Russian oil producers Lukoil and Gazprom Neft have finalized the financial terms of their previous agreement under which Lukoil will become a 50% partner at Meretoyakhaneftegaz, an oil and gas company in the Yamal-Nenets region of Western Siberia.
According to Lukoil, it will pay 52 billion rubles ($710 million) for the stake to Gazprom Neft, which currently has a 100% stake in the company.
Along with its payment, Lukoil will also receive the right to a 50% share in a long-term loan of 35 billion rubles that Gazprom Neft had previously granted to the company to finance its operations, the company said.
The terms of the transaction also include an obligation for Lukoil to provide 8.9 billion rubles of additional funding to Meretoyakhaneftegaz, to fund its exploration efforts to identify additional reserves in its license blocks, Lukoil added.
Meretoyakhaneftegaz is about to develop three fields – Tazovskoye, North Samburgskoye and Meretoyakhinskoye, as well as explore two West Yubileyny blocks in the Yamal-Nenets region.
Lukoil said that the geological resources in place of the assets granted to the company are estimated at more than 7.3 billion barrels of oil and condensate, and 500 billion cubic meters of gas.
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The company declared production of almost 11,000 barrels per day of oil and condensate, and 2.9 billion m3 of gas, between January and November this year, after the start of production from the Tazovskoye field in June, according to Russia’s Energy Ministry.
Lukoil said the equity transaction, announced in September, is now expected to close next year, after obtaining approval from the two companies’ directors and clearance from Russia’s federal anti-monopoly service.
State-controlled Gazprom Neft is seeking partners to accelerate its major exploration and development projects in Western Siberia as the company aims for rapid growth in hydrocarbon production.
Earlier this week, the oil producer said it had commissioned production wells and supporting infrastructure in the Pestsovoye and Yen-Yakhinskoye fields which are licensed to its parent gas monopoly Gazprom. , in the Yamal-Nenets region.
Gazprom Neft said development horizontal wells have targeted so-called oil rims on these gas fields – thin layers of oil that sit between gas and water reservoirs. The company now expects production from these layers to reach a total production of 117,000 barrels of oil equivalent per day in 2022.