Russian state-controlled oil producer Gazprom Neft has agreed to form an exploration and development joint venture with privately held compatriot Lukoil, covering several major oil and gas assets in the Yamal-Nenets region in West Siberia.
The partners have an equal interest of 50% in the venture, which will develop three fields — Tazovskoye, North Samburgskoye and Meretoyakhinskoye — as well as explore two West Yubileyny blocks in the region.
Lukoil entered in talks with Gazprom Neft on these assets after Anglo-Dutch supermajor Shell resolved to drop its earlier plan to become a partner in the commercial project.Italian players primed to win fabrication and pipelay contracts on Lukoil project in Baltic Sea
Shell has provided Gazprom Neft with technical assistance and know-how on development challenges, including tertiary oilfield recovery, through the Salym Petroleum Development oil producing venture in neighbouring Khanty-Mansiysk region.
According to Gazprom Neft, the new joint venture will control estimated resources of more than 7.3 billion barrels of oil and about 500 billion cubic metres of gas.
However, most of these resources are located in layers found at depths of 3000 metres and beyond.
The Achimov play, as it is known, features reservoirs with high pressure and low permeability, in challenging geological structures.
Despite Shell pulling out of the discussed venture in April last year, Gazprom Neft started commercial production at the Tazovskoye oilfield in June, when it was already in talks with Lukoil.
According to Gazprom Neft, Tazovskoye has an in-place resource estimated at more than 3 billion barrels of oil and 225 Bcm of gas.
How much oil will be recovered from the field is likely to depend upon the ability of the joint venture to successfully model Tazovskoye’s water migration after the extraction of oil begins.
With the average thickness of oil layers at the deposit being about eight metres, Gazprom Neft is opting to tap the reserves via drilling so called “fishbone holes” with long horizontal segments.
‘World needs cleaner fuels’: Lukoil close to clinching Caspian block entry
Water zones immediately below the oil and gas layers are among the challenges to development of the asset.
Gazprom Neft earlier declared that it will eventually be able to bring Tazovskoye to a production plateau of over 34,100 barrels per day of oil and 8 Bcm per annum of gas.
According to Lukoil chief executive Vagit Alekperov, development of the three fields in the venture’s scope will require of 200 billion roubles ($2.7 billion) of short to mid-term investments.
Gazprom Neft said that on-site exploration efforts at North Samburgskoye and Meretoyakhinskoye have been mostly completed, with the company now working on geological models of their reservoirs and drafting development schedules.
The joint venture will be finalised after Gazprom Neft and Lukoil obtain necessary regulatory approvals from authorities in the next several months.