Page 5 - FSUOGM Week 28 2019

FSUOGM COMMENTARY FSUOGM Gazprom elds in the
e company launched production in 2009 at a second block, 2A, where it aims to raise yields to an annual plateau of 8.7bcm. It has unveiled plans to develop the 3A, 4A and 5A blocks as well, estimating that together with 1A and 2A, they could ow 36.8bcm per year of gas.
Despite managing to develop 2A on its own, Gazprom still wants foreign partners to assist at these remaining Achimov blocks. It is preparing to close a deal with Austria’s OMV on the sale of a 25% stake in 4A and 5A by the end of this year. e pair agreed on OMV entering the project in 2016, in return for Gazprom securing a 38.5% stake in OMV’s business o the coast of Norway. But this transaction was blocked by Norwegian regulators, with Gazprom linking the obstruc- tion to political tensions between Europe and Russia.
e partners eventually nalised a new agree- ment in October 2018, under which Gazprom dropped its plans to acquire North Sea assets and OMV opted to buy its stake in 4A and 5A out- right. But a purchase price was not agreed until last month, when OMV pledged to pay €905mn ($1bn).
First gas from 4A and 5A is now anticipated by the end of 2020 – a year later than originally expected.
Achimov oil
While most of Gazprom’s Achimov projects are focused on gas, the company is also looking to exploit deep oil reservoirs at some of its largest gas elds. Gazprom Ne aims to sink several wells this year to test Achimov oil structures within the Yamburgskoye eld, with the ulti- mate goal of launching commercial production in 2024. It estimates that the Western Siberian eld could ow crude at a rate of 160,000 barrels per day.
Gazprom Ne wants to use Yamburgskoye as a testing ground for its technologies and exper- tise, which it can then apply at other Achimov deposits. OMV is in talks on joining this project as well, CEO Rainer Seele told Russian media earlier this month.
Gazprom’s e orts demonstrate the lengths Russian producers are increasingly having to go to deliver on output goals. As the share of hard- to-recover oil and gas in overall production expands, this will naturally raise development and production costs. e same is also true for remote elds in the Arctic and Eastern Siberia. But Russia’s comparatively low costs provide producers with some room to develop more challenging projects while also staying competi- tive internationally.™
Yamalo-Nenets region.
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