Gazprom Neft, Repsol and Shell have signed a memorandum of understanding at this year’s St Petersburg International Economic Forum on establishing a joint venture to develop the Leskinsky and Pukhutsyayakhsky license blocks on the Gydan Peninsula.

The document was signed by Vadim Yakovlev, First Deputy CEO, Gazprom Neft, Tomás García Blanco, E&P Executive Managing Director, Repsol, and Cederic Cremers, Shell Country Chair, Russia. Under this memorandum the parties plan to have detailed terms in place by the end of 2019, as well as singing an agreement on establishing the joint venture.

The deal is expected to be closed in 2020 once all necessary corporate and regulatory approvals have been obtained, and all legal preconditions met. The licenses to the Leskinsky and Pukhutsyayakhsky blocks on the Gydan Peninsula will be added to the company’s asset portfolio. Gazprom Neft will have a 50-percent interest in the joint venture once the transaction has closed, with Repsol and Shell each holding 25 percent.

Establishing this joint venture is intended to bring all parties’ resources and skills together in developing an under-researched exploration cluster in the north—east of the Gydan Peninsula. The Leskinsky license block is located in the Taymyrsky district of the Krasnoyarsky Krai, and covers an area of 3,027 square kilometres. Official estimates put D2 recoverable oil reserves at 100 million tonnes of oil equivalent (mtoe).

Adjoining the Leskinsky block, the Pukhutsyayakhsky block, which covers an area of 825 square kilometers, is located in the Tazovsky district of the Yamal-Nenets Autonomous Okrug. According to official estimates, recoverable D1 and D2 oil reserves stand at 35 mtoe.

Both blocks are under-explored and located in considerable distance from oil-and-gas and transport infrastructure.

Vadim Yakovlev, First Deputy CEO, Gazprom Neft, commented: “The proportion of Arctic projects in Gazprom Neft’s portfolio continues to grow, year after year: this is where we are developing new territories, and preparing the basis for future production. While still an under-explored territory, we do, however, understand that Gydan conceals massive resource potential. Joining forces with Repsol and Shell, with whom we have successful experience in collaboration, through our current joint ventures, will allow us to address the very ambitious task of developing new and promising assets successfully.”

Tomás García Blanco, E&P Executive Managing Director, Repsol, added: “Repsol is very pleased to increase its collaboration with Gazprom Neft and Shell, which has been very productive in other projects. We are also excited about exploration in the Gydan Peninsula, a frontier area with a great potential.”

Cederic Cremers, Shell Country Chair, Russia, stressed: “We are excited by the opportunity to work on two new blocks in the extreme and harsh conditions of the north part of west Siberia. This will require best oilfield technologies, best environmental and safety expertise, and best partners. I am confident we have all of them in the Gydan project.”

About Gazprom Neft

Gazprom Neft is a vertically integrated oil company, primarily involved in oil and gas exploration and production, refining, and the production and sale of oil products. The Gazprom Neft’s corporate structure comprises more than 70 production, refining and sales subsidiaries throughout Russia, the CIS, and abroad.
The company’s proved and probable reserves (SPE-PRMS) are estimated at 2.78 billion tonnes of oil equivalent (btoe), making Gazprom Neft one of the top-20 largest oil and gas companies in the world, and one of Russia’s top three largest companies in terms of production and refining volumes. Total production in 2017 reached 89.75 million tonnes of oil equivalent (mtoe), with refining volumes of 40.1 million tonnes.
Gazprom Neft products are exported to more than 50 countries worldwide, and sold throughout the Russian Federation and abroad. The company’s filling station network totals more than 1,850 outlets throughout Russia, the CIS and Europe.

About Repsol

Repsol is a global energy company present throughout the whole energy value chain. The company has upstream activity in 25 countries, produces 715,000 barrels of oil equivalent per day and has one of the most efficient refining systems in Europe. Repsol also operates low-emissions electricity generation assets, including photovoltaic and offshore wind power projects, and it is pioneering development of mobility initiatives to create new solutions and energy sources for transportation.

About Royal Dutch Shell plc

Royal Dutch Shell plc is incorporated in England and Wales, has its headquarters in The Hague and is listed on the London, Amsterdam, and New York stock exchanges. Shell companies have operations in more than 70 countries and territories with businesses including oil and gas exploration and production; production and marketing of liquefied natural gas and gas to liquids; manufacturing, marketing and shipping of oil products and chemicals and renewable energy projects.