Annual
report
2013
Rosneft
19

EXPLORATION AND PRODUCTION

Rosneft Oil Company’s strategic E&P goal onshore is maintaining production and fully tapping the potential of brownfields, prudent execution of greenfield projects to ensure a sustainable production profile, maximum hydrocarbon recovery factor, and economic development of unconventional and challenging reservoirs.

Vankor oilfield

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PRODUCTION IN KEY REGIONS OF COMPANY OPERATIONS IN RUSSIA

West Siberia

Khanty-Mansi Autonomous District – Yugra (KhMAO – Yugra)

The Khanty-Mansi Autonomous District is the main region in which Rosneft is present where major producing assets operate, such as LLC RN-Yuganskneftegaz and OJSC Samotlorneftegaz. It is there that one of Rosneft’s largest fields, Priobskoye, is located, accounting for 13% of its total production.

RN-Yuganskneftegaz LLC

2 BILLIONTH TON OF OIL PRODUCED BY RN-YUGANSKNEFTEGAZ LLC ON 3 October, 2013

In 2013, RN-Yuganskneftegaz produced 66.2 mmt, which is 26% of the total KhMAO-Yugra production and 13% of the total Russian Federation production. Gas production was 3.8bcm. The company has been maintaining stable production levels in excess of 65 mmt per year over the past 6 years.

Credit for such high operating performance goes to efficient handling of base production well stock and a large scope and the high efficiency of development drilling.

In 2013, 964 new wells were commissioned, incl. 38 horizontal multi-fracked wells. Large-scale implementation of these technologies significantly expands the company’s potential to bring in tight reserves.

OJSC Samotlorneftegaz

2.7 BILLION TONS OF OIL HAVE BEEN PRODUCED AT SAMOTLOR SINCE THE BEGINNING OF ITS DEVELOPMENT

The Samotlor field is one of the Company’s strategic assets. Since the beginning of its development in 1969, 2.7 bln t of oil has been produced.

The field is more than 70% depleted. Most of its residual reserves are hard-to-recover and are concentrated in the АВ1-2 Ryabchik formation.

Two license blocks are being produced. In 2013, the Company produced 22.0 mmt of oil at Samotlor and 4.3bcm of gas.

The key success drivers are:

  • Stabilization of base production, reduction of the decline rate by improving the quality of well stock and reservoir management;
  • Scaling up the multi-stage hydraulic fracturing and sidetracking program (113 wells/sidetracks), which in 2013, brought about 243 kt of incremental oil production.

West Siberia brownfield production stabilization

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OJSC Samaraneftegaz

OJSC Samaraneftegaz

South of Tyumen Region

Uvat group of fields

LLC RN-Uvatneftegaz is the operator of the Uvat project which is essentially a group of 14 license areas, with 12 of these being located in the southern Tyumen Region, over 400 km from the City of Tyumen, two in the Khanty-Mansi Autonomous District – Yugra. Total project area is 26.6 thousand square kilometers.

The Uvat project produced its first oil in 2007 on the Urnenskoe and Ust-Tegusskoe fields, the largest ones of those discovered by geologists in Uvat.

At present, production is ongoing at seven fields, Kalchinskoe, Yuzhno-Petyegskoe, Urnenskoye, Ust-Tegusskoye, Tyamkinskoe, Severo-Kachkarskoe, and Radonezhskoe. In 2013, two new fields were discovered, Severo-Keumskoe, and Kirilkinskoe.

In 2013, 8,847.6 thousand tons of oil was produced, up 26% year-on-year. Average well flow amounted to 59.7 tons/day in 2013.

The primary source of growth were 139 newly drilled wells, including 16 horizontal wells with aggregate production of 1,867.4 thousand tons. These wells feature high starting debits, above 100 tons/day.

Actual incremental oil production in 2013 brought by 157 well interventions amounted to 2,035.7 thousand tons.

Volga-Urals Region

Samara Region

2.9% PRODUCITON GROWTH IN OJSC SAMARANEFTEGAZ FIELDS

In 2013, Samaraneftegaz fields produced over 11.0 mln t of oil and 0.5 bcm of gas. The reporting period shows a 2.9% increase in oil production, 409 well interventions delivering 1.5 mmt of incremental production, 46 new wells commissioned with an average flow rate of 65.3 t/day. The average flow rate of the newly commissioned wells is higher than the 2012 level, despite the general trend toward deteriorating quality of reserves being drilled in mature regions. In addition to that, the fracking program for recompleted wells has been expanded. In 2013, 70 wells were commissioned vs. 44 in 2012; also, there were 172 recompletions for commingled production vs. 157 in 2012.

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CJSC Vankorneft

CJSC Vankorneft

70 MILLION TONS OF OIL PRODUCED AT VANKOR FIELD SINCE THE BEGINNING OF ITS COMMERCIAL DEVELOPMENT ON 21 AUGUST 2009

Vankor field at the center of an emerging oil and gas province of international significance

Vankor field is one of the five largest global discoveries over the past 20 years. It accounts for 4% of Russia’s total oil production.

In 2013, Vankor oil production grew by 17%, year-on-year, and amounted to 21.4 mln t.

In 4Q, 2013, the Company reached in Vankor a historical peak production rate of 59.3 kt/day. 105 new wells were commissioned with the average flow rate of 180 t/day. The Company continued its program of improving associated gas utilization and in 4Q, 2013 began gas injection as a method of enhancing oil recovery.

In November, 2013, CJSC Vankorneft was chosen as the operator of the region’s greenfields, Suzunskoye, Tagulskoye, and Lodochnoye, and was given the task of developing the Vankor cluster with the total production potential of 50 mmt per annum.

20 MILLIONTH TON OF OIL PRODUCED AT VERKHNECHONSKOYE OIL FIELD IN JULY 2013

The Suzunskoye, Tagulskoye, and Lodochnoye fields being located in close proximity to Vankor will significantly boost their development efficiency, which, in particular, means:

  • sharing of oil transportation capacities
  • optimization of equipment and personnel delivery logistics
  • sharing of power capacities (creation of a single power hub)
  • mobilization of drilling contractors
  • joint field infrastructure and operation management

The total synergy effect from creating the Vankor cluster is estimated at $ 1.5 bln.

In 2014, Vankorneft will continue preparation of the Suzunskoye, Tagulskoye, and Lodochnoye fields for commercial operation. Development drilling, surface facility construction, and drilling of one exploration well are planned to begin in Suzunskoye. Two exploration wells will be tested in the Tagul license block, and drilling on two exploration wells will begin in the Lodochnoye field. The Company will continue looking for new hydrocarbon reserves in the nearby blocks. The Vankor cluster fields are planned to start being put on stream in 2017.

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Verkhnechonskoe field

Verkhnechonskoe field

Orenburg Region

In 2013, the Orenburg assets (OJSC Orenburgneft and Buguruslanneft LLC) produced 16.1 mmt of oil and 2.2 bcm of gas. Comprehensive interventions aimed at reducing base production decline rates reversed the trend toward production decline due to depletion and high watercut which began in 2011.

112 new wells were commissioned with an average flow rate of 66.0 t/day. Drilling scope and efficiency were maintained at the 2012 level despite more wells drilled on reservoir edges with poorer geological properties.

Pilot programs began testing multi-stage acid treatments of horizontal wells in the Pronkinskoye field.

On top of that, higher incremental production was achieved by sidetracking and hydraulic fracturing in recompleted wells due to a good selection of candidate wells.

East Siberia

Verkhnechonskoye Field

Verkhnechnskoye field (VCNG) is the second largest field in East Siberia (second to Vankor). Commercial production from this field in the Irkutsk Region began in October 2008. In 2013, it produced 6.5 mln t of oil.

The field is being drilled with high-tech horizontal wells ensuring high flow rates. In 2013, 56 wells were commissioned after drilling, with 131 t/day of average incremental production (1.8% flow rate increase, year-on-year) resulting in 994 kt of incremental production, overall.

Sergei Yeroschenko, Irkutsk Region Governor, when visiting the VCNG field noted that OJSC Verkhnechnskneftegaz (VCNG, field Operator) was a positive example for enterprises operating in the region, both from the perspective of its corporate culture and commitments under socio-economic cooperation agreements with the regional government.

Republic of Sakha (Yakutia)

Srednebotuobinskoye Field

LLC Taas-Yuriakh Neftegazodobycha owns licenses for the development of Tsentralniy and Kurungskiy blocks of the Srednebotuobinskoye (SB) oil, gas and condensate field. The С1+С2 reserves of the blocks are estimated at 133.7 mmt of oil and 154.8 bcm of gas. In terms of the reserve size, the field belongs to subsoil blocks of the federal level and is one of the largest in East Siberia.

SB was discovered in 1970. Until 2013, it had been operated in pilot production mode. On 11 October, 2013, stock-tank oil began to be pumped via own 169 km oil pipeline for custody transfer at the tie-in point to Transneft’s East Siberia-Pacific Ocean (ESPO) pipeline system (near the town of Lensk).

2013 oil production was 216.8 kt, with the stock of active wells reaching 29 wells by year end.