The RF Natural Resources Ministry held in the city of Arkhangelsk a meeting dedicated to hydrocarbon development prospects in northwestern Russia. Gazprom’s delegation headed by Alexander Ananenkov, Deputy Chairman of the Company’s Management Committee, specialists from prospecting companies, research organizations, oil and gas production companies, representatives from the regional and central bodies of the RF Natural Resources Ministry as well as authorities of Russian oil and gas production regions, attended the meeting.

The goal of the meeting is to discuss the Draft 2004-2020 state program on comprehensive oil and gas exploration and development in northwestern Russia, including the Arctic shelf.

Presenting his report, A. Ananenkov pointed out that the hydrocarbon reserve exploration and shelf development of the Arctic seas as well as of the Timano-Pechora oil-and-gas-bearing area were one of Gazprom’s top priority tasks. “Accelerated prospecting on land and, primarily, on the continental shelf of northwestern Russia will allow us to establish a new gas industry resource base and a regional basis for delivering gas to domestic and foreign consumers,” – stressed Mr. Ananenkov.

A. Ananenkov also said that Gazprom’s main interests in northwestern Russia were linked to developing hydrocarbon reserves of the Barents and Pechora Seas.

Gazprom determined the unique, one of the world’s largest, Shtokmanovskoye gas condensate field as a basic one to be developed on the Barents Sea shelf. Annual gas production at this field is targeted at 69.3 bcm, including 67.5 bcm of marketable gas. “This means that only one field will annually give us gas volumes accounting for total annual gas production in Norway, the largest natural gas exporter to Europe,” – noted A. Ananenkov.

Gazprom’s main plans to develop the Pechora Sea hydrocarbon reserves are linked to the large Prirazlomnoye and Dolginskoye oil fields as well as to 7 local structures to be, reportedly, developed together with the aforementioned fields.

In 2004-2020 Gazprom plans to conduct additional exploration of the Shtokmanovskoye and Prirazlomnoye fields, carry out exploratory drilling at the Ludlovskoye and Ledovoye fields (the Shtokmanovskoye field area), the Dolginskoye field (near the Prirazlomnoye field) as well as at a range of promising structures. To successfully explore the Barents and Pechora Seas Gazprom will need to attract finance in the amount of RUR 24.2 billion.

“Gazprom’s active production policy will provide northwestern Russia with investment inflow into industrial companies, budgetary tax payments, new workplaces, sustainable supply of energy resources.” – A. Ananenkov was quoted as saying.

The participants of the meeting largely approved the Draft 2004-2020 state program on comprehensive oil and gas exploration and development in northeastern Russia. As it was pointed out, the Program implementation was one of the basic elements of Russia’s energy strategy for the period of up to 2020 and Russia’s Naval Doctrine. Development of the energy and, mainly, of the oil and gas potential of northwestern Russia will ensure the long-term sustainable development of the region’s economy and power sectors and will foster the regional stability of Russia’s power generation and consumption, as a whole.

The parties also expressed common opinion on the need to enact certain legislature supporting the investment attractiveness of the Program. The parties referred, primarily, to establishing a fiscal regime spurring exploration on the Arctic shelf and assignment of rights to further develop hydrocarbon reserves, in case of the new field commissioning.

Reference:

The initial recovered combined hydrocarbon reserves of the Timano-Pechora oil-and-gas-bearing area are estimated at 8.3 billion tons of fuel equivalent and are explored by 34% (oil) and 36% (gas), respectively. Gas and condensate production at the Timano-Pechora oil-and-gas-bearing area is, mainly, carried out by Gazprom (90% of the region’s total gas production).

The initial produced combined gas reserves of the Russian part of the Barents and Pechora Seas account for 29.7 and 2.3 tcm, respectively.

The reserves of the Shtokmanovskoye gas and condensate field are estimated at 3.2 tcm of gas and 31 million tons of condensate.

On October 4, 2001, Gazprom and Rosneft signed the Agreement on joining efforts to develop the Prirazlomnoye and Shtokmanovskoye fields. To implement the Agreement, the parties established on a par the Sevmorneftegaz joint venture holding licenses to develop the above-mentioned fields.

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