Lukoil and Rosneft Sign Agreement on Long-term Cooperation

abarrelfullabarrelfull wrote on 22 Apr 2011 05:28
Tags: lukoil rosneft russia

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Rosneft President Eduard Khudainatov and Lukoil President Vagit Alekperov today signed an agreement for long-term cooperation between their respective companies. Igor Sechin, Russia's Deputy Prime Minister was present during the signing ceremony.

Given the successful development of their mutual cooperation, and with the goal of raising the profitibility of existing projects, Rosneft and Lukoil have agreed to join forces in the following areas:

  • oil exploration & development, development and transportation of hydrocarbons in the license areas of the Nenets Autonomous District;
  • exploration in the areas licensed to Rosneft on Russia’s Arctic shelf and development of fields that are already open, within the framework of current Russian legislation;
  • development of the market for domestic petroleum products, petrochemicals, gas processing and base oils;
  • joint marketing of associated and natural gas from fields in the Bolshekhetskaya and Vankor zones;
  • joint deliveries of petroleum products, liquefied gas and petrochemical products to the distribution and production facilities of both companies;
  • development of solutions for improving production efficiency for petrochemical products, oil and gas, in Russia and abroad;
  • use of existing logistics infrastructure, including transshipping facilities for crude oil, refined pretroleum products and petrochemical products that are for export; and development and execution of transportation infrastructure projects for petroleum products, including the construction of a product pipeline interconnecting with the "Moscow product ring," and the "South” project.

Commenting on the agreement, Rosneft President Eduard Khudainatov said: "It is obvious that under the current fiscal conditions, and with a limited existing infrastructure and growing proportion of reserves that are difficult to extract, we need to expand our cooperation by combining efforts to raise the profitability of our projects."

"We expect that long-term cooperation with Rosneft will help our company gain access to significant new hydrocarbon reserves in the Russian Federation," said Lukoil President Vagit Alekperov.

The parties have agreed to establish joint working groups in the specified areas by 15 May 2011 so that by 1 August they can compile a list of projects, evaluate their effectiveness and develop mutually acceptable mechanisms for cooperation.

Additional Information

Key joint projects of Rosneft and Lukoil:

1. Joint transportation of gas from the Vankor field and the Bolshekhetskaya Depression.

On 12 April 2011, Lukoil and Rosneft signed an agreement, under which Rosneft will independently transport gas from the Vankor field and adjoining license areas to Lukoil’s infrastructure. In turn, LUKOIL will transport gas through its facilities to Gazprom’s gas transportation system. At present, Lukoil and Rosneft are building their own gas pipeline sections and infrastructures.

2. Priazovneft

Rosneft and Lukoil each own a 42.5-percent stake in Priazoneft. The Administration of the Krasnodar Territory owns the remaining 15 percent. Priazovneft is developing the Temryuksko-Akhtarsk license area on the shelf of the Azov Sea. In 2008, the “New” oil field was opened. The field’s recoverable reserves are: Oil: C1 - 0.87 million tonnes; C2 – 2.25 million tonnes; Gas: C1 – 319 million m3; C2 - 820 million m3. Seismic work is currently underway.

3. Caspian Oil Company

Rosneft and Lukoil each own 49.9 percent of the Caspian Oil Company; Gazprom owns the remaining 0.2 percent. In 2008, the West-Rakushechnaya field in the north-Caspian area was opened. In 2010, an assessment well was drilled at the Ukatnaya structure. Open non-industrial deposit.

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