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Gazprom Neft achieves a reserve-replacement ratio of 163 percent in 2018

Press-release Efficiency

Gazprom Neft’s total proved and probable hydrocarbon reserves (2P, PRMS)* reached 2.84 billion tonnes of oil equivalent (toe) in 2018, a 2.2-percent increase on 2017 (including the company’s share in production at joint enterprises),** with the company’s reserves-replacement ratio now standing at 163 percent (including acquisitions).

Science and Technology Centre of Gazprom Neft

According to an audit undertaken by independent international consulting company DeGolyer and MacNaughton, Gazprom Neft’s proved (1P) hydrocarbon reserves as at end 2018 are estimated at 1.56 billion toe, a 2.8-percent increase on 2017: the reserves-replacement ratio for this category being 144 percent. Gazprom Neft’s reserves life in terms of proved hydrocarbon reserves (PRMS) currently stands at 17 years. According to SEC standards,*** the company’s total hydrocarbon reserves stand at 1.4 billion toe, a five-percent increase year-on-year.

The expansion of Gazprom Neft’s resource base has been facilitated by fine-tuning exploratory drilling and geological prospecting technologies, and by introducing modern non-seismic exploration techniques. Geological prospecting at the Alexander Zhagrin field, and at assets owned by Messoyakhaneftegaz and Salym Petroleum Development proving particularly successful here. In addition to this, the discovery of the Triton field, offshore in the Sea of Okhotsk, and the acquisition and commissioning of new onshore assets, together with the development of major Arctic projects (the Novoportovskoye and Tazovskoye fields) has done much to promote the expansion and rebalancing of the current asset portfolio.

A total four new fields and 27 hydrocarbon deposits were discovered throughout Gazprom Neft’s license blocks in 2018. The company moved into four new exploration zones located throughout the regions in which it operates, including the Yamal Peninsula, the Orenburg Oblast, and the Khanty-Mansi Autonomous Okrug-Yugra, as well as into a new area for the company in north—east Gydan. Fifty exploratory and prospecting wells were drilled as part of the company’s resource-base development strategy — a record for the company. Exploratory footage drilled was up 92.27 percent in 2018 (to 180,550 metres), while seismic operations covered 4,573 square kilometres, of which 1,481 km2 was offshore.

«Vadim Yakovlev, First Deputy CEO, Gazprom Neft, commented: “Gazprom Neft is one of the world’s top-10 companies in terms of proved hydrocarbon reserves, and a leader in terms of reserves replacement. Developing the resource base is a key condition for achieving the company’s strategic objectives in taking annual oil production to 100 mtoe by 2020, and ensuring further growth thereafter. In raising standards in field development, expanding the company’s area of activity, and moving into new exploration zones, Gazprom Neft is fine-tuning its operational business model, moving from the development of individual blocks to project-portfolio management. The company established a centre of excellence for managing major geological prospecting projects — Gazpromneft Geo — in 2018, consolidating managerial, technological and financial resources to deliver synergies. This approach is in line with current global practices and, I am confident, will allow the company to grow successfully both in terms of production volumes and reserves replacement, as well as in terms of business efficiency.”

Vadim Yakovlev
Vadim Yakovlev First Deputy CEO, Gazprom Neft
Notes for editors

* Developed by the Society of Petroleum Engineers (SPE), the SPE’s Petroleum Resources Management System (PRMS) is the most widely used reserves classification system in the world, reflecting not only the likely detection of oil and gas reserves, but also the economic viability of their recovery, with reserves classified according to three categories — proved, probable, and possible.

** Gazprom Neft’s total reserves include allocations proportional to the company’s interests in affiliated companies (including Slavneft, Tomskneft, Salym Petroleum Development, SeverEnergia, Messoyakhaneftegaz and Nortgaz, as well as assets in Iraq and Venezuela), but exclude the company’s reserves arising from its interests in NIS, Serbia.

*** The reserves classification system developed by U.S. Securities and Exchange Commission.