Geological Surveying

Geological survey - Geological surveying for exploration purposes

Over the reporting period, 18 exploration and appraisal wells were completed at licence blocks belonging to Gazprom Neft and its fully controlled subsidiaries. 12 wells have shown commercial hydrocarbon flows. Exploration and appraisal drilling footage in 2013 was 83,009 metres, with success rate of 75%, yielding 381 tonnes of hydrocarbons per linear metre of drilling and a unit cost of the increase in category C1 reserves of 351 RUB/TOE.

All prospecting and exploration drilling carried out during the reporting period, including total distance drilled in wells, which have been fully drilled or are in the process of being drilled, but will be completed in the next reporting periodExploration drilling and follow-up exploration during 2013 led to the discovery of the Vostochno-Myginskoe field, with 2.8 million tonnes of Category С1 represents reserves of oil and gas proven to exist in standalone wells, with favourable industrial and geological data for other wells. Category С2 represents reserves of oil and gas, the existence of which is suggested by geological and geophysical information within known gas-producing areas. Reserves of category С2 are preliminary estimates that are used to plan detailed survey work at specific fieldsC1+C2 oil reserves. There were 20 discoveries of new oil deposits and one gas deposit discovery, mostly at the Yety-Purovskoye (7) and Vyngapurskoye (2) fields, with recoverable C1 oil reserves of 4.0 million tonnes, and 2.6 million tonnes of C2 reserves. Gazprom Neft increased C1 recoverable oil reserves by 4.6 million tonnes in the Tsarichansky licence area, Orenburg Region.

EXPLORATION DRILLING AND DISCOVERIES

In 2013, 19 out of the 66 geological targets tested yielded commercial flows of oil, condensate and gas; 22 yielded non-commercial flows of oil and gas, and 25 targets yielded no flows.

3D seismic survey work during the reporting period in Gazprom Neft’s licence areas, and those of its subsidiaries, totalled 4,650 km2.

The investment made in geological surveying by Gazprom Neft and its subsidiaries amounted to RUB 7.43 billion in 2013 — an increase of 132% compared to total investments in 2012.

Companies and projects in which Gazprom Neft has an interest (OJSC NGK Slavneft, OJSC Tomskneft VNK, Salym Petroleum Development, LLC Arcticgaz, CJSC Messoyakhaneftegaz, Badra, Junin, and Kurdistan) together completed the construction of 29 exploration wells in 2013, with total drilling amounting to 75,500 running metres. Category C1 raw hydrocarbon reserves increased by 38.5 million tonnes. 11 new oil deposits — seven of which were at the Taylakovskoye field — and one gas deposit were discovered.

During the reporting period, seismic surveys were completed in the licence areas of the above companies as follows: Seismic exploration3D — 3,496 km2 and Seismic exploration2D — 345 running km.

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. This is now the third licence area in this country where a geological survey has been carried out.

In 2013, All companies of the Group that comprise JSC Gazprom Neft (the parent company) and its subsidiariesGazprom Neft Group’s resource potential increased by 7.1% — that is, 192.5 million tonnes of oil equivalent, including 137.9 million tonnes of oil equivalent. This was due to the increase in the Group’s share of SeverEnergia. These increases fully offset annual production. Following the results of geological survey work, the increase in reserves totalled 89.3 million tonnes of oil equivalent and 23.9 million tonnes of oil equivalent was due to reserve recalculation. The Yuzhno-Pudinskiy licence area was also acquired, with C1 reserves amounting to 2.6 million tonnes of oil equivalent. The 0.9 million tonnes of oil equivalent increase in the Group’s resource base was due to the acquisition of a Dolginskoye field licence. The absolute increase, net of the share increase in SeverEnergia, totalled 54.6 million tonnes of oil equivalent. Gazprom Neft Group resource base recovery amounted to 188%.

An integrated geological survey programme was scoped for the Gazprom Neft Group in 2014 and is now being implemented. The total planned investment is RUB 35 billion, which is one-third higher than in the previous year.