Novatek has continued to buy up oil and gas assets to maintain production which has fallen over the past two years. The company will receive another site in Gydan in close proximity to already existing fields. The license will cost the manufacturer 2 billion rubles. Last year, the company spent over 18 billion rubles on the purchases of new assets.

Novatek’s structure Novatek-Yurkharovneftegaz won the auction for the South-Leskinsky site in Gydan. According to the company, its resource potential is estimated at 3.5 billion barrels of oil equivalent of hydrocarbons according to the Russian classification. The company will pay 2.041 billion rubles for the license for a period of 27 years. The new site is located in close proximity to the existing assets of Novatek in the Krasnoyarsk region. "The acquisition of the new license site corresponds to the company's strategy to increase the resource base in Yamal and Gydan to increase the production of gas and liquid hydrocarbons," - Novatek explains.

Novatek, which is preparing to launch the third line of the Yamal LNG liquefaction plant and the construction of the second production of Arctic LNG-2, has been systematically buying up operating companies and new sites near its existing assets for the second year. Head of the company Leonid Mikhelson said that new fields were needed to maintain the gas production, the level of which in 2017 decreased by 6.3% to 63.39 billion cubic meters. Last year the company spent 18.6 billion rubles on the purchase of oil and gas assets. The 100%' shares in oil and gas companies Severneft-Urengoy (production is about 0.8 billion cubic meters of gas per year), Evrotek and South-Khadyryakhinskoye, and licenses for geological exploration and production of hydrocarbons at the OSenny subsoil site (through a joint venture with Gazpromneft - Severenergiya) were spent on this.

Already in early 2018, Novatek continued to replenish the resource base, bought from Alrosa 100% of oil and gas companies Geotransgaz and Urengoy gas company for 30.3 billion rubles (reserves, according to Novatek’s assessment, are 436 million barrels of oil equivalent and 650 million barrels of oil equivalent, respectively). In 2017, Geotransgaz produced 1.6 billion cubic meters of gas and 185 thousand tons of gas condensate, the production at the Ust-Yamsoveisky site is not yet conducted. Novatek bought Chernichnoye
from Mangazeya for over 616 million rubles. As of December 31, 2017, the reserves of the site according to the Russian classification "B" amounted to 17.7 billion cubic meters of gas and 7.8 million tons of liquid hydrocarbons.

In March, Novatek-Yurkharovneftegaz won an auction for the Payutsky site in Gydan (one-time payment for the subsoil use was 66 million rubles) with a total resource potential of 354 million barrels of oil equivalent according to the Russian classification, the Nanadyanskoye gas field is within its boundaries. The license is issued for 27 years. In April, Novatek bought two more licenses: for the study of the Palkurtoisky hydrocarbon site (at the end of 2017, the total recoverable resources on the D category of the Russian classification amounted to 278 billion cubic meters of natural gas and about 49 million tons of liquid hydrocarbons) in the Yamal-Nenets Autonomous district, as well as for the Central-Nadoyakhsky site in the Yamal-Nenets autonomous district (recoverable resources are 258 billion cubic meters of natural gas and 144 million tons of liquid hydrocarbons).

Source: Rusmininfo    l    KeyFacts Energy Industry Directory: Rusmininfo