gold mining is steadily gaining pace, and ever new workable deposits are discovered. Gold placers, however, are vanishing. Magadan in Siberia's east, and the Russian Far East remain principal gold-producing areas. Major attention is paid now to goldfields in the Arctic part of the Urals, said Mr. Ledovskikh.

Petr Sadovnik, his deputy, also addressed the conference. As he announced, a list of next year's shelf deposit development rights auctions will be ready within this year's last three months.

The acting legislation does not envisage licenses to concern mineral prospecting, development and production all in one. That concerns shelf deposits, as well, he said. An upcoming mineral resource bill envisages such licenses, however. Three Barents Sea shelf sites and a Sakhalin 3 site will be auctioned off as soon as the new law enters into force, promised Mr. Sadovnik.

Shelf deposit development will require 6.8 billion rubles within the next five years (R27.94/$1 is the Central Bank rate for today). Related government allocations will make 1.8 to two billion, and the rest is to come from mining companies, he added.

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