Gazprom & LUKOIL Sign Master Agreement to Develop Two Fields

Alexey Miller, Chairman of the Gazprom Management Committee, and Vagit Alekperov, President of LUKOIL, signed the Master Agreement on the terms of the development of the Vaneyvisskoye and Layavozhskoye subsurface areas in the Nenets Autonomous Area.

The signing ceremony was also attended by Yury Bezdudny, Governor of the Nenets Autonomous Area.

The document, which builds on the Agreement signed at the St. Petersburg International Economic Forum 2018, outlines the preparations required to commence hydrocarbon production at the two fields.

Among other things, the document sets out the procedure for creating a joint venture to execute the project. The venture will be established by the subsidiaries of Gazprom and LUKOIL: Gazprom Dobycha Krasnodar and LUKOIL-Komi. The project company will receive the license for the fields.

During the preparatory stage, the joint venture will, inter alia, carry out design and survey works and draw up design documentation for the pre-development of the fields and the creation of infrastructure for hydrocarbon treatment and delivery up to LUKOIL's oil receiving facility and the entry point to Gazprom's gas transmission system. In addition, potential contractors and equipment suppliers will be selected, and proposals will be developed with regard to the contract strategy and the terms of financing for the project.

The close proximity of these fields to LUKOIL's operational production site will generate additional synergies in the implementation of the project and will minimize the amount of infrastructure to be built.