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Gazprom Neft boosts oil reserves in 2014

02nd February 2015

Gazprom Neft’s total proved and probable (2P) hydrocarbon reserves (including the company’s share in joint ventures) by international SPE-PRMS (Petroleum Resources Management System) standards amounted to 2.55 billion tonnes of oil equivalent by the end of 2014 – representing an 11.5 per cent or 263 million tonnes increase over 2013’s figures

Gazprom Neft’s total proved and probable (2P) hydrocarbon reserves (including the company’s share in joint ventures) by international SPE-PRMS (Petroleum Resources Management System) standards amounted to 2.55 billion tonnes of oil equivalent by the end of 2014 – representing an 11.5 per cent or 263 million tonnes increase over 2013’s figures
The main reasons for the large resource growth in 2014 was geological exploration work, carried out by both Gazprom Neft and its joint ventures, as well as the increased share in Gazprom Neft’s ownership of SeverEnergiya, Northgas and Gazprom Neft Shelf

Gazprom Neft’s production volumes in 2014 (66 million tonnes of oil equivalent BOE) were compensated almost five fold by new reserves (497 per cent). The oil reserves of category 2P reached 1.82 billion tonnes, having increased by 6.7 per cent per annum or 115 million tonnes, BOE.

At the end of 2014, Gazprom Neft's proved hydrocarbons reserves (1P) were estimated at 1.44 billion tonnes BOE – an increase of 7.1 per cent compared with the level at the end of 2013. 1P reserves replacement level exceeded the production by 2.4 times (244 per cent). 1P reserves increased by 2.2 per cent – up to 981.5 million tonnes.

Gazprom Neft’s current proved hydrocarbon reserves-to-production ratio exceeds 20 years, according to SPE-PRMS.

The more conservative SEC standards estimate the company’s total hydrocarbon reserves at 1.23 billion tonnes BOE (an increase in 2014 by 8.7 per cent) and oil reserves at 857.6 million tonnes (a 3.4 per cent increase).

The main reasons for the large resource growth in 2014 was geological exploration work, carried out by both Gazprom Neft and its joint ventures, as well as the increased share in Gazprom Neft’s ownership of SeverEnergiya, Northgas and Gazprom Neft Shelf.

Gazprom Neft’s prospecting and exploration drilling is at a high level and following the results of 2014 saw an 81 per cent success rate. Last year 26 hydrocarbon deposits were discovered including 21 oil and 5 gas deposits.

“Gazprom Neft’s strategy provides for an increase in the company’s production and consequently reserves are maintained at a high level,” said Alexander Dyukov, chairman of the Gazprom Neft management board. “Each year we will not only compensate for production but also increase our resource base. Gazprom Neft is confident of achieving the set goal by demonstrating high year on year growth of its reserves."

SPE-PRMS is the most commonly used hydrocarbon reserve evaluation system. Developed by the Society of Petroleum Engineers (SPE), the system takes into account not only the potential of finding oil and gas in the field, but also the economics of their extraction. Reserves are measured in three categories: proved, probable and possible (3P).

Another widely used system evaluating reserves is the classification developed by the US Securities and Exchange Commission (SEC). This valuation is more conservative than the SPE-PRMS standards.

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