Gazprom Neft : and Shell Establish Joint Venture to Develop Major Hydrocarbon Cluster on the Gydan Peninsula

Gazprom Neft and Shell Establish Joint Venture to Develop Major Hydrocarbon Cluster on the Gydan Peninsula

02 December 2020

Gazprom Neft and Shell have closed a transaction to establish a joint venture to study and develop the onshore Leskinsky and Pukhutsyayakhsky license blocks on the Gydan Peninsula. The partners have also agreed to extend collaboration on greenhouse gas (GHG) emissions-reduction projects, and to cooperate in air transport safety.

Under the terms of the transaction the partners will each hold a 50% interest in the joint venture's charter capital. The joint venture will be managed by Gazprom Neft and Shell, on an equal basis. Both companies are consolidating their capabilities and competences to allow the development of a promising exploration cluster in the north-eastern part of the Gydan Peninsula.

The joint venture's asset portfolio includes the Leskinsky and Pukhutsyayakhsky license blocks. Both blocks are marked by a low level of geological investigation, as well as remoteness from transport and oil-and-gas infrastructure.

Located in the Taymyr district of the Krasnoyarsky Krai, the Leskinsky license block covers an area of more than 3,000 square kilometres, with resources potentially in excess of 100 million tonnes of oil equivalent (mtoe). Adjoining the Leskinsky block, the Pukhutsyayakhsky block, located in the Tazovsky district of the Yamal-Nenets Autonomous Okrug, covers an area of over 800 square kilometres, with resources estimated at around 35 mtoe.

So far, 2D seismic surveys have been completed at both blocks. Prospecting and appraisal activities are currently ongoing at the Leskinsky block, in order to gather data to refine the geological concept and prepare a future project development plan. Gazpromneft-GEO will be the operator on the first stage of this project, responsible for exploration works at both the Leskinsky and the Pukhutsyayakhsky blocks.

Meeting in St Petersburg, Gazprom Neft Deputy CEO for Exploration and Production Vadim Yakovlev and Shell Country Chair Russia Cederic Cremers have signed two Memorandums of Understanding on cooperating in reducing GHG emissions, and on improving air transport safety. Pursuant to the Memorandum of Understanding on emissions-reduction projects, the partners will explore opportunities for collaboration in developing nature-based solutions. This Memorandum envisages cooperation in reforestation and forest conservation projects, energy-efficiency enhancement projects, developing renewable energy sources, and more. The second Memorandum of Understanding focusses on sharing best practices and improving standards and controls in air transport safety.

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"Gydan is an area of strategic interest for Gazprom Neft. Assuming our geological hypotheses are confirmed, we can look forward to a new hydrocarbon cluster coming to the fore on the peninsula. We'll be splitting investments on this project with our strategic partner, Shell, and combining our experience and technological expertise. Going forward, data on the structure of these blocks will make a major contribution to investigating these as yet undeveloped areas. Our collaboration with Shell already stands at more than 10 years' duration, and continues to grow - including in sharing best practices, both in production and in environmental and industrial safety. Signing these two memorandums today formalizes our work in these areas."

VADIM YAKOVLEV

Deputy CEO for Exploration and Production, Gazprom Neft

"Shell welcomes the opportunity that the Gydan project brings to strengthen our long-standing cooperation with Gazprom Neft. Our successful track record of working together developing the Salym fields gives me great confidence in our companies' ability to conduct the exploration programme in accordance with high technical, environmental and social standards."

Cederic CremersShell Country Chair Russia