Exploration and Production of Crude Oil and Gas

Total production by OJSC Gazprom Neft rose by 4.3% in 2013, to 62.26 million tonnes of oil equivalent. The Company ranks first in Russia in terms of production growth. Oil-equivalent production growth has been achieved owing to the production assets, purchased recently in 2011-2012 (CJSC Gazprom Neft Orenburg, LLC Technology Research Centre, OJSC Yuzhuralneftegaz, and LLC Zhivoy Istok) and highly efficient interventions at the Western Siberian fields.

The Company is rapidly developing its gas business, focused on commercialising associated and natural gas reserves at oil fields and realising the maximum value of gas. Total natural gas produced by subsidiaries and affiliates in 2013 was 5.96 billion cubic metres, including 5.91 billion cubic metres of marketable gas. Total gas production by 100% subsidiaries and affiliates grew from 9.3bn in 2012, to 11.9 bn cubic metres. This growth was due to the implementation of both the Muravlenkovskoye natural gas production project and APG utilisation projects. A compressor station went into operation in the southern licence area of the Priobskoye field in the middle of 2013. As part of the APG utilisation improvement project at the Yuzhno-Priobskaya area, the construction of a new gas processing plant (GPP) with an annual processing capacity of 900 million cubic metres based at the existing Yuzhno- Priobskaya compressor station was approved. The Noyabrsky Integrated Project, which completed its initial phase in October 2012, also significantly contributed to progress.

The Company has developed 2014-2016 programme for associated petroleum gas utilisation by subsidiaries and affiliates which was approved in 2013. The programme includes a project portfolio to expand the The mixture of various gaseous hydrocarbons dissolved in crude oil and emitted during its production.APG utilization capacities in Orenburg, Tomsk, and the Muravlenko region.

Strategic achievements in 2013 included the start of oil production at the Prirazlomnoye field (the first tanker shipment took part early in 2014, and at least 300,000 tonnes of oil production is planned, with a potential production level of about 6 million tonnes) and the organisation of winter transportation of oil from the Novoportovskoye and East-Messoyakhskoye fields, as well as an increase in the share of the SeverEnergia project. As part of a strategic goal to create growth centres at non-conventional reserves, a JV was established with Shell, and the first commercial volumes were obtained from the Bazhenov suite in the Palianovskaya well area of the Krasnoleninskoye field in 2013.

The main drivers of growth in the Company’s resource base in 2013 included the results of a geological survey. The Company’s subsidiaries achieved a high level of exploration drilling, with a success rate of 75% at the end of the past year. In the reporting year, the East Myginskoe field was discovered in the Tomsk Region, along with another 31 oil deposits and two gas deposits.

In 2013, the Company acquired two new licences in Russia, for the Yuzhno-Pudinskiy licence area and the Dolginskoye field. In Iraqi Kurdistan, Gazprom Neft expanded its presence by taking part in a new geological survey project, Halabja.

Oil production, mn t

Source: Company data