Dulisma EPSO Pipeline Access

RNS Number:0195M
Urals Energy Public Company Limited
14 November 2006


                      Urals Energy Public Company Limited

                 Transneft Approval for Access to ESPO Pipeline

Urals Energy Public Company Limited (LSE: UEN), the international oil and gas
exploration and production company which was admitted to the Alternative
Investment Market of the London Stock Exchange in August 2005 today announces
the approval by OAO AK Transneft ("Transneft") for Urals Energy's Dulisma field
to be connected to the East Siberian Pacific Ocean ("ESPO") pipeline and certain
changes in its proposed development plan for the field.


Key points:

*      Approval by Transneft for Dulisma field to be connected to the East
       Siberian Pacific Ocean pipeline gives Urals Energy permanent export 
       pipeline access for crude oil production.

*      Connection to the pipeline provides access to the high volume energy
       consumers of the Pacific Rim, specifically China.

*      Tie in reduces distance of pipeline interconnect from the Dulisma
       field by 290 kilometres giving estimated capital expenditure savings of 
       $70 million.

*      Development already underway at Dulisma with equipment and facilities
       being readied for transport this winter and procurement of pipe and other
       facilities for interconnect to begin April 2007

*      Dulisma Field expected to produce at a rate of approximately 12,000
       BOPD by end 2008, ahead of pipeline completion, rising to 30,000 BOPD by 
       2011.


William R. Thomas, Chief Executive Officer, commented:


"The approval by Transneft for access by Dulisma to the ESPO pipeline is an
important milestone in the successful development of the Dulisma field.  Urals
Energy appreciates the quick response to our application by Transneft and looks
forward to working closely with Transneft during the construction of the ESPO
pipeline and the development of the Dulisma field.  This is a key development
for Urals Energy giving the Group an estimated $70m of cost savings and a
permanent export pipeline two years earlier than originally anticipated. "



                                                                14 November 2006

Enquiries:
Pelham PR
James Henderson                                                    020 7743 6673
Gavin Davis                                                        020 7743 6677


Urals Energy is pleased to announce that it has received approval by Transneft
to accept the oil produced by Urals Energy's Dulisma field at Pump Station #8
located near the town of Kirensk and approximately 80 kilometers from the
Dulisma field, for its ESPO pipeline.  This approval by Transneft provides the
Dulisma field future permanent export pipeline access for its crude oil
production and reduces the distance of constructing a permanent pipeline from
the Dulisma field by approximately 270 kilometers.  Approval by Transneft allows
Urals Energy to optimize its development plan and forego further construction of
a temporary pipeline to Ust-Kut. The Group will now concentrate on constructing
a permanent connection with the ESPO pipeline.  Urals Energy will begin project
design shortly for its Dulisma-ESPO inter-connect, commencing procurement of
pipe and other facilities by April 2007.  Based on Urals Energy's original field
development plan, the reduced distance is estimated to result in planned
pipeline construction cost savings of approximately $70 million.

The Dulisma field is located in the Irkutsk Oblast, 350 kilometers northeast of
the town of Ust-Kut.  Earlier this year, Transneft announced an important change
in the route of the ESPO pipeline away from Lake Baikal and further to the
northeast where several important oilfields await development, including
Dulisma.  According to Transneft, construction of the ESPO began in April 2006
and first phase completion from Taishet to Skovorodino is planned by the end of
2008.

The Dulisma field will be one of the early entrants to the ESPO as development
is starting in 2007 and first oil is expected to enter the pipeline in mid-2008.
By late 2011, the Dulisma field is forecast to produce approximately 30,000
BOPD. Interim field production prior to connecting Dulisma to the ESPO will
continue to be transported to Ust-Kut via a temporary pipeline operated by an
adjoining producer.

Urals Energy acquired the Dulisma field in June 2006 for $148 million cash.
Dulisma has proven and probable oil reserves of 109 million barrels and possible
reserves of 1.7 trillion cubic feet of gas and 87 million barrels of oil and
condensate.  The Dulisma field will be developed using horizontal drilling
technology and the first development well is expected to spud in the spring of
2007.  To drill these wells, Urals Energy has purchased a new-built, 160 ton,
heavy duty mobile drilling rig and associated equipment for use by Dulisma.  As
announced earlier, development plans are already underway at Dulisma with
important equipment and facilities currently being procured and readied for
transport to the field site this winter.


NOTES FOR EDITORS

According to Transneft, in April 2006, construction of the ESPO pipeline began
from Taishet towards Ust-Kut in a west-to-east direction.  In October,
construction began at Tinda near the planned Skovorodino station that will
connect with China.  The first operational segment of the ESPO pipeline is
expected to connect the Talakan field at Pump Station #10 with Pump Station #1
at Taishet.  Transneft has announced that when the Taishet to Talakan segment is
completed, it may reverse the flow of oil, east to west, as a means of early
production.  Timing of this "early-oil" transportation plan has not been
announced, but Transneft has indicated that the route from Taishet to
Skovorodino will be completed in late 2008.

The 160-ton drilling rig purchased for Dulisma was manufactured in China in
compliance with API specifications and recently passed load-testing and
inspection by Urals Energy and its contractor to supply a custom-made top-drive
unit, Canrig Drilling Technology Limited.  In addition, Urals Energy has
contracted with various Russian manufacturers to provide a two 2.5 MW
gas-electric turbine generator, a first stage central oil-processing facility,
oil storage tanks, a 100-man work camp, power lines and transformers, in-field
pipelines and pumps, and construction equipment and transport vehicles.


                      This information is provided by RNS
            The company news service from the London Stock Exchange
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