At today’s meeting Gazprom’s Management Committee examined paramount measures to be taken on developing the Yamal fields.

The Management Committee ordered to keep working on the “Substantiation of Investments in the Development of the Bovanenkovskoye Field and Gas Transportation System on the Yamal Peninsula”, to organize public expertise of the paper and to submit the for approval in December 2004 in the determined order.

Allocation of investments for the Bovanenkovskoye field development will allow to optimize expenses and find the most economically attractive option of the field development.

At the same time, the Management Committee pointed out that, in order to bring the Bovanenkovskoye field on stream in 2008 under the licensing agreement, it is necessary to start preparatory works at the field in 2004. That’s why the paper “Paramount Measures on the Bovanenkovskoye Field Development and Gas Transportation System Construction for 2004-2005” have to be prepared by the yearend. In addition to the on-site works, the measures include scientific research, feasibility study and expertise. The resources necessary for developing the Bovanenkovskoye field are envisaged for in Gazprom’s 2004 Investment Program.

Reference

On January 14, 2002, Gazprom’s Management Committee determined the
Yamal peninsula as the region of the Company’s strategic interests and the main hydrocarbon development province up to 2010 and beyond. The commercial development of the Yamal fields will allow to build-up annual gas production up to 250 bcm. At the same time, Gazprom plans to increase gas production up to 560 bcm in 2010 and 580-590 bcm by 2020.

Proved gas, gas condensate and oil reserves of the Yamal peninsula (11 gas and 15 oil and gas condensate fields) account for 10.4 tcm, 228.3 million tons and 291.8 million tons, respectively. The combined reserves of the Yamal’s largest fields – Bovanenkovskoye, Kharasaveyskoye and Novoportovskoye – are estimated at 5.8 tcm of gas and 100 million tons of condensate. Nadymgazprom, a 100% Gazprom’s subsidiary, holds the license on developing these fields.

Under the orders of Russia’s President and Prime-Minister, Gazprom, jointly with the Administration of the Yamal-Nenets Autonomous Area, elaborated the Program on Complex Commercial Development of the Yamal Peninsula and Offshore Areas. The Program aims to increase transparency and efficiency of investments and to improve taxation climate and legislature for creating necessary conditions for the Yamal peninsula development. At present, Russia’s Energy Ministry coordinates the Program implementation.

The Bovanenkovskoye field on the Yamal peninsula development is of the first priority. On September 29, 2003, Gazprom’s Management Committee Chairman, Alexey Miller, signed an agreement with VNIPIgazdobycha on elaborating the “Substantiation of Investments in the Development of the Bovanenkovskoye Field and Gas Transportation System on the Yamal Peninsula”.

According the agreement, the companies should substantiate the order of the facilities’ introduction and gas production volumes, determine gas transmission general routes and elaborate a scheme of gas mains construction, taking into account of Gazprom and independent producers’ gas production in the Nadym-Pur-Taz region.

In addition, the companies will analyze the existing infrastructure, determine major facilities to be built, and will allocate investments on a year-by-year basis, taking into consideration further development of the Kharasaveyskoye field on the Yamal peninsula.

The parties will also choose the optimal technological gas transportation scheme based on new technical solutions allowing to reduce investments and operational costs. These solutions include the implementation of unmanned, high efficient and eco-friendly technologies and of a shift method for construction and maintenance.

DIVISION OF RELATIONS WITH MASS MEDIA