TALAKANSKOYE OIL FIELD, Russia (Reuters) -- BP's Russian venture, TNK-BP, has started commercial oil production from the Verkhnechonsk field in Eastern Siberia, opening up a new frontier for Russian hydrocarbon production.
TNK-BP chief operation officer Tim Summers pressed a button to start oil flowing from Verkhnechonsk, some 4,000 kilometers east of Moscow, into the Asian pipeline being built by state monopoly Transneft.
The ceremony, watched by oil field workers, took place on an unusually warm day for Siberia at Talakan oilfield, owned by Surgutneftegaz oil company where oil from Verkhnechonsk joins the Asian pipeline.
"This is a world-class hydrocarbon deposit with over 1 billion barrels in recoverable reserves," Summers said.
"This is a very important development for Russia because, along with Talakan field, this opens up a new production hub in Eastern Siberia," he added.
Developing East Siberia oil deposits is key to Russia's plans to boost oil production in coming years as existing fields in West Siberia mature.
TNK-BP, which is Russia's third-largest oil firm, is a joint venture of BP and a group of four Russia-connected billionaires. It pumps one-quarter of BP's global output.
TNK-BP officials said they expected production at the Verkhnechonsk field to reach 180,000 tons (3,600 barrels per day) this year, rising next year to 1.3 million tons.
Peak production for the field is likely to be "between 7 and 10 million tons per year," said Sergei Brezitsky, TNK-BP vice president for upstream.
Crude from the field will initially flow southwest through the pipeline to Angarsk refinery owned by state-controlled oil firm Rosneft because the eastern stretch of the pipeline to the Pacific is not yet ready.
Verkhnechonsk, which is 1,100 kilometers to the north of Irkutsk and has winter temperatures which regularly drop to minus 30 Celsius, is operated by VerkhnechonskNefteGas, in which TNK-BP owns 68 percent. Rosneft, Russia's largest oil firm, holds the rest.
"It is the resources of East Siberia that will allow Rosneft to keep its leading place in the industry," Rosneft First Vice President Sergei Kudryashov said in a statement.
Summers said TNK-BP had already spent about $1 billion in developing Verkhnechonsk and will likely invest another $4 billion during the field's life.
For next year, TNK-BP has planned investments of $500 million, the firm later said in the statement.
The field was discovered in 1978 by Soviet geologists and had not been explored until now because of lack of infrastructure and development skills.
The field, formed around 500 million years ago, is more than twice as old as an average oil field.