Shell, Gazprom Neft Eye Siberian JV
Anglo-Dutch major Shell and Russia’s Gazprom Neft have filed for regulatory approval to form a new joint venture to develop oil and gas fields in the Yamalo-Nenets region of Western Siberia.
The pair submitted a request to the federal antimonopoly service (FAS) for Shell to take a 50% stake in Meretoyakhaneftegaz, Gazprom Neft’s deputy chairman Vadim Yakovlev told reporters on October 10, according to Russian media. Approvals will also be needed from both companies’ board, he said.
“We expect to close the deal at the end of this year or at the beginning of next year,” Yakovlev said.
Gazprom Neft and Shell agreed to form a partnership at Meretoyakhaneftegaz in June. Meretoyakhaneftegaz holds rights to the Meretoyakhinskoye field, but Gazprom Neft will also transfer control of the Tazovskoye and North-Samburgskoye fields, and the two West-Yubileisky blocks to the subsidiary before its deal with Shell is completed.
Meretoyakhinskoye and North-Samburgskoye contain only oil, but Tazovskoye – the largest of the assets – holds 186bn m3 of gas in addition to 438mn mt of crude. Gazprom Neft is targeting a peak production rate of 2.1mn mt/yr of oil by the early 2020s. It is in talks with its parent company Gazprom on constructing a 50-km gas pipeline to connect Tazovskoye with the Zapolyarnoye field, Russia’s top gas producer.
Zapolyarnoye provides the bulk of its 130bn m3 of annual gas supply to the European market. Development of the deeper horizons of the field was a core part of the strategic alliance formed by Shell and Gazprom in the late 1990s, that was to have focused on gas production in Russia and transport to Europe.