Rosneft and ITERA Oil and Gas Company have signed a strategic cooperation agreement for joint exploration and development of gas deposits in Russia.
The agreement signed by Rosneft President Eduard Khudainatov and ITERA Oil and Gas Company Chairman of the Board of Directors Igor Makarov envisages the possibility of establishing a joint venture. The joint venture would comprise ITERA Group’s gas assets – 49 percent of Sibneftegaz, 49 percent of Purgaz, 67% of Uralsevergaz and several other assets – and Rosneft-owned deposits in the Kynsko-Chaselsk group. It is envisaged that other Rosneft gas assets would be transferred to the joint venture in the future. The company will become Rosneft and ITERA Group’s gas extraction and sales operator.
The joint venture’s initial combined recoverable liquid hydrocarbon and natural gas reserves will total approximately 60 million tonnes and approximately 1.2 trillion cubic metres respectively. In the coming years the company could extract and sell over 40 billion cubic metres of its own gas per year.
Rosneft and ITERA have also agreed to pursue joint efforts to expand their gas business through the acquisition of new gas producing assets.
“The joint venture provides a strong foundation for successful implementation of the shareholders’ gas strategy and serves as an effective tool for monetizing gas produced at Rosneft and ITERA’s deposits. Joint projects to be developed under the agreement will be a substantial step forward in implementing Rosneft’s strategic programme to increase the share of gas reserves under development, which will help increase the Company's capitalization and create additional value for shareholders. We are looking forward to working effectively with the management of the ITERA Group to manage this joint asset in extracting, preparing, transporting and selling gas,” said Rosneft President Eduard Khudainatov.
Commenting on the agreements, ITERA Oil and Gas Company Chairman of the Board of Directors Igor Makarov said: “The establishment of this joint venture with Rosneft is an important step in ITERA Group's further development. It will allow both of the companies to combine their potentials and use their strategic advantages most effectively. We expect the joint venture to become the flagship on the Russian independent gas producer market.”

Background:

Rosneft is a Russian oil major and one of the world’s top publicly traded oil and gas companies. The company is primarily engaged in the exploration and production of oil and gas and the production and sale of petroleum products and petrochemicals.
Kynsko-Chaselsk is a license block in the Krasnoselkupsk region of the Yamalo-Nenets Autonomous District. The Kynsko-Chaselsk license block comprises six deposits: Kynskoye, Fakhirovskoye, Novo-Chaselskoye, Naumovskoye, Ust-Chaselskoye and Verkhne-Chaselskoye. The Kynsk-Chaselsk group’s total reserves stand at 40.2 million tonnes of oil and 284.2 billion cubic metres of gas.
ITERA Oil and Gas Company is one of the largest independent producers and sellers of natural gas in Russia. ITERA has been developing its own gas production in the Yamalo-Nenets Autonomous District since 1998. The company has invested over $2 billion in the gas extraction sector. ITERA was the first private company to put gas deposits in the north of Russia into service. Approximately 250 billion cubic metres of gas have been extracted at ITERA deposits.
Purgaz (49% owned by ITERA Oil and Gas Company and 51% by Gazprom) develops the Gubinsky gas condensate field in the Yamalo-Nenets Autonomous District. Current gas extraction levels stand at 15 billion cubic metres of gas a year. Proven gas reserves total over 216 billion cubic metres. There are 95 production wells at the field.
Sibneftegaz (49% owned by ITERA Oil and Gas Company and 51% by Novatek) holds licenses to develop the Beregovoye, Pyreynoye, Khadyryakhinskoye and Zapadno-Zapolyarnoye deposits in the Yamalo-Nenets Autonomous District. Current gas extraction levels stand at 10.3 billion cubic metres of gas a year. Proven gas reserves total 490 billion cubic metres. There are 75 production wells at the field.
Uralsevergaz (67% owned by ITERA Oil and Gas Company and 30% by the Sverdlovsk region government) is a key supplier of natural gas to the Sverdlovsk region.