Several years ago, Gazprom Neft embarked on the development of oil rims at the fields of its parent company, Gazprom. Today, these assets are an essential part of the company’s development strategy and one of its growth drivers until 2030. In an interview with Energy Intelligence, Vladimir Krupenikov, the head of Gazpromneft-Zapolyarye, outlines the specifics of the oil rims’ development and reveals the plans for their development of these projects.
— Gazpromneft-Zapolyarye is developing oil rims at license areas of parent Gazprom. Will you tell us what projects are in the company’s assets portfolio?
— Gazpromneft-Zapolyarye is working at nine of Gazprom’s fields under long-term risk operatorship agreements. The geography of our projects covers the Yamalo-Nenets Autonomous District, Yakutia and the Orenburg region. At Yamal, we are developing the rims of the Pestsovoye, En-Yakhinskoye and Zapadno-Tarkosalinskoye fields. In the Orenburg region there are oil rims of the Filippovskaya deposit at the Orenburgskoye field. The perimeter of our projects also includes oil rims of one of the largest fields in Eastern Siberia — Chayandinskoye — which is a resource base for the Power of Siberia gas pipeline.
In addition to the oil rims, we are developing the Achimov deposits of the Yamburgskoye, Urengoyskoye and Pestsovoye fields and the neocomian-jurassic deposits of the Bovanenkovskoye and Kharasaveiskoye fields.
Another strategic area of our activity is the Integrated Project Management (IPM) project — an integrated service for managing the construction of wells for Gazprom. We provide engineering and technological support for turnkey works. For Gazprom Neft, this is an opportunity to monetize our experience and expertise in drilling operations at fields with complex geology. Drilling operations are carried out using our own supervision under the so-called “separate service” scheme. That is, the customer itself manages the construction process and all technological services and is also responsible for the risks that arise. This approach improves the speed and efficiency of drilling projects.
— You have already mentioned the long-term risk operatorship agreements. What mechanism is it and why was it necessary to create a new cooperation scheme for the development of the oil rims?
— The long-term risk operatorship agreement (DROD) was developed and first used in Russia by Gazprom Neft to work at areas licensed to Gazprom. This scheme does not imply the transfer of a license from Gazprom, but allows us to operate under the terms similar to those of actual licenseholders. Under the long-term risk operatorship agreements, we invest our own funds, are responsible for the development of the field and bear all the risks, and we consolidate reserves under international classification, production and financial results from the implementation of these projects on our balance sheet.
— What are the specifics of developing oil rims?
— Reserves of oil rims are classified as hard-to-recover. Their distinguishing feature is the small oil-saturated thickness, the presence of gas and water. The efficient development of such complex resources requires special technological solutions for drilling, design, development and construction. We use highly efficient drilling equipment, and actively use modern digital tools and block-modular designs. Modern technologies and expertise allow us to launch such fields as soon as possible and ensure the profitability of these projects.
— How is oil and gas production carried out at such fields?
— Gazprom is developing the gas part of the fields, we are developing oil rims, deposits hydrodynamically adjacent to a large gas cap. In most of the fields, this process goes in parallel. Gazprom Neft’s expertise is needed to maximize oil production from such complex assets. In the process of developing the oil part, we also receive associated and natural gas. This also requires the development of gas infrastructure: gas pipelines, compressor stations and preliminary and comples gas pretreatment units. Therefore, projects for the development of oil rims are complex and require a number of competencies in these areas. Gazprom Neft has them.
— What share of the company’s production can oil rims take and what part do they play in the company’s long-term development strategy?
— The development of oil rims is one of the key areas of Gazprom Neft’s long-term strategy until 2030. Hydrocarbon production from oil rims will amount to some 10% of Gazprom Neft’s total production after 2023, when we bring all the projects into operation.
— What are the reserves of oil rims developed by Gazpromneft-Zapolyarye?
— In 2020, there was a reserves audit under the international PRMS and SEC classifications for the deposits developed under long-term operatorship agreements. The results showed that proved hydrocarbon reserves (1P) totaled some 500 million tons of oil equivalent (3.66 billion barrels of oil equivalent), while proved and probable reserves (2P) amounted to roughly 1 billion toe.
— What is the quality of crude that you will be producing from the oil rims?
— The Pestsovoye, En-Yakhinskoye and Zapadno-Tarkosalinskoye fields harbor premium quality light sweet crude. Oil from the Orenburgskoye field will undergo pretreatment at the Orenburg gas processing plant before being delivered to the trunk pipeline system. Oil from the Chayandinskoye field is also brought to the quality of Espo grade in accordance with the necessary standards, which allows it to be shipped through the East Siberia—Pacific Ocean (Espo) pipeline.
— What plans does the company have for the development of the Chayandinskoye field’s oil rims? When will commercial production start? What is the production plan for 2021 and when will you be able to reach peak production?
— Currently, construction and installation work is underway and the field is being drilled out. Two drilling rigs are in operation; there will be about 70 wells in total with 13 already drilled. Most of them are high-tech fishbone wells. In early April, we launched an oil pipeline, which allowed us to increase shipping volumes from the field to the Espo pipeline. A new oil pretreatment unit will be launched later this year. The gas infrastructure required for the full-scale development of the oil rims will be commissioned in 2022. In 2021, we plan to produce 800,000 tons at the field. Peak production will be reached after the launch of all infrastructure facilities and is estimated at 1 million-1.5 million tons annually. Peak gas production is seen at about 2 billion cubic meters per year.
— Where will the gas from the field be supplied?
— We are building a compressor station to compress associated gas and then send it to Gazprom Dobycha Noyabrsk gas pretreatment unit. From there, the gas will be delivered to the Power of Siberia pipeline.
— You have launched the oil pipeline from Chayandinskoye field. Will this help increase crude production and shipments?
— Right. Previously, some 1,000 tons/d—1,100 tons/d of crude was delivered by tank trucks from the oil pretreatment unit to the complex gas pretreatment unit of Gazprom Dobycha Noyabrsk. Then, after being mixed with condensate, the crude was supplied to the Espo system. With the commissioning of the oil pipeline, we will be able to increase production and supplies by one and a half times. After the launch of the new crude pretreatment unit, which is under construction today, we will be able to increase the volumes of oil delivered to several thousands tons per day.
— Did work at the field stopped last year due to the pandemic?
— We created an effective system of barriers to the spread of coronavirus together with Gazprom Dobycha Noyabrsk. This made it possible to complete all the works planned for the spring and summer seasons of 2020, and even accelerate the pace of construction, ensuring the early launch of the pipeline.
— Yakutia is a very challenging region. What were the difficulties you faced when working in a new region for the company?
— Working at Chayanda involves both climatic and geological challenges. First, there are abnormally low temperatures. In winter, the thermometer drops to minus 60° Celsius. Secondly, it is remote from civilization and there is a clear lack of infrastructure. There are no major train stations nearby. Goods are delivered by winter roads or by water. The logistics of transporting people is also incredibly complex. The field itself is characterized by abnormally low reservoir pressure, a high gas factor and the presence of water. The terrain is also very difficult: rocky ground, the presence of permafrost. The development of the Chayandinskoye field is Gazprom Neft’s first full-scale production project in Yakutia. This is our first experience, very difficult but interesting.
— The region is also very challenging in terms of environment. How was the pipeline designed taking into account environmental standards?
— To eliminate the impact on permafrost soils, we used modern heat-insulating materials. The oil pipeline along the entire route is laid underground and does not disturb the channels of waterways along its the way. The pipeline crosses 24 water barriers and 76 operating communication facilities. We built the route taking into account the forest areas along the way; when laying the pipe, we tried to go through an area that does not require deforestation. The oil pipeline is built in accordance with all environmental and industrial safety standards, we use control systems and digital instruments, including unmanned aerial vehicles, which monitor the state of the pipeline system 24 hours a day.
— What are the plans for developing the oil rims of the Pestsovoye, En-Yakhinskoye and Zapadno-Tarkosalinskoye fields?
— The Pestsovoye and En-Yakhinskoye fields are our pilot projects carried out under long-term risk operatorship agreements. In 2017, we started pilot works and bringing back to production the wells at En-Yakhinskoye field and drilling at Pestsovoye. In 2021, we plan to produce about 1.4 million tons of oil from these assets. We will reach peak production in 2023. Taking into account the Zapadno-Tarkosalinskoye field, the maximum annual production level will be about 1.9 million tons of liquids and about 4 Bcm of gas.
— How is oil transported from the fields?
— We use auto transport to railway terminals near Urengoy. After the launch of an alternative scheme, oil will be transported via a pipeline from Pestsovoye to the En-Yakhinskoye field, and then to the Gazprom’s infrastructure and further to the Zapolyarye-Pur-Pe oil pipeline. We have completed the work required to start delivering crude through the pipeline: we completed the infrastructure and commissioned mobile crude pretreatment units at Pestsovoye and En-Yakhinskoye fields. The oil pipeline is also ready, we plan to start pipeline supplies in the third or fourth quarter of 2021. In addition, we are building a compressor station with a gas pretreatment unit to prepare associated and natural gas and supply it to Gazprom’s infrastructure for further transportation to the unified gas supply system. The drilling program has been fully completed at the Zapadno-Tarkosalinskoye field — 10 high-tech wells have been built there. Construction of a mobile crude pretreatment unit and arrangement of well pads is underway. Oil from the field will be transported by road. Gas will be supplied to the infrastructure of Gazprom Dobycha Noyabrsk.
— What are the plans for the development of the oil rims of the Orenburgskoye field?
— We are developing the Filippovskaya deposit of the Orenburgskoye oil and gas condensate field. The main specific of this rim is the presence of hydrogen sulfide. Therefore, we carry out the preparation of hydrocarbons at the Orenburg gas processing plant with the release of sulfur. Further transportation is carried out from the Orenburg plant. To date, we brought back to production the existing wells fund and are currently evaluating solutions for further field development.
— What is the work plan for the Bovanenkovskoye and Kharasaveiskoye fields?
— We started a pilot field development program. Once it is completed, we will be able to clarify reserves volumes, the characteristics of hydrocarbons produced, and determine the optimal operating mode for the wells. Now the first well has been drilled at the Kharasaveiskoye field, which we are studying. Drilling of the second well will be completed by June.
— You are also developing the Achimov deposits of section 3A of the Urengoyskoye field. What is the plan for this asset?
— We drilled two wells and are currently testing them. In parallel, we are considering a concept for the development of the asset. We plan to start gas supply in 2024. Condensate production at the field can reach up to 1.5 million tons/yr. Gas production will stand at some 5 Bcm/yr.
— What work is being done at the Yamburgskoye field?
— Today, a pilot project is underway at the field, the purpose of which is to obtain geological information and test new technologies. We completed re-testing of two active wells and drilled and tested four new ones. The data obtained will make it possible to remove a number of uncertainties and form an optimal concept for the development of the Achimov oil deposits of the Yamburgskoye field.
— Thanks. And probably, a traditional question. How did your company manage last year? As far as we know, many projects have been put on hold due to uncertainty over hydrocarbon prices.
— For all projects, we went either in line with the plan or ahead of it. The Gazpromneft-Zapolyarye team and our oilfield service partners worked very effectively. Thanks to our joint work, we have completed the drilling program and production plans. The year was difficult, but we understood that the obligations that we had assumed before Gazprom for projects under the long-term risk operatorship agreements must be met. We have taken a high rate of development and in the coming years we will continue to build up and scale up our projects.