At ADIPEC 2018, a lot of international partnerships were forged but one that has been almost a year-long affair is that between Abu Dhabi and Russian energy bigwigs
May 2018, the Russian giant Gazprom Neft announced the establishment of a joint venture with Mubadala Petroleum to develop oilfields in western Siberia. Gazprom Neft handed over a 49 per cent interest in Gazpromneft-Vostok LLC, operator of 13 fields, to Mubadala Petroleum and RDIF.
Following the completion of this transaction, Gazprom Neft now has a 51 per cent interest in the joint venture, with Mubadala Petroleum and RDIF holding 44 per cent and five per cent stakes, respectively. Gazpromneft-Vostok remains a subsidiary of Gazprom Neft and will continue to operate the fields.
The Gazpromneft-Vostok joint venture represents Mubadala Petroleum’s first investment in the Russian oil and gas sector.
Also during ADIPEC 2018, Gazprom Neft resumed talks with Masdar to focus on R&D for production efficiency and digital transformation.
Speaking exclusively to Oil Review Middle East during the show in Abu Dhabi about Russia's relationship with OPEC, Gazprom Neft’s First DeputyCEO Vadim Yakovlev said that the cooperation will benefit both parties long term and short term, by creating an efficient mechanism to adjust activities upwards and downwards.
In the first half of 2018, Gazprom Neft posted a net income of US$2.5bn, a 50 per cent increase year-on-year. The company plans to continue with its growth strategy and is on track to achieve production of two million bpd from its fields across the globe.
“Mubadala is making significant investments to build infrastructure in the western Siberian fields. Having a partner at this stage allows us to speed up the return on investment from Mubadala and the Russian Direct Investment Fund. These fields are already producing and have the potential for further growth, with geological prospects relating to pre-Jurassic formations. Our partnership will look at developing new technology to locate these formations, find the sweet spots and develop them efficiently.”
However, with OPEC's decision to restrict oil output going forward, Yakovlev added that Gazprom Neft will adjust its production plans by managing the levels of the drilling activity.
Gazprom Neft already owns stakes in profitable concessions such as the Badra oilfield in Iraq, OPEC’s second largest oil producer, and Garmian and Shakal blocks in the Kurdistan Region of Iraq. With Iraq ready to increase its oil output and export capacity next year, Gazprom Neft sees this as an opportunity to look into aligning its business to push for technology strategy in areas such geomodelling, digitalisation and enhancing drilling efficiency.
“We have seen that from Mubadala Petroleum to Saudi Aramco, all parties are interested in technology collaboration that can help them optimise CAPEX and production. Our partnerships are not limited to assets but also involve technological growth.”
Gazprom Neft is also currently working with Saudi Aramco on three areas, including the use of AI technology in geological and hydrodynamic modelling, modelling of thermal processes and drilling technology for depressions.
“In addition to Iraq, we are closely monitoring oil and gas licensing rounds that will open up in the UAE next year and I hope that the partnership with Mubadala Petroleum will give us access to more opportunities and help us achieve our goal to expand our presence in the Middle East region,” Vadim added.
