Gazprom Neft, PetroVietnam sign Arctic agreement

Tuesday, November 25, 2014

Russia's Gazprom Neft and state-owned PetroVietnam have begun exclusive talks to potentially cooperate in the development of the Dolginskoye field, located about 75km off the Russian coast in the Pechora Sea.

Gazprom Neft said in a statement that the two companies are expected to sign an operating agreement by May 2015 and outline terms for the creation of a special company for the project. Gazprom Neft, the oil branch of Russian state-owened Gazprom, will be a majority stakeholder.

Under the agreement, Gazprom Neft is also prohibited from entering discussions to work with other companies on the project over the next six months.

Four exploratory wells have been drilled at Dolginskoye after the GSP Saturn jackup rig arrived on 18 June. Gazprom Neft said in a statement that drilling operations would occur during the area’s ice-free months to survey geological structures and prepare it for full-scale development. Located in water depth of about 40m, the well was announced to be 3500m deep.

The Dolginskoye field is planned to be brought onstream in 2020 and estimated to have more than 200 million tons of recoverable reserves. Along with Prirazlomnoye, it is the one of two offshore fields Gazprom Neft operates in the Arctic Shelf.

Weatherford and Schlumberger were involved in the project; however, US and EU-imposed sanctions related to the Ukrainian situation have cut Russia off from access to Western oil and gas-related technology and financing. State-owned Vietnam News Agency reported on 14 November that Prime Minister Nguyen Tan Dung told Gazprom Neft Chairman Alexander Dyukov that his company could always rely on Vietnam for support.

Gazprom Neft also executed an agreement with Binh Son Refining and Petrochemical for the long-term maintenance of the Dung Quat oil refinery. In addition, Gazprom Neft will supply ESPO oil to the facility from Russia’s Kozmino port.

Photo of the Dolginskoye development from Gazprom Neft.

Read more:

Frosty relations (OE article examining the effects of the Western-imposed sanctions on Russian companies)

Drilling begins at Dolginskoye

Gazprom makes Arctic advances (OE article on the Prirazlomnoye field)


Categories: Drilling Russia Activity Arctic Oil Production Asia Exploration Jackup

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