Gazprom Neft Management Board reviews issues regarding the fulfilment of the company’s license obligations, and the long-term outlook for fulfilment of its offshore projects

Press-release

The Gazprom Neft Management Board has reviewed the fulfilment of the company’s licensing obligations in its development of fields in Russia. Gazprom Neft holds subsoil usage rights to 77 license blocks throughout the Yamalo-Nenets Autonomous Region, the Khanty-Mansi Autonomous Region, the Omsk, Tomsk, Tyumen, Irkutsk, and Orenburg Oblasts, the Sakha Republic (Yakutia), as well as offshore fields in the Pechora and Eastern-Siberian seas. Under its existing licensing agreements, Gazprom Neft undertook seismic operations in the order of 7,300 square meters in 2014, as well as drilling 37 exploratory wells. The company’s drilling success rate was 81 percent, an increase on the preceding year (71 percent). On the basis of its year-end results, reserves were replaced by a factor of five (497 percent), at 66.2 million tonnes of oil equivalent (mtoe). Total proved and probable reserves (international standards, proved + probable — 2P) totalled 2.55 billion toe — an 11.5-percent (263 million tonne) increase on 2013.

The company acquired 14 new licenses last year, including six for geological prospecting in the Khanty-Mansi and Yamalo-Nenets Autonomous Regions. Several Arctic fields (the Severo-Vrangelevsky, Heysovskiy and Severo-Zapadny) were also added to the company’s asset portfolio.

Gazprom Neft pursued a programme of actively minimising its licensing risks throughout 2014, including through the implementation of an automated system for monitoring subsoil use, allowing the monitoring of compliance with key conditions under licensing obligations. The professional community appear to have given this a ringing endorsement, with the Central Commission for Subsoil Use starting to test it as a key instrument in consolidating industry information regarding adherence to licensing conditions. Gazprom Neft is also the first company in the industry to test, in practice, the new government mechanism for managing licensing obligations through project documentation, using data on two fields in the Yamalo-Nenets Autonomous Region (the Sredne-Iturovsky and Zapadno-Noyabrsky acreages). All outstanding data will be updated within the course of the two-year period designated for transition to the new system.

The Management Board has also taken under review information on the status of the company’s offshore projects. Gazprom Neft is the first — and, thus far, the only — company engaged in oil production on the Russian Arctic Shelf, at its Prirazlomnoye field in the Pechora Sea. Year-end results show 300,000 tonnes of its new “ARCO” Arctic Oil were produced in 2014, with this volume expected to more than double in 2015.

Gazprom Neft subsidiaries own five licenses to fields and license blocks on the Russian Arctic Shelf. With the exception of the Prirazlomnoye field, all are currently undergoing geological prospecting. The most thoroughly investigated of these, currently, is the Dolginskoye field, with a fourth exploratory well drilled here in 2014, followed by geophysical and hydrodynamic investigations during the short ice-free period. Gazprom Neft signed an agreement with Vietnam’s PetroVietnam in April 2015, on potential joint exploration and development at the Dolginskoye and the neighbouring Severo-Zapadny fields.

In addition to this, Gazprom Neft is actively working with companies in alternative markets, as well as continuing its active engagement with Russian suppliers and contractors, in the procurement of goods and services for the implementation of its offshore projects.

Reference

The Prirazlomnoye field is the first field on the Russian Arctic shelf on which oil production has begun. It is located in the Pechora Sea, 60 kilometres from the Varandey settlement. Oil production at the field commenced in December 2013, with the first tanker carrying the new ARCO (Arctic Oil) leaving the Prirazlomnoye field in April 2014. Development of the field had been contingent upon the design and construction of the “Prirazlomnaya” platform, built to withstand the environmental and climatic conditions specific to the region, and to ensure full safety in oil production. The project is being implemented by Gazprom Neft subsidiary Gazprom Neft Shelf.

A further Gazprom Neft subsidiary, Gazpromneft-Sakhalin, is involved in the geological prospecting of four license blocks on the Russian Arctic Shelf. The Dolginskoye oilfield is located in the Pechora Sea, 120 kilometres south of the Novaya Zemlya archipelago and 110 kilometres north of the mainland. The field was brought into development in 1999; the depth of the sea in this area extends to 35–55 metres. Four exploratory wells have, thus far, been drilled — three in the Severo-Dolginskoye field and one in the Yuzhno-Dolginskoye.

The Severo-Zapadny licensing area is located in the Pechora Sea, relatively close to Gazprom Neft’s other Arctic-Shelf assets, the Dolginskoye and Prirazlomnoye fields. The sea around this block extends to a depth of approximately 200 metres. Its potential resources (D1 reserves, Russian classification) are estimated at more than 105 million tonnes of oil and gas condensate, together with 60 billion cubic metres of gas. The Severo-Vrangelevsky acreage is located on the border of the East Siberian and Chukchi seas. A geological prospecting programme is currently under development. The Heysovskiy block is located in the north of the Barents Sea, to the west of the Novaya Zemlya archipelago, approximately 1,000 kilometres from the mainland. While its commercial reserves (D2, Russian classification) have not yet been confirmed, it is estimated to hold 140 million tonnes of oil and gas condensate, as well as two trillion cubic metres of gas.

Prirazlomnoye photo gallery