Project number:


Business sector:

Natural resources

Notice type:


Environmental category:


Approval date:

24 Nov 1998



PSD disclosed:

22 Oct 1998

Project Description

Development of oil reserves located in the Perm region.
The project aims to develop oil reserves in the Perm region.

Transition Impact

Permtex’s commitment to setting good standards for corporate governance and business conduct is an example for oil producers in the region. Tax payments and regulations compliance as well as the application of advanced operations and management practices have contributed substantially to improve the skills of Russian nationals in the Perm region, where not many international companies are presently operating.

The Client

Permtex LLC is an oil production company operating in the Perm region of the Russian Federation under a 20-year licence covering 307,000 acres. Shareholders are LUKoil Perm (50 per cent), a subsidiary of Russian oil company LUKoil OJSC, and SOCO International (50 per cent), an independent exploration and production company fully listed on the London Stock Exchange.

EBRD Finance

EBRD financing consists of :
  • a participating loan of US$ 15 million;
  • an "A" loan of US$ 10 million for the Bank’s own account;
  • a "B" loan of US$ 20 million to be syndicated to participant banks.

Project Cost

US$ 206 million (ECU 187 million)

Environmental Impact

The project has been classified as A/1, requiring an Environmental Impact Assessment (EIA) and an environmental audit. These were carried out by Raytheon Environmental Services consultancy of the United States.
In accordance with the Bank’s policy on Disclosure of Information, the EIA was released for public comments on 11 May 1998 in the offices of Permtex and the EBRD in Perm, Moscow and London. No concerns were received from any interested parties or regulatory authorities.
The main environmental objectives of the project are: reduction of gas flaring and air emissions; compliance with the national and World Bank environmental standards and good industry practice; improved environmental, health and safety management; and efficient utilisation of gas and water resources.
Permtex is generally in compliance with regional and local environmental regulations. It has obtained most of the environmental approvals for the development of the oil fields. The remaining permits will be obtained in due course as the project proceeds. The company will also comply with relevant World Bank standards and good international industry practices. Introduction by the Western sponsor of modern and environmentally sound oil industry technology, know-how and practices will improve the company’s environmental performance and reduce environmental damage.
An Environmental Action Plan (EAP) was developed to address any environmental issues that might be associated with the operations of the company. Most of the actions will be completed by the year 2000. The EAP includes measures to improve environmental, health and safety management and to reduce gas flaring and air emissions. This is to ensure minimum-impact development in a sensitive area and adequate mitigation of existing contamination and prevention of future contamination.
Mitigation measures in the project include the following:
Gas flaring: The EAP requires Permtex to propose and implement measures for minimising gas flaring. Permtex has installed "blue candle" smokeless flares on Logovskoye field, which significantly reduce emissions of soot, CO2 and hydrocarbons. Similar flares will be installed on the other fields. The current amounts of associated gas are small but will increase with further development of the fields. Permtex is continuously looking into various options for utilising associated gas. The investment plan includes installation of a 6MW gas turbine unit in Ozernoye oil field, which will utilise about 67 per cent of the produced gas for energy generation. In the future more capacity might be required and additional turbines might be installed on other oil fields.
Drilling practices and mud composition: Low-toxicity drilling muds will be used for all drilling activities. In Ozernoye field, which is located in a sensitive area, US directional or horizontal drilling technology will be used with mud recycling to further reduce any negative impact.
Pipelines: Cathodic protection has been installed on all pipelines of Permtex. No corrosion inhibitors are currently used but an assessment will be carried out for the future use when the water cut in oil increases. A pipeline monitoring and replacement programme will be developed and implemented by the sponsor as part of the EAP.
There is an Environmental and Social Impact Assessment available for this project.

Technical Cooperation


Company Contact


Business opportunities

For business opportunities or procurement, contact the client company.

General enquiries

EBRD project enquiries not related to procurement: 
Tel: +44 20 7338 7168; Fax: +44 20 7338 7380 

Public Information Policy (PIP)

The PIP sets out how the EBRD discloses information and consults with its stakeholders so as to promote better awareness and understanding of its strategies, policies and operations. 
Text of the PIP

Project Complaint Mechanism (PCM)

The EBRD has established the Project Complaint Mechanism (PCM) to provide an opportunity for an independent review of complaints from one or more individuals or from organisations concerning projects financed by the Bank which are alleged to have caused, or likely to cause, harm. The Rules of Procedure governing the PCM can be found at, the Russian version can be accessed at
Any complaint under the PCM must be filed no later than 12 months after the last distribution of EBRD funds. You may contact the PCM officer (at or the relevant EBRD Resident Office for assistance if you are uncertain as to the period within which a complaint must be filed.

Business opportunities

For business opportunities or procurement, contact the client company.

For state-sector projects, visit EBRD Procurement: Tel: +44 20 7338 6794

General enquiries

EBRD project enquiries not related to procurement:
Tel: +44 20 7338 7168

Public Information Policy (PIP)

The PIP sets out how the EBRD discloses information and consults with its stakeholders so as to promote better awareness and understanding of its strategies, policies and operations. Please visit the Public Information Policy page below to find out how to request a Public Sector Board Report.
Text of the PIP

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