Geography and transport in the Russian license areas
The adjacent Rustamovskoye, Aysky and Suyanovskoye license blocks are situated 330 km to the northeast of the city of Ufa, the capital of Bashkiria. The license blocks encompasses an area of 540 sq km. The blocks are surrounded by producing oil and gas fields, all of them controlled by the mid-size Russian joint stock oil company Bashneft.
Transport facilities Shelton Petroleum's Russian license blocks are strategically placed for transporting oil. An existing oil pipeline of 320 mm in diameter, belonging to Bashneft, runs through the Rustamovskoye license block. Provided Shelton Petroleum can reach an agreement with Bashneft, it could access Bashneft's pipeline at the next connection point in Meteli, about 20 km from the license block, and thereby transport its oil to Transneft's trunk pipeline system, where the oil eventually can be sold to end customers. Bashneft's pipeline has considerable free capacity. As the oil field is developed and production commences, it may become financially sensible to build a pipeline that connects to the existing Bashneft pipeline.
Alternatively, the oil could be transported by truck to the railroad station at Krasno-Ufimsk, about 110 km away, where the oil could be reloaded for further transport by railway. Any natural gas produced will likely be sold on the local market, for example in the Duvansky region.