The new joint venture’s asset portfolio will include the Salysmky-3 and Salymsky-5 license blocks, both located in the Khanty-Mansi Autonomous Okrug, at which the parties plan to begin commercial production of non-traditional oil reserves as early as 2025. The transaction is expected to close in July—August 2020, once all necessary corporate approvals have been secured and all applicable pre-conditions met. Gazprom Neft’s will have a 51% interest in the joint venture, and Zarubezhneft 49%. The new business will provide a forum for both companies to jointly develop technologies for developing non-traditional reserves, and deploy these across the joint venture’s assets.

The Salymsky-3 and Salymsky-5 license blocks are located in the Nefteyugansky district of the Khanty-Mansi Autonomous Okrug, and cover 710 square kilometres in total. So far, more than 300 square kilometres of 3D seismic works have been completed at the Salymsky-3 block, the first exploration and appraisal well has been drilled, and core samples taken. A fifteen-stage hydraulic fracking operation is expected to start shortly. Initial core-sample analysis indicates hydrocarbons to be present at six potentially promising intervals, proving the viability of commercial production at this block. Geological prospecting works are expected to start at the adjacent Salymsky-5 block by the end of 2020. Preliminary prognoses suggest initial reserves in place at both blocks comprising more than 500 million tonnes of oil.

A programme of geological prospecting works is expected to run to 2024, intended to clarify the geological characteristics and full resource potential of both assets. A development plan for both assets will be compiled once prospecting works are complete. Both parties have extensive skills and experience in investigating and developing “hard-to-recover” reserves, something that will stand the joint venture in good stead in optimising the effective development of its Salymsky assets.