The document was signed by Vadim Yakovlev, First Deputy CEO, Gazprom Neft, Tomás García Blanco, E&P Executive Managing Director, Repsol, and Cederic Cremers, Shell Country Chair, Russia. Under this memorandum the parties plan to have detailed terms in place by the end of 2019, as well as singing an agreement on establishing the joint venture.

The deal is expected to be closed in 2020 once all necessary corporate and regulatory approvals have been obtained, and all legal preconditions met. The licenses to the Leskinsky and Pukhutsyayakhsky blocks on the Gydan Peninsula will be added to the company’s asset portfolio. Gazprom Neft will have a 50-percent interest in the joint venture once the transaction has closed, with Repsol and Shell each holding 25 percent.

Establishing this joint venture is intended to bring all parties’ resources and skills together in developing an under-researched exploration cluster in the north—east of the Gydan Peninsula. The Leskinsky license block is located in the Taymyrsky district of the Krasnoyarsky Krai, and covers an area of 3,027 square kilometres. Official estimates put D2 recoverable oil reserves at 100 million tonnes of oil equivalent (mtoe).

Adjoining the Leskinsky block, the Pukhutsyayakhsky block, which covers an area of 825 square kilometers, is located in the Tazovsky district of the Yamal-Nenets Autonomous Okrug. According to official estimates, recoverable D1 and D2 oil reserves stand at 35 mtoe.

Both blocks are under-explored and located in considerable distance from oil-and-gas and transport infrastructure.

Vadim Yakovlev, First Deputy CEO, Gazprom Neft, commented: “The proportion of Arctic projects in Gazprom Neft’s portfolio continues to grow, year after year: this is where we are developing new territories, and preparing the basis for future production. While still an under-explored territory, we do, however, understand that Gydan conceals massive resource potential. Joining forces with Repsol and Shell, with whom we have successful experience in collaboration, through our current joint ventures, will allow us to address the very ambitious task of developing new and promising assets successfully.”

Tomás García Blanco, E&P Executive Managing Director, Repsol, added: “Repsol is very pleased to increase its collaboration with Gazprom Neft and Shell, which has been very productive in other projects. We are also excited about exploration in the Gydan Peninsula, a frontier area with a great potential.”

Cederic Cremers, Shell Country Chair, Russia, stressed: “We are excited by the opportunity to work on two new blocks in the extreme and harsh conditions of the north part of west Siberia. This will require best oilfield technologies, best environmental and safety expertise, and best partners. I am confident we have all of them in the Gydan project.”