Today, in the presence of Dmitry Medvedev, First Deputy Chairman of the Russian Federation, Chairman of the Gazprom Board of Directors and Frank-Walter Steinmeier, Minister of Foreing Affairs of Germany, the Gazprom Headquarters has hosted a ceremony dedicated to the commercial launch of the Yuzhno-Russkoye oil and gas condensate field.

“First of all,  I want to thank all people who contributed to the industrial commisioning of the Yuzhno-Russkoye field, while fostering the development of Russia’s North. The Yuzhno-Russkoye field is an example of efficient Russian-German cooperation. It fulffils the general contribution of both parties to provision of stable energy security in Europe, prosperity of the whole continent. Undoubtedly, share swap between Gazprom and BASF will increase the competitiveness of the companies and strenthen their positions on the global markets. Russia is open for serious business projects, bold initiatives as well as mutually beneficial cooperation, ” said Dmitry Medvedev.

“Commissioning of the Yuzhno-Russkoye field is one of the momentous events of 2007 for Gazprom. It is a bright example of the Company’s consistent execution of the production capacities addition policy and establishment of strong foundation in the aim of providing stable and secure gas supplies to the internal and external markets. The Yuzhno-Russkoye field start up is an example of successful implementation of the new cooperation principles between Gazprom and leading world energy giants. The project execution based on asset swap and on development of the whole chain from production to the final consumer will enable to enhance Gazprom positions in the gas distribution of Germany and strengthen our company as a global player on the energy market,” said Alexey Miller.

“It is a significant day for BASF and Wintershall. We feel our involvement in developing relationship between Russia and Germany, we contribute to intensive dialog between the counties. During 40 years Russia supplies gas to Europe, and there has not been a single day when the obligations were not fulfilled. We have been witnessing it for 20 years, during which BASF worked with Gazprom as a partner in distributing gas. Together we have achieved a lot, but today we have got an opportunity not only to purchase gas, but also do produce gas together with our partner. Thanks to this step, marked as the Yuzhno-Russkoye gas field commissioning we opened new prospects and opportunities to further joint work along the added-value chain development,” said Eggert Voscherau, Vice Chairman of the Board of Executive Directors of BASF.

Reference:

The Yuzhno-Russkoye gas condensate field is located in the Krasnoselkupsky region of the Yamal-Nenets Autonomous Okrug.

The Yuzhno-Russkoye gas condensate field reserves are as follows: 825.2 bcm of gas ABC1 category, 208.9 bcm of gas C2 category, 5.7 mln tons of oil.

Geological survey at the field continues. Work is underway to increase the number of existing wells and to develop infrastructure. The field start-up facility was brought online in October 2007.

In the 4Q of 2007 it is planned to produce 1.4 bcm of gas at the field. The field will reach a 25 bcm designed capacity in 2009.

In 2007 Gazprom and BASF AG signed an Agreement on Share Swap. According to the Agreement, Gazprom will increase its stake in the authorized capital of Wingas GmbH up to 50 per cent minus one share. In its turn, BASF AG acquired a 25 per cent stake minus one voting share and one share without voting rights, which is an equivalent of a 10 per cent stake in the project’s economy.

At the moment of the share swap deal closing stipulated by the agreement, the Gazprom Group will also purchase a 49 per cent stake in the authorized capital of Wintershall AG (license holder to develop and produce hydrocarbons in the frames of the concessional agreements in Libya.