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Russia's Gazprom Neft discusses new projects in Iraqi Kurdistan territory

June 01, 2017, 14:27 UTC+3

Gazprom Neft plans to continue creating production capacities despite the agreement reached in Vienna by the OPEC countries

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ST. PETERSBURG, June 1. /TASS/. Gazprom Neft is discussing new projects in Iraqi Kurdistan, Chief Executive Officer of the Russian oil major Alexander Dyukov told reporters at the St. Petersburg International Economic Forum (SPIEF) on Thursday.

"A delegation of Kurdistan autonomous district of Iraq is participating in the forum. We will discuss current status of projects’ implementation. In particular, we are discussing potential new projects in the territory of Iraqi Kurdistan," Dyukov said.

Gazprom Neft plans to continue creating production capacities despite the agreement reached in Vienna by the OPEC countries and countries outside of the cartel on reducing oil production, he added. 

"In any case, we will continue to create capacities that, perhaps, will not be used now. We believe that the demand for oil will grow. When OPEC decides that demand has increased and we can offer the market more oil, we will have capacities that will be able to give us this," he said.

The company’s Deputy CEO for Economics and Finance Alexei Yankevich said earlier that Gazprom Neft, despite agreement between Russia and OPEC to reduce oil production, maintains production plan of 89.2 mln tonnes of hydrocarbons for 2017. "Our production plan totals 89.2 mln tonnes - and we stick to that plan," he said at the time.

The forecast of Russia’s oil producer Gazprom Neft on crude production growth for this year to 89.2 mln tonnes takes into account the extension of the oil output cut agreement between OPEC and non-OPEC nations for nine months. 

"89.2 (mln tonnes) includes and takes into account the deal on the extension of the agreement," he said, adding that the outlook is in line with the agreement.

Gazprom Neft can restore the volume of oil production within a few weeks after the OPEC on oil cuts agreement expires, he said.  "I do not see any problems. We would be able to restore oil production within a few weeks," he said.

Low production cost of Gazprom Neft will allow the company to continue investing in oil production and increase the volume of oil extraction even at a price of $20 per barrel, he said.  "We are absolutely stable, and if the price reaches $20, we will continue to extract oil, invest," he said.

Dyukov added that this is due to the company's low production costs that even at the Prirazlomnoye oilfield on the Arctic shelf reach around $10 per barrel.

Agreement with US Halliburton

Gazprom Neft and with Halliburton (a US multinational corporation, one of the world's largest companies providing services in the oil and gas industry) will sign an agreement on improvement of the quality of oil reserves later today.

"The agreement will be aimed at the joint work of our companies in adapting their high-tech operations, such as drilling multi-layer wells, multi-stage breaks." These technologies are on the market, but it is important to adapt them, "he said.

According to him, the production will be located in Russia, on the oil production sites of Gazprom Neft.

Cooperation with Saudi Aramco

Gazprom Neft is mulling technological cooperation with Saudi Aramco, he went on. 

"We’re considering this cooperation," he said. "Give us some time, we’ll probably make an agreement on this kind of cooperation," CEO added.

According to Dyukov, the issue is only about technological cooperation. "We saw certain technical and research potential (during the visit to Saudi Arabia - TASS)," he said.

Earlier Russia’s Energy Minister Alexander Novak said that Saudi Arabia and Russian companies are discussing a number of joint oil and gas projects.

Russia’s Energy Ministry reported on May 30 that the sides had held talks focusing on cooperation in the area of technological cooperation. Novak noted an increasing interest of Russian oilfield services companies to the market of Saudi Arabia. The Minister also mentioned the creation of joint R&D centers on the development and introduction of technologies in such areas as oil and gas production, oilfield services and transportation of crude hydrocarbons among promising projects.


Erginskoye oil field

Gazprom Neft is still interested in the development of Erginskoye oil field and will apply for participation in the auction, he said. 

"We still have time (to apply - TASS), we said that it is interesting, we will file our application," he said.

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