Gazprom Neft - News

Board of Directors review status of projects

Fri, 18 May 2012 19:23:28 +0400

Gazprom Neft Board of Directors have reviewed the latest strategic development indicators to 2020.

Under the Gazprom Neft strategic development guidelines, by 2020 the Company’s production is expected to reach 100 million tonnes of hydrocarbons and 70 million tonnes of oil refined annually. Sales of petroleum products through high-margin channels (own petrol stations, small-scale wholesale, bunker fuel, jet fuel and engine oils) are expected to reach 40 million tonnes annually.

Gazprom Neft’s key business development objectives remain in place, but some parameters have been amended by the Board to reflect the speed with which the goals set forth are being achieved. In particular, the 2020 forecast average throughput per petrol station has been raised by 45% from 3,800 tonnes to 5,500 tonnes per year, and the forecast number of regions with petrol stations presence has been increased from 29 to 36. Forecast sales to end-users of jet fuel (deliveries “into the wing”) by Gazpromneft-Aero have been increased 10% to 3.3 million tonnes annually, with a planned airport presence of 122 (up from 100). Target bitumen sales have been raised by 200,000 tonnes to 2.3 million annually, with market share in polymerised bituminous materials now expected to reach 30%, six times higher than previously forecast. Petrochemical sales volumes are expected to increase to 3.13 million tonnes per year, 53% more than previously expected. The use of advanced technology for exploiting difficult reserves at existing oil fields, is one of the mechanisms the Company will employ to achieve these objectives in E&P.

The Board of Directors also reviewed Gazprom Neft’s programme for improved utilisation and increased efficiency in the use of the associated petroleum gas (APG) in the period 2012-2015. The completion of two projects (one at South Priobskoye and the first phase of the Noyabrskoye integrated project) will allow for the utilisation of APG to over 80% by late 2012 / early 2013.

A compressor station and APG collection facilities will be constructed in order to raise the level of utilisation at the South Priobskoye field to 95%. At present, 70 out of 87 kilometres have been laid as part of the gas collection system project, the compressor station is 50% complete and the pipeline for APG delivery to the South Balyk Gas Condensate Processing Plant is almost complete.

Gas utilisation as part of the first phase of the Noyabrskoye integrated project is linked to two processes: the modernisation of the collection and transportation gas system from the Ety-Purovskoye field and increasing processing capacity at the Vyngapurovsk Gas Condensate Processing Plant which is being carried out by SIBUR. The commissioning work on the reconstruction of the external gas transport system from the Vyngayakhinskoye and Ety-Purovskoye fields will be completed in June-/July this year and the subsequent installation of compressor and vacuum-compressor stations will result in the project completing by the end of 2012 / early 2013.

The Board of Directors also reviewed the status of the programme to improve the quality of Gazprom Neft’s petroleum products. RUB 37 billion has been invested from 2007 to 2011 to increase the quality of products at the Company’s three refineries (Omsk, Moscow and the 50% stake in the Yaroslavl refinery which is owned by Gazprom Neft through Slavneft). As a result, production of grade 4 and grade 5 high-octane gasoline and grade 4 diesel fuel has commenced. From 2015, all engine fuel produced by the Company will be grade 5 (equivalent to Euro-5).

These materials include forward-looking statements relating to, among other things, revenues, earnings, cash flows, capital expenditure and other financial items. These statements also relate to Gazprom Neft's business strategy, goals and expectations concerning Gazprom Neft's future operations, margins, profitability, liquidity and capital resources. Words such as “may,” “will,” “believe,” “anticipate,” “intend,” “estimate,” “expect” and similar terms and phrases can help identify forward-looking statements. Although Gazprom Neft believes the assumptions upon which these forward-looking statements are based are reasonable, any of these assumptions could prove to be inaccurate and the forward-looking statements based on these assumptions could be incorrect, and Gazprom Neft may not achieve or accomplish these expectations, beliefs or projections. Such assumptions include, without limitation, management’s examination of historical operating trends, projected sales prices, production volumes and rates, data contained in Gazprom Neft's records and other data available from third parties. In addition, important factors that, in Gazprom Neft's view could cause actual results to differ materially from those discussed in the forward-looking statements include significant increases in taxes, increased regulation, heightened competition, increased costs, reduced reserves levels, changes in consumer preferences or behavior, loss of production capacity and domestic or international economic or political conditions. Gazprom Neft expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained in these materials, to reflect any change in its expectations or any change in events, conditions or circumstances that occur, or that it becomes aware of, after the date hereof.

Salym Petroleum launched LPG plant to ensure utilization of associated petroleum gas

Fri, 18 May 2012 02:00:00 +0400

On May 18, 2012 Salym Petroleum Development N.V. (SPD), OOO �Monolit� and OAO NK RussNeft launched the liquefied petroleum gas (LPG) plant located in Salym group of oil fields in Western Siberia. When fully operational this facility, constructed and operated by OOO �Monolit�, should now enable SPD and RussNeft to ensure utilization of their associated petroleum gas (APG). The official opening ceremony with the participation of the Governor of Khanty-Mansi Autonomous Okrug Natalya Komarova, Ambassador of the Netherlands Ron Keller, Ambassador of the United Kingdom Tim Barrow and other top-level guests, has taken place today in Khanty-Mansiysk.

To realize this project SPD, Monolit and RussNeft signed a tripartite memorandum of understanding on APG utilization in 2008. Under this agreement the parties agreed to create necessary infrastructure to ensure integrated processing of associated petroleum gas produced at Salym group of oil fields developed by SPD and Shapsha group of oil fields developed by RussNeft.

The total investment into this APG utilization project exceeds 10 bln rubles. Moreover, international financial companies such as EBRD, DEG and UniCreditBank took part in financing LPG plant construction.

Since the very start of the Salym project SPD paid a key attention to gas utilization issue and developed an extensive gas utilization program. This project covers two projects:

construction and start-up of a gas turbine power plant (PGP) which since 2008 has used around 1/3 of the APG to generate electric power;
construction of liquefied petroleum gas (LPG) plant within the fields to bring utilization gas up to 95%.

REFERENCE:

Salym Petroleum Development N.V. is a 50/50 Joint Venture of Shell Salym Development B.V. (part of Shell group) and Gazprom Neft. Since 2003, SPD has been developing the Salym group of oilfields (West Salym, Upper Salym and Vadelyp), which are located in the Khanty-Mansi Autonomous Okrug in Western Siberia. Total recoverable resources are 140 mln. tones. The Salym Project is one of the largest on-shore investment projects with foreign capital in the Russian energy sector. In 2011, SPD produced over 8.4 mln.tons of oil.

Gazprom Neft selects contractor to test wells at Badra

Thu, 17 May 2012 14:58:32 +0400

Gazprom Neft has announced the results of the tender to select a contractor to test and complete eleven wells at the oil field in Badra, Iraq. The contract, worth around US$95 million, was awarded to U.S. oil field service group Halliburton .

Testing of the first well is scheduled to begin in the third quarter of 2012. Drilling at Badra began in November 2011. A three-year contract for drilling eleven wells, including one exploratory and two appraisal wells, was signed in summer 2011 with Schlumberger. The work is being carried out using three drilling rigs.

The work carried out by Halliburton will facilitate better understanding of the geological structure of the field. Production will commence once the Final Field Development Plan is completed in 2013, in line with the terms agreed with the Iraqi government. Current plans provide for beginning the preparation, testing and completion of six wells prior to the start of the field development. All of these wells will be equipped with top-notch equipment which will enable dual production from multiple reservoirs (simultaneous production from two or more reservoirs in one well) and ensure real-time control over well performance.

REFERENCE:

The Badra oil field is located in the Wasit Province in eastern Iraq. According to preliminary estimates, the geological reserves of the Badra field total 3 billion barrels of oil. A contract to develop the field was signed with the government of Iraq in January 2010 following the December 2009 tender, which was won by a consortium made up of Gazprom Neft, Kogas (Korea), Petronas (Malaysia) and TPAO (Turkey).

Gazprom Neft's share in the project is 30%, that of Kogas is 22.5%, Petronas' is 15% and TPAO's is 7.5%. The share of the Iraqi government, represented by the Iraqi Oil Exploration Company (OEC), is 25%. Gazprom Neft is the operator of the project.

The development project for the Badra field is proposed to last 20 years, with the possibility to extend it by 5 years. The estimated volume of investment over that time is around US$2 billion. According to the terms of the contract, investors will be reimbursed all costs incurred and paid an additional fee of US$5.50 per barrel of oil equivalent produced.

Production is expected to begin on the oil field in 2013, and is expected to reach 170 thousand barrels per day (approx. 8.5 million tons per year) by 2017 and to maintain that level for seven years. In total, 17 production wells and 5 injection wells are planned to be drilled on the field.

G-Drive brand fuel to partner Signatech Nissan team at the FIA World Endurance Championship and Le Mans 24 Hours

Thu, 03 May 2012 00:00:00 +0400

Gazprom Neft's premium fuel brand G-Drive will sponsor the Signatech Nissan racing team at the FIA World Endurance Championship . One of the stages of the championship is the legendary Le Mans 24 hour race. This year the team will be racing under the name �G-Drive Racing by Signatech Nissan�.

The G-Drive Racing by Signatech Nissan team will be represented by the champion of the Le Mans International Series, Roman Rusinov, along with French drivers Pierre Ragues and Nelson Panciatici.

The first stage of the championship will be held in Belgium on 5 May, and the season continues until November 2012. G-Drive Racing by Signatech Nissan will participate in seven stages, including the famous Le Mans 24 hour marathon.

�G-Drive Racing is Gazprom Neft's first international project aimed at supporting motorsports and the Russian sportsmen taking part in this world-famous racing series. Motorsport is an effective platform to promote the G-Drive brand of premium fuel, whose use has a direct effect on a vehicle's engine power and acceleration dynamics. Our partnership with the strongest racing teams on the global level provides an opportunity to demonstrate the excellence of the fuel and show off its high-performance characteristics,� said Gazprom Neft's Director of Regional Sales Alexander Krylov.

François Goupil de Bouillet, CEO of Nissan Motor Rus, said, �We are pleased to welcome Roman and G-Drive to the Signatech Nissan team. It is fantastic news for me as CEO of Nissan Russia. I am sure that together we will achieve excellent results in the World Endurance Championship and the Le Mans 24 hour race. The Russian racing driver and G-Drive fuel are great prospects for our project.�

REFERENCE:

Gazprom Neft owns �an extensive network of filling stations, comprising around 1,260 stations in Russia and the CIS. The Gazprom Neft network's wide area of presence and the advantageous locations of the Omsk, Moscow and Yaroslavl oil refineries provide the company with leading positions in the wholesale and retail markets of Western Siberia and Central Russia.

G-Drive �is a fuel of the next generation, sold at the Gazprom Neft filling station network. G-Drive contains an active complex of additives designed to improve engine efficiency, increase the power and acceleration dynamics of the vehicle. Among the main benefits of Gazprom Neft's premium-class fuel are a 12% increase in engine power, improvement to the vehicle's acceleration dynamics up to 1.8 seconds, and professional protection of the engine's fuel system.

Team Signatech Nissan is part of Signature Group and was founded in 1990 by Philippe Sinault. Since 2011 the team has been named Nissan, and as of May 2012 vehicle 26 performs under the banner of G-Drive Racing by Signatech Nissan. The team has 20 years of experience in international motorsport, with a great track record including 76 wins, 47 pole positions, 472 podiums, 47 record laps and 15 championship titles. The team won the championship title at the Le Mans International Series and came second in the Le Mans 24 hour race in 2011 in the LMP2 category.

The FIA World Endurance Championship is one of the five largest global series held under the auspices of the International Automobile Federation (FIA), alongside Formula 1. The championship consists of eight stages spread across three continents, at such locations as: Sebring (USA), Spa (Belgium), Le Mans (France), Silverstone (UK), Sao Paulo (Brazil), the Kingdom of Bahrain, Fuji (Bahrain) and Shanghai (China). The marathon 24 hour race at Le Mans, included in this year's WEC calendar, is one of the world's three most prestigious races, along with the Indy 500 and the Monaco Grand Prix. Each year, the race attracts over 310 thousand spectators.

Roman Rusinov is a multi-time winner of international races in the Gran Tourismo, prototype and Formula Junior classes. In 2000, Roman became the first Russian driver to win a race in an international series, won the Renault International Finals, and received the silver medal at the Formula Renault Championship. In 2002 he received the bronze medal in the Formula Palmer Audi Championship, and won the 1000km Le Mans marathon race in the prototype LMP2 category in 2003. He became the first Russian in the history of motorsport to win an international championship in 2004 when, performing for Ferrari, he won the Le Mans International Series. In 2005-06 Rusinov was a test driver for the Jordan and MF1 Racing teams in the Formula 1 Championship. As the founder of the Russian racing team Spartak Racing, he performed for the team in 2008-09 in the Le Mans 24 hour race, the Le Mans Championship, the FIA GT1 Championship and the ADAC GT3. Driving Lamborghinis, he placed in the top three seven times and won three races.

Gazpromneft Aero begins refuelling Russian commercial aircraft in Italy and the Seychelles

Thu, 26 Apr 2012 00:00:00 +0400

Gazpromneft Aero , in accordance with the terms of their long-term agreement with Italian oil & gas company ENI , has begun regularly refuelling Transaero aircraft in the Seychelles, Nordavia planes at Rimini airport, and Aviakon Zitotrans charter flights in Verona.

Given the traditional increase in demand for flights to Italy in summer, Gazpromneft Aero is prepared to expand its cooperation with airlines in refuelling aircraft at the country�s airports.

�Cooperation with ENI enables Gazpromneft Aero to expand its presence and to provide its partner airlines with comfortable working conditions in a wider variety of airports. This will allow us to further strengthen our position on the global jet fuel market�, commented Vladimir Yegorov, CEO of Gazpromneft Aero.

To date, Gazpromneft Aero operates at 80 airports around the world.

REFERENCE

Gazpromneft Aero is a subsidiary of Gazprom Neft. The company has carried out refuelling of aircraft since January 1, 2008. Since December 2008, Gazprom Neft Aero has been a strategic partner of the International Air Transport Association (IATA) in the area of jet fuel.

Gazprom Neft Aero is currently the leader of the Russian jet fuel market. The company has its own network of refuelling complexes and ranks first among Russian retail network operators in sales volume of jet fuel.

Gazprom Neft Fulfills Investment Obligations under Sales Contract for 51% of NIS Shares

Wed, 25 Apr 2012 00:00:00 +0400

In April, Gazprom Neft completed the last investment tranche required by a sales contract for 51% of the shares of NIS (Naftna Industrija Srbije ). The company thus fulfilled the terms of the agreement with the Government of the Republic of Serbia two months earlier than the date specified in the contract. Since 2009, Gazprom Neft�s total investment in a program to modernize and reconstruct the NIS refinery and improve the environmental safety of the Serbian company�s production processes has reached the level of 500 million euros, fixed in the sale contract.

Modernization of production processes is a fundamental to NIS achieving the strategically-important top position in the Balkan market for oil products. An essential element of the program is the modernization and construction of a facility for light hydrocracking and hydrotreatment at the Panchevo oil refinery.

The new facility will improve the quality of the output. In particular, the refining depth will increase up to 84%, and the yield of light products with improved quality � up to 76%. Furthermore, the environmental safety will be improved. The volume of polluting emissions discharged into the atmosphere, including particulates, will be cut to the level required by the standards of the European Union.

As a result of the modernization project, the processing capacity of the refinery will reach a maximum of 4.8 million tons per year, making it possible to fully satisfy the needs of Serbia�s internal market and export oil products to the Baltic states.

Bringing the hydrocracking and hydrorefining facility into operation will provide NIS with a complete transition to the production of gasoline and Euro-diesel with sulfur content of up to 10 ppm, which complies with EU environmental standards. Once the facility is in operation, the rated gasoline production capacity at the Panchevo refinery will be roughly 640,000 tons per year. Moreover, Euro-diesel output will increase by 6.5 times, up to 1.5 million tons per year.

In addition to the hydrocracking and hydrotreatment facility (MHC/DHT), the modernization program for the NIS refinery complex includes the construction of a hydrogen unit, sulfuric-acid recovery unit, and a tank farm for liquid gas in an industrial zone in Panchevo, as well as the renovation and construction of the plant�s infrastructure, reconstruction of the fluid catalytic cracking (FCC) system, and a freight dock.

Construction of the hydrocracking and hydroretreatment facility at the Panchevo refinery will be completed in the third quarter. The facility is slated to be brought into operation in November 2012.

Vadim Yakovlev, chairman of the NIS Board of Directors and first deputy CEO of Gazprom Neft, said: �Gazprom Neft has fulfilled its investment obligations ahead of the schedule specified in the sales contract. This again confirms that the Government of the Republic of Serbia acquired a reliable partner in 2009 to develop the country�s oil industry. Today the modernization of the NIS refinery entered its final stage: construction is being completed on the last sites and testing of the system�s infrastructure and equipment has begun. But wrapping up the investment cycle does not signal the end of modernization of the Panchevo oil refinery: NIS is drawing up a strategy for the future development of the plant and its production capacity.�

REFERENCE:

NIS is one of the largest vertically-integrated oil-and-gas companies of southeast Europe. It is engaged in the exploration, production, and refining of oil and gas, as well as the sale of oil products. The primary shareholders are Gazprom Neft (56.5%) and the Government of the Republic of Serbia. The company owns two oil refineries with a combined processing capacity of 7.3 million tons of oil annually in Panchevo and Novi Sad. The company also owns 480 gas stations and oil depots. NIS operates in several European countries, conducting exploratory and drilling operations in Serbia, Hungary, Romania, Bosnia and Herzegovina, and Angola.