Gazprom’s strategy to invite partners for hydrocarbon reserves development is aimed at efficient extraction of resources in a complex geological environment and implies asset swapping on a parity basis in order to expand the scope and geographic reach of Gazprom’s businesses.
For instance, such an approach has been applied to the Yuzhno-Russkoye oil and gas field development. In Russian-German joint venture OAO Severneftegazprom – the field licensee – Gazprom owns 50% plus six ordinary registered shares, German BASF SE and E.ON AG – 25% less three ordinary registered shares and three preference non-voting shares each. In exchange for the German companies participation in Severneftegazprom, Gazprom increased its stakes in Wingas joint venture (to 50% less one share), in ZAO Gerosgaz (to 100%) holding 2.93% of OAO Gazprom shares and obtained a 49% stake in Wintershall subsidiary entitled to develop and produce hydrocarbons in Libya under concession agreements.
The Yuzhno-Russkoye field reserves exceed 1 trillion m3, which is, given the present-day volumes of annual gas supply from Russia to Germany, commensurate with exports for 17 years ahead. The field was put into commercial operation in December 2007 and reached its design capacity of 25 billion m3 of gas per annum in 2010.
Gazprom has already gained experience in hydrocarbon development projects – OOO Achimgaz (a joint venture owned by Gazprom and Wintershall on a par) implements the project for developing the Achimov deposits in the Urengoyskoye field.
Gazprom actively promotes cooperation with foreign companies within the Sakhalin II project. In pursuance of the Protocol signed in December 2006 by OAO Gazprom, Shell, Mitsui and Mitsubishi Corporation, Gazprom joined Sakhalin Energy (Sakhalin II operator) as the principal shareholder.
Gazprom purchased a 50% stake plus one share in Sakhalin Energy for USD 7.45 billion. To close the deal each of the Sakhalin Energy shareholders decreased its stake by 50% with recompense to be distributed on a pro rata basis. The agreement on share purchase and sale was signed in April 2007. The shareholding structure of Sakhalin Energy is currently as follows: Gazprom – 50% plus one share, Shell – 27.5% less one share, Mitsui – 12.5% and Mitsubishi – 10%.
In December 2008 the Sakhalin II project started exporting crude oil on a year-round basis and on February 18, 2009 the first Russian LNG plant was put into operation. The entire output of the plant has been contracted out under long-term arrangements (effective for over 20 years). In 2009 more than a half of Sakhalin LNG was supplied to customers in Japan and the remainder was delivered to South Korea, India, Kuwait, China and Taiwan.
In 2012 the LNG plant in Sakhalin produced 10.9 million t of LNG. Over 70% of LNG was transported to Japan and the remainder – to consumers in South Korea and some other Asia-Pacific countries.
Thus, a full-scale commercial operation phase began within Sakhalin II being the world’s largest integrated petroleum project embracing two offshore oil and gas fields development to the northeast of the Sakhalin Island (Piltun-Astokhskoye and Lunskoye), oil and gas production and transmission via trans-Sakhalin pipelines, LNG production and hydrocarbons export.
In January 2011 OAO Gazprom and the Agency for Natural Resources and Energy under the Japanese Ministry of Economy, Trade and Industry signed the Agreement of Cooperation envisaging the preparation of a joint feasibility study on the options for natural gas utilization near Vladivostok as well as for natural gas and gas chemicals transportation from the Vladivostok region and their sales to potential customers in Asia-Pacific.
A consortium of Japanese companies – JAPAN FAREAST GAS Co., Ltd. (ITOCHU, JAPEX, MARUBENI, INPEX, and CIECO) – was established with the assistance of the Japanese Agency for Natural Resources and Energy. The consortium participants are to perform the feasibility study on behalf of the Japanese party.
In April 2011 in furtherance of the above mentioned document Gazprom and Japanese consortium JAPAN FAR EAST GAS Co., Ltd. signed the Agreement on the joint feasibility study development for an LNG plant near Vladivostok.
In March 2012 OAO Gazprom Management Committee adopted the decision to move over to the next stage of implementing the project for the LNG plant construction near Vladivostok. In September 2012 OAO Gazprom and the Japanese Agency for Natural Resources and Energy signed the Memorandum on the Vladivostok-LNG project, which is expected to boost the comprehensive cooperation in order to promote the project including its financing and gas marketing aspects. By now, the Investment Rationale for the project has been prepared.
On December 15, 2009 Gazprom and Petrovietnam entered into the Agreement on Strategic Partnership. The document stipulates active interaction between Gazprom and Petrovietnam in oil and gas projects in Russia, Vietnam and in third countries within Gazpromviet. The Nagumanovskoye oil, gas and condensate field located in the Orenburg Region as well as the Severo-Purovskoye gas and condensate field in the Yamal-Nenets Autonomous Area were defined as the objects of the companies’ cooperation in Russia.
Besides, in September 2009 Gazprom closed the deal with the consortium of Italian companies – Eni S.p.A. (Eni) and Enel S.p.A. (Enel) – on obtaining a 51% stake in OOO SeverEnergia that controls a number of companies holding licenses for hydrocarbons exploration and production in Western Siberia.
In order to pursue the Group’s oil strategy and optimize the said fields development, in 2010 Gazprom decided to sell its stake in OOO SeverEnergia to the joint venture between OAO Gazprom Neft and OAO NOVATEK. Owing to the experience gained by Gazprom Neft, multi-layer oil deposits of these fields will be developed in the most efficient way. NOVATEK will bring in a synergetic effect due to the company’s infrastructure available for gas condensate treatment. All these factors will significantly accelerate putting the fields into commercial operation and reduce the project capital costs.
In September 2011 OAO Gazprom and OOO SeverEnergia signed an agreement on the purchase of gas produced from the Samburgsky block in the Yamal-Nenets Autonomous Area. In April 2012 gas production from the Samburgskoye field was launched. The company will start oil production in 2013.