Rosneft Seals Deal On Field Acquisitions In Siberia

Exclusive-Russia's Rosneft Aims for Big Boost in Oil Exports to China
Russia’s Rosneft has closed the purchase of a cluster of fields in Western Siberia for 40 billion rubles (US$700 million).

In a statement on April 11, the state-owned oil giant said it had bought 100% of Kondaneft, the owner of the Konda, West-Erginskoye, Chaprovskoye and New-Endyrskoye deposits in Khanty Mansiysk Autonomous Okrug.

Rosneft did not name the previous owner of Kondaneft. However, the Independent Petroleum Co. (NNK), a junior producer headed by former Rosneft chief Eduard Khudainatov, lists the fields as its assets on its website.

Rosneft noted that the fields held 157 million tonnes (1.15 billion barrels) of oil reserves, based on estimates by industry consultants DeGolyer and MacNaughton. “The company will take measures to quickly commission the Kondaneft oilfields in 2017, which will allow for a significant growth in Rosneft’s consolidated output,” it said.

Rosneft extracted 210 million tonnes (4.20 million bpd) of liquids in 2016, up 3.6% on the year and accounting for 40% of Russian output. Growth largely came on the back of its acquisition of mid-sized producer Bashneft in October last year as well as output gains in Western Siberia.

Yuganskneftegaz, its largest upstream unit which operates in Khanty-Mansiysk, saw production rise 2% to 63.6 million tonnes (1.27 million bpd).

Rosneft noted that this week’s transaction had been cleared by Russia’s Federal Anti-Monopoly Service (FAS).

Kondaneft’s assets are situated some 100 km from the Ob field, one of Rosneft’s core deposits. They are also adjacent to the Erginskoye field, the largest unassigned large oil deposit in Western Siberia. Russia’s Federal Agency for Subsoil Use (Rosnedra) recently delayed an auction for rights to Erginskoye. Rosneft is expected to place a bid for the deposit, as are Russian natural gas giant Gazprom and the country’s largest independent oil producer, LUKOIL.

NNK holds dozens of licences in Central Russia, the Volga-Urals region, Timan-Pechora, Siberia and Kazakhstan. Together, these assets yielded 2.31 million tonnes (46,000 bpd) of oil in 2016, up 1% on the year. Khudaintov held various high-ranking posts, including CEO, at Rosneft between 2009 and 2012. In February this year, the executive denied rumours he was looking to divest from NNK.