Gazprom Neft and TNK-BP agreed to acquire stakes in CJSC Messoyakhaneftegaz

Press-release

Gazprom Neft and TNK-BP have agreed to acquire 50% stakes each in CJSC "Messoyakhaneftegaz", owner of development licenses for the group of Messoyakha oil and gas fields in the north of the Yamal Peninsula.

CJSC Messoyakhaneftegaz belongs to the Slavneft group of companies owned by Gazprom Neft and TNK-BP on a parity basis. Following assessment of the prospects of developing the Messoyakha fields, and also considering the scope of the project, the Slavneft shareholders reached agreement on creating a joint venture with the purpose of developing the project.

By directly managing the asset, the shareholders will be able to promptly make key decisions, simplify financing procedures for this large-scale investment program and expand borrowing opportunities. The investment into Messoyakha fields development is preliminary estimated at $US 15-18 billion.

Gazprom Neft will be the operator of the project.

The development of the fields will require the shareholders to tackle a wide range of engineering, technical and logistical challenges associated with severe climate conditions and absence of infrastructure in the north of Yamal. Combining the experience and technologies of the two companies will ensure efficient project implementation.

Gazprom Neft Board Chairman Alexandr Dukov noted that "acquisition of Messoyakhaneftegaz will enable us, jointly with TNK-BP, to begin developing large fields in Russia's new oil production region. By participating in the project, Gazprom Neft is going to gain new experience in executing projects "from scratch" in the harsh conditions of the Polar Region. On top of that, development of Messoyakha fields will be another step towards the company creating an oil production hub in the north of Yamal. It will also ensure synergy with Gazprom Neft's other strategic projects in the region".

"In line with TNK-BP strategy, Yamal projects are going to play a decisive role in the company's business in the next five years," said TNK-BP COO Bill Schrader. "This region is becoming a new major oil and gas hub in Russia and one of TNK-BP's centers of growth. The success of these plans will be largely determined by the support of the government and by creating the necessary infrastructure".

Reference

Messoyakha oil and gas fields are located on the Gydan Peninsula, Tazovskiy Administrative Area, Yamal-Nenets Autonomous District. Recoverable oil and condensate reserves of West-Messoyakha and East Messoyakha fields in С1+С2 categories amount to 560mln t, gas reserves - to 230 bcm.

As of late 2010, 48 exploration and appraisal wells have been drilled in the License Areas. Peak production is expected to reach 20mln t of oil and condensate and 10 bcm of gas per annum.