Gazprom Neft and NOVATEK Set up a Joint Venture to Operate on the Arctic Shelf

Gazprom Neft and NOVATEK set up a joint venture to develop the Severo-Vrangelovsky license area. The corresponding agreement was signed at the St. Petersburg International Economic Forum by Alexander Dyukov, Chairman of the Gazprom Neft Management Committee, and Leonid Mikhelson, Chairman of NOVATEK’s Management Committee.

The decision was the result of the implementation of the agreement of intent signed by the companies at SPIEF-2019. Two years ago, the parties expressed their readiness to cooperate in the implementation of Arctic projects and indicated their interest in creating a joint venture capable of performing the entire range of work on prospecting, exploration and development of oil and gas fields. Under the terms of the deal, NOVATEK acquires a 49% stake in the authorized capital of Gazpromneft-Sakhalin (a subsidiary of Gazprom Neft), which holds a license for geological exploration, exploration and production of hydrocarbons within the Severo-Wrangel area. The share of Gazprom Neft in the joint venture will be 51%.

The Severo-Wrangelevsky license area is part of Gazprom Neft’s portfolio of offshore projects. It is located in the waters of the East Siberian and Chukchi Seas and covers an area of ​​117,620 sq. km. The sea depth within the license area in the zone of location of promising structures is 20-90 m. According to the joint assessment of Gazprom Neft and NOVATEK, the area has high prospects and resource potential.

In  2018-2019 , Gazprom Neft carried out large-scale seismic surveys at the Severo-Wrangel license area, which will allow updating the geological model and, together with NOVATEK, making a decision on the further exploration program.

“The Russian shelf has a huge, not yet fully assessed resource potential. However, its study and development requires significant investments, therefore the creation of joint ventures is one of the most effective models for working on the shelf. Partnerships allow combining not only financial capabilities, but also industry expertise, material, human and logistic resources of the participants. We see great potential in the Severo-Wrangel licensed area, which was included in our agreement with NOVATEK, and we consider this deal a good example of strategic cooperation between Russian companies aimed at strengthening Russia’s leadership in the Arctic. “

Alexander Dyukov Chairman of the Management Board, Gazprom Neft