Page 6 - FSUOGM Week 03 2020

FSUOGM COMMENTARY FSUOGM
existing infrastructure we will be able to receive the maximum gains from the block and realise its production potential in the most efficient way, identifying geological uncertainties as part of the additional appraisal effort,” Gazprom Neft’s deputy upstream CEO, Vadim Yakovlev, said in a statement.
Salymsky-2 covers a 376-square km area. Two exploration wells have already been drilled there, and 3D seismic data previously obtained at the site is currently being interpreted, according to Gazprom Neft. The company did not disclose an estimate for the block’s resources, but said they were conventional.
According to a Gazprom Neft spokesman, Shell will not pay anything for the licence, but has agreed to cover all development costs. The partnership will be finalised after certain condi- tions are met, Gazprom Neft said.
SPD is one of the main Russian-Western partnerships in Russia’s oil sector, and one of its oldest, set up back in 1996. The project has bene- fitted from Shell’s technology and reservoir man- agement experience, and currently flows around 120,000 bpd of oil.
Yamburgskoye
Gazprom Neft has also invited Shell to take part in developing newly discovered oil reserves at the Yamburgskoye gas field further north, oper- ated by its parent Gazprom, Yakovlev was quoted as saying by Vedomosti on January 18.
Yamburgskoye has been producing gas since 1986, but it also contains an estimated 1.3bn tonnes (9.5bn barrels) of undeveloped liquids, according to Yakovlev, mostly located in deep Achimov reservoirs. With further exploration, this estimate could rise to 3.5bn tonnes (25.7bn barrels), the executive believes.
The Achimov formation, situated at depths of between 2,500 and 3,500 metres, is one of West- ern Siberia’s most challenging horizons because of its contrasting reservoir characteristics and sometimes high temperature and high pressure. Gazprom Neft is now focusing on its develop- ment to keep output stable as shallower reser- voirs at its fields become depleted.
Gazprom Neft entered a contract with Gaz- prom to exploit Yamburgskoye’s oil last year. It
is targeting first commercial oil in 2024, and has suggested output could reach 160,000 bpd.
Exploration
Gazprom Neft and Shell also signed a memoran- dum with Spain’s Repsol last year on joint explo- ration of Russia’s Arctic peninsula of Gydan.
The Russian firm will control a 50% stake in a joint venture to develop the Leskinsky and Pukhutsyayakhsky blocks, with Shell and Repsol each taking 25%. Russia places their D1+D2 resources at a combined 135mn tonnes of oil equivalent (toe). The deal on the partnership is anticipated to be closed by the end of this year.
Gazprom Neft is also seeking a foreign part- ner at the Neptune and Triton oil discoveries it made off the coast of Sakhalin Island in 2017 and 2018 respectively. The two finds hold a combined 530mn toe, according to Gazprom Neft.
Exploration and appraisal at the sites is due to continue until 2022-2023, after which point decisions on development will be made. Gaz- prom Neft has already offered Shell a slice of the project, according to Yakovlev.
What next?
Shell is already Gazprom’s top foreign invest- ment partner. While both sides are keen to broaden ties further, it could take some time for these various new joint projects to be finalised. Both sides are wary of the US imposing stricter sanctions on Russia’s oil industry.
A fresh sanctions bill is making its way through the US, titled the Defending American Security from Kremlin Aggression Act (DAS- KAA) of 2019. The bill still needs to be passed by the US Senate and the House of Represent- atives and then approved by President Donald Trump before becoming law. And it is under- stood that the White House strongly opposes the legislation.
Depending on its final form, however, DAS- KAA could prevent Western companies from taking part in new oil production ventures in Russia, while potentially putting existing part- nerships in jeopardy.™
Shell and Gazprom Neft’s main joint investment is the Salym fields in Western Siberia (pictured). Source: Salym Petroleum.
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w w w. N E W S B A S E . c o m Week 03 22•January•2020