Gazprom Neft Confirms Capability of Year-round Offshore Oil Export from Novoportovskoe Field

Press-release

Gazprom Neft has confirmed that it is possible to organize year-round oil export by sea from the Novoportovskoe field located north of Yamal via the Gulf of Ob. For this purpose, the atomic icebreaker Vaigach has undertaken a test passage from the port of Sabetta (north-east of the Yamal peninsula) to the supposed location of Novoportovskoe field oil shipping, located 400 km south of Cape Kamenny.

The navigability of the Gulf of Ob was checked on April 25-28, during the period when ice conditions are the most difficult, because the ice is at its thickest in spring, reaching up to two meters. The icebreaker was hired from Atomflot; environmental field surveys and observations over ice conditions were carried out by specialists from the Krylov Research Institute.

“The icebreaker passage to Cape Kamenny, completed for the first time in the harshest ice conditions, has made it possible to demonstrate the possibility of using the Northern Sea Route for year-round oil export from the Novoportovskoe field. This transport solution may become the basis for commencing Novoportovskoe field development. As a result, Gazprom Neft will make one more step toward development of the northern part of Yamal, a strategic region for the Company, where a new production cluster is formed due to projects at an early stage of implementation,” noted Boris Zilbermints, Deputy Chief Executive Officer for Exploration and Production.

“The composition of the Novoportovskoe field oil, characterized by a low sulfur content, means that marine transport of product will be more efficient than export by land, which would require significant investment and which would entail a higher oil price than that of Urals and Brent grades,” noted Anatoly Cherner, Deputy Chief Executive Officer for Logistics, Processing and Sales.

Notes for editors

Recoverable reserves of the Novoportovskoe oil and gas condensate field as per Category ABC1 are equal to 222 million tons of crude oil and 211 billion cubic meters of gas. The field is located far from transport infrastructure, in the Yamal Area of the Yamal-Nenets Autonomous District, 30 km from the coast of the Gulf of Ob. The ice-free period in this part of the Gulf of Ob lasts 3 months, from July till September.

It is planned to complete the transfer of a license for the Novoportovskoe field from Gazprom Dobycha Nadym to Gazprom Neft by the end of 2011.

Gazprom Neft has already started preparations for developing the field. In the first half of the year, the first stage of pilot production was completed at the Novoportovskoe field: four wells were re-activated and investigated (60 tons of oil was produced from these wells).

A total of 146 wells were drilled during the exploration period at the Novoportovskoe field.

Gazprom Neft plans to commence production at the field in 2013-2014, with a volume of 400-500 thousand tons per year. It will be possible to produce 6-9 million tons of oil per year at the Novoportovskoe field by 2020. Limitations with regard to oil export by marine transport in difficult ice conditions will be made more exact in the course of pilot production.