Gazprom Neft and the Government of the Khanty-Mansiysk Autonomous Okrug-Yugra have signed an agreement on establishing the “Bazhen Technology Centre”

The Bazhen Technology Centre will focus on those advanced skills and technologies available to Gazprom Neft that will form the basis for developing cost-effective methods for developing the Bazhenov Formation. The testing of new technologies and equipment will be located in the Palyanovskaya area of the Krasnoleninskoye field, where the company has been engaged in geological exploration and oil production from non-traditional reserves since 2013. Gazprom Neft’s initiative to establish a technology centre to study of hard-to-recover hydrocarbon reserves received the support of Natalya Komarova, Governor of Khanty-Mansiysk Autonomous District, in 2016. With the support of the Ministry of Energy and the Ministry of Natural Resources of the Russian Federation, Gazprom Neft’s initiative in studying the Bazhenov Formation was given the status of a national project in May 2017.

The Bazhen Technology Centre will become an open industry platform uniting the efforts of oil and gas and oilfield service companies, the scientific community, investors, and the state. All participants, including oil companies, equipment manufacturers and innovative developers, will be able to create and test technologies at the Palyanovskaya site.

Financing of the first stage of the project will be met through Gazprom Neft’s own funds, with additional external investment expected to be forthcoming in the future. In the event that those technologies developed can be implemented successfully, Gazprom Neft’s production from Bazhenov Formation reserves could reach approximately 2.5 million tonnes per year. The Government of the Khanty-Mansiysk Autonomous Okrug intends to attract as many oil and gas companies and scientific institutes as possible to work at the Bazhenov Technology Centre, through the establishment of special conditions for subsoil use, and by granting tax concessions. The economic impact for the regional budget could be as much as RUB27 million by 2025, with the potential to grow to RUB400 billion.

Gazprom Neft CEO Alexander Dyukov commented: “The full-scale development of the Bazhenov Formation will breathe new life into the ‘mature’ fields of Western Siberia. But the effective commercial development of Bazhenov’s reserves today requires technologies and solutions that do not yet exist. Such a challenge can only be overcome through collective efforts, and that is a task for the entire industry. The Bazhenov Technology Centre will make possible the accumulation of cutting-edge ideas, and the implementation of best practices, in developing hard-to-recover oil reserves. The successful implementation of this national project will ensure the country’s technological independence in the exploration and development of unconventional hydrocarbon reserves, in the future.”

Natalya Komarova, Governor of the Khanty-Mansiysk Autonomous Okrug, added: “We are keen to turn over a new leaf in developing Russian technologies, in conjunction with Gazprom Neft, having signed this agreement with the company to implement the national project on ‘Developing Domestic Technologies and High-technology Equipment to Develop Reserves at the Bazhenov Formation’, and in opening the Bazhenov Technology Centre, in Yugra. It is important that this new entity becomes a place for combining the potential of both research and production. In which context, it is essential that the results and outcomes of research are available to everyone involved in the national project, including leading federal institutions, as well as service companies and upstream organisations. Working on the basis of mutual self-interest will give further stimulus to fundamental scientific works in the effective development of hard-to-recover reserves, and will avoid duplicate investigations, excessive spending, and long lead-times in the practical adoption of innovations.”