Gazprom Neft to secure Chinese partners at Chonsky project by end-2017
Thursday, Oct 19, 2017
Gazprom Neft is looking to strike a partnership with Chinese investors at the Chonsky fields in Eastern Siberia by the end of the year.

In an interview last week with Reuters’ Russian service, the state oil giant’s deputy CEO Vadim Yakovlev said that unnamed Chinese partners had been offered a 49% stake in a joint venture to manage the project.

The Chonsky project consists of three oilfields – Ignyalinskoye, Timpuchikanskoye and Vakunaiskoye – which straddle the border between the Irkutsk and Sakha regions.

Gazprom Neft’s local subsidiary, Gazpromneft-Ankara, acquired the Chonsky fields in 2008 and began exploration work four years later. To date, it has drilled 14 exploration and appraisal well and shot 2,600 square km of 3D seismic work at the deposits. Gazprom Neft booked the fields’ C1+C2 reserves in mid-2016 at 219.5 million tonnes (1.6 billion barrels) of oil and 300 bcm of natural gas.

Pilot production at the Ignaylinskoye was begun last year.

Gazprom Neft had aimed to start commercial production at the Chonsky fields in 2019, although this target may no longer be feasible. The company has had difficulty securing the foreign investment it needs to develop the deposits.

It teamed up with JOGMEC to explore and develop the Ignyalinskoye field in 2012, but the Japanese firm withdrew from the project three years later, citing the need to focus on its Sakhalin Island operations.

Gazprom Neft was also in talks with South Korean firms over joint work at Vakunaiskoye and Timpuchikanskoye, but a partnership was never formed. In 2015, it signed a memorandum of understanding (MoU) with Shanghai-based energy and finance giant CEFC China Energy to develop all three fields; however, a binding deal was not finalised.

The decision to delay the Chonsky project may have also been tied to Gazprom Neft’s exit in 2016 from talks to buy a stake in Vietnam’s Dung Quat refinery, a potential recipient of oil from the fields.

The Chonsky fields represent Gazprom’s only major oil project in Eastern Siberia, a region dominated by Russia’s largest oil company, Rosneft. They are located just 80 km from the Eastern Siberia-Pacific Ocean (ESPO) pipeline system, which delivers Russian oil to China and the Asia-Pacific region.

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