Gazprom Neft reduced cost of Bazhenov oil production by 20% in 2020

AK&M 19 February 2021 13:33

In 2020, Gazprom Neft reduced the cost of non-conventional oil production by 20% year-on-year to RUB 13,000 per tonne. The cost of production is expected to have been further reduced to RUB 8,500 per tonne by the end of 2021, which will enable the company to start commercial development of the Bazhenov formation at fields with ready-to-use infrastructure, the company informed.

In 2020, the Gazpromneft-Technology Partnerships Center for Industrial Integration (previously the Bazhen Technology Center)  increased oil production from the Bazhenov formation by 78% year-on-year to 100,000 tonnes.

In 2021, Gazprom Neft plans to complete the testing of a package of solutions for cost-effective production of Bazhenov oil. Creation of a commercially viable industrial technology for non-conventional oil production will make it possible to produce up to 1 million tonnes of Bazhenov oil annually by 2025.

Gazprom Neft PJSC (tax number: 5504036333) and its subsidiaries own 61 licenses for the prospecting and development of oil fields. The proven oil reserves in the company's fields exceed 4.5 billion barrels. The company's largest shareholder is Gazprom Group.

IFRS net profit attributable to the shareholders of Gazprom Neft PJSC for 2019 increased by 6.2% YoY to reach RUB 400.201 billion versus RUB 376.667 billion a year earlier. Revenue was RUB 2.485 trillion decreasing by 0.2% YoY from RUB 2.489 trillion). Adjusted EBITDA (earnings before interest, tax, depreciation and amortization) stayed flat YoY at RUB 795.1 billion, despite negative price dynamics and adverse market trends.