Gazprom Neft and Shell to form JV for Russian project

Russia’s Gazprom Neft and Shell have signed an agreement to establish a joint venture to study and develop the Leskinsky and Pukhutsyayakhsky license blocks on the Gydan Peninsula, off Russia.

Following completion, the partners will each have a 50 per cent interest in the joint venture. The deal is set to close in 2020 after the necessary corporate and regulatory approvals have come in.

The Leskinsky license block is located in the Taymyr district of the Krasnoyarsk Krai. It covers an area of over 3,000 square kilometers. Its hydrocarbon resources may exceed 100 million tons of oil equivalent. Adjoining the Leskinsky block, the Pukhutsyayakhsky block, which covers an area over 800 square kilometers, is located in the Tazovsky district of the Yamal-Nenets Autonomous Okrug. Its resources are estimated at around 35 million tons of oil equivalent.

At present, 2D seismic surveys have been completed on both blocks. By the end of 2020, drilling of the first prospecting well will begin in the Leskinsky area. Data obtained from this well will make it possible to refine the geological concept and prepare a future project development plan.

At the first stage, Gazprom Neft-GEO will be the operator of exploration works in the Leskinsky and, the Pukhutsyayakhsky blocks.

“Exploration of the Gydan blocks is among Gazprom Neft’s strategic objectives, so changes in the market conditions have not affected our plans. In case of geological success, a new large hydrocarbon province will appear on the peninsula. It is also important for us that we continue the project together with our longstanding partner Shell, with whom we will combine experience and technological expertise to study Gydan and prepare for the development of these new territories," commented Vadim Yakovlev, Vadim Yakovlev Deputy CEO for Exploration and Production Gazprom Neft.

“Despite the economic uncertainties and pressure on our industry, Russia remains a country of strategic focus for Shell. We welcome the expansion of our cooperation with Gazprom Neft, our reliable and highly professional long-term partner. I look forward to using the winning combination of our two companies’ strengths to make the Gydan exploration project a success,” said Cederic Cremers Shell Country Chair, Russia.