Exploration and production
The Company relies on state-of-the-art technologies and a balanced investment policy to effectively replace its resource base. This is key to further growth despite the volatile oil prices, changing tax environment and the deteriorating structure of remaining commercial reserves across its conventional oil production clusters. Expansion of the Group’s resource base in 2018 was supported by the improved exploration and production drilling technology and introduction of advanced non-seismic exploration techniques.
Reserves of the Company are audited in line with PRMS standards and more conservative SEC5 standards. Based on the Independent Reserves Assessment Report prepared by DeGolyer and MacNaughton, as at 31 December 2018, its aggregate proven and probable reserves (including the Company’s share in subsidiaries’ reserves accounted for by the equity method) estimated in accordance with PRMS standards were 2,841 mtoe, excluding NIS reserves. In 2018, reserves increased 2.2% y-o-y. Gazprom Neft’s ratio of proven reserves to production (PRMS classification) is 17 years. The ratio of hydrocarbons produced in 2018 to new reserves (including new acquisitions) is 165%. Gazprom Neft’s largest discovery of the year was a new field in the Sea of Okhotsk (off the shore of the Sakhalin Island). Named Triton, the new deposit has geological reserves of more than 137 mtoe. Gazprom Neft continues exploration of offshore Sakhalin, and reserves in the region may increase. The Company tapped into four new exploration areas (Yamal, Orenburg Region, Khanty-Mansi Autonomous Area – Yugra, and north-eastern Gydan) while also gaining access to 21 licence blocks.
The Company strengthens its leadership in hydrocarbon production both in Russia and globally focusing on high-impact technologies and rational development of the Russian Arctic resources. Its total output (including shares in joint ventures) increased 3.5% y-o-y to 92.88 mtoe. The average daily production across the Group amounted to 254.45 ktoe (up 3.5%).
The strongest drivers behind production growth were the Company’s largest projects: Prirazlomnoye, Novoportovskoye and Vostochno-Messoyakhskoye fields.
The Company continues forming a strong cluster in the Arctic to secure its oil and gas potential for the future. The plan for 2019 is to start development in the northern part of the Novoportovskoye field.
“We are a different company today, whether measured by reserves and production or by the complexity of the projects we deliver. To make another step forward, our business processes should evolve. We want to become a global leader in technology, efficiency and safety, and a model for others to follow. To make it happen, we need to change too.”Vadim Yakovlev First Deputy CEO Gazprom Neft