Gazprom’s gas reserves on Russian continental shelf add 768 billion cubic meters in 2018

The Gazprom Board of Directors took note of the information on the Company’s mineral and raw material base.

It was highlighted that Gazprom had the largest amount of explored natural gas reserves in the world, totaling 35.4 trillion cubic meters (А+В1+С1 categories) as of December 31, 2017. Due to the adoption of a new Russian Classification of Reserves and Forecast Resources of Oil and Flammable Gases, Gazprom is currently re-estimating its hydrocarbon reserves and recording them in the state register. These procedures are meant to be completed before the end of 2020.

As part of the program for the development of the mineral and raw material base until 2040, the Company is making effective efforts to replenish the base and prepare hydrocarbon reserves for commercial development, with gas reserve addition rates surpassing its production rates over the past 13 years thanks to geological exploration. In 2017, the Company produced 472.1 billion cubic meters of gas and added 852.9 billion cubic meters to its reserves, setting an absolute record (the reserve replacement ratio was 1.8). The total growth in gas reserves thanks to exploration in the period since 2002, when the program was launched, is 9.2 trillion cubic meters.

For the purposes of long-term gas production, Gazprom is conducting geological exploration in the Nadym-Pur-Taz region, the Yamal Peninsula, the Republic of Sakha (Yakutia) and the Irkutsk Region, as well as offshore in the Arctic and Russia’s Far East.

The Company’s shelf operations are concentrated in the Barents Sea, the Kara Sea, and the Sea of Okhotsk. The number of fields discovered by Gazprom in that area since 1995 is 11, including the Severo-Kamennomysskoye, Kamennomysskoye-Sea and Yuzhno-Kirinskoye fields with their unique reserves. In the course of 2017, two exploratory wells were drilled in those seas, with 3D seismic surveys covering 7,400 square kilometers. In 2018, the above operations resulted in a substantial reserve addition of 768 billion cubic meters of gas (А+В1+С1 categories), including 667 billion cubic meters in the Leningradskoye field and 101 billion cubic meters in the Yuzhno-Kirinskoye field. In 2018–2021, it is planned to complete the construction of eight wells and perform 3D seismic surveys of over 9,000 square kilometers.

In the eastern part of Russia, the Company is actively preparing hydrocarbon reserves for commercial development in order to create new gas production centers. In 2017, Gazprom built two exploratory wells at the Kovyktinskoye field in the Irkutsk Region and started to drill another four, conducting 3D seismic surveys of 2,400 square kilometers. In 2018–2021, it is planned to complete the construction of 20 exploratory wells and conduct 3D seismic surveys of 3,800 square kilometers. In Yakutia, efforts are underway to further explore the Chayandinskoye, Tas-Yuryakhskoye, Verkhnevilyuchanskoye, Sobolokh-Nedzhelinskoye and Srednetyungskoye fields. Last year, an exploratory well was built at the Tas-Yuryakhskoye field. In 2018–2021, 14 wells will be built within Gazprom’s licensed blocks.

A traditional area for gas production – the Nadym-Pur-Taz region – still has great potential in terms of reserve additions. The Company is actively researching the deposits lying both under and above the Cenomanian horizon that is being developed. Experts estimate the resource potential of the above-Cenomanian deposits at Gazprom’s fields in the Yamal-Nenets Autonomous Area to be approximately 4 trillion cubic meters of gas. The Achimov and Jurassic deposits in the region may contain up to 40 trillion cubic meters of gas. The Company is using advanced technologies for drilling and well surveying to develop those formations, as their geological structure is more complicated.

The Management Committee was instructed to carry on with the replenishment of the mineral and raw material base and preparation of hydrocarbon reserves for commercial development in the Unified Gas Supply System’s area of operation, Eastern Siberia, Far East, and on the Russian continental shelf.

The Board of Directors took note of the information on the impact of the Western sanctions on the Gazprom Group in 2017–2018 and on mitigation measures.

In 2017, the Gazprom Group produced 472.1 billion cubic meters of gas, including the Group’s share in the production by the companies investments wherein are classified as joint operations (or 471 billion excluding that share).