ZAO Stimul

Victory Oil B.V. received a $100 million guarantee from MIGA for its equity investment in the joint stock company ZAO Stimul. The guarantee will protect the investment against transfer restriction, expropriation, and war and civil disturbance. Half of the guarantee is covered by facultative reinsurance. The project involves the expansion of an oil field located in the southern Ural Mountains, near the city of Orenburg. State-of-the-art drilling and processing equipment will be installed to develop oil and gas reserves. Production is expected to reach 30,000 barrels of oil a day by 2004.

The modern equipment installed will increase production and introduce new safety standards. All of the produced gas will be sold locally; some of the oil will be exported. The Russian government will receive an estimated $42.5 million in annual taxes, 60 percent of which will go to the local government. The investment is expected to create 648 highly paid temporary construction jobs in the Orenburg city area.