Shell has left the joint venture with Gazprom Neft in Gidan

The British-Dutch oil and gas company Royal Dutch Shell has withdrawn from the authorized capital of the joint venture with Gazprom Neft, Gidan Energy. According to an extract from the Unified State Register of Legal Entities, Gazprom Neft has been the sole owner of the joint venture since May 19. Vedomosti sent a request to Gazprom Neft. A Shell representative confirmed to Vedomosti that the company had left the joint venture. He explained that the deal was carried out “within the framework of the concern announced in early March 2022 to withdraw from projects in the Russian oil and gas market.”

The joint venture, in which Shell received 50%, was closed in December 2020. Its amount was not disclosed. Initially, the Spanish Repsol was also supposed to participate in the deal with a share of 25% (another 25% was supposed to be given to Shell), but in May 2020 it withdrew from the project. The portfolio of assets of Gidan Energy includes the Leskin subsoil area on the Gidan Peninsula in the Krasnoyarsk Territory and the adjacent Pukhutsyayakh site in the Tazov district of the YNAO.

In the Gazprom Neft release, it was noted that the sites were “characterized by a low degree of study and remoteness from transport and oil and gas infrastructure facilities.” The resources of the Leskin subsoil area were previously estimated at more than 100 million tons of oil equivalent (AD), and the resources of the Pukhutsyaakh area – about 35 million tons. e. According to the results of the auction, 504.9 million rubles were paid for the license for geological exploration, exploration and production of hydrocarbons at the Leskin section of the Gazprom Neft structure in 2018, and the license for Pukhutsyayakhsky in 2019 cost 20 million rubles. The project envisages the start of commercial production in 2028, the projected volume of production in 2034 may reach 19.9 million tons of oil.

Although Shell’s withdrawal from the joint venture with Gazprom Neft will not have a significant impact on the Russian company’s overall performance, this decision could “significantly” hinder further implementation of the project, said Nikita Blokhin, a senior analyst at Alfa Bank. He notes that the British-Dutch concern “was directly involved in the assessment of project reserves and issues of geophysical research and seismic exploration” in the Leskin and Pukhutsyayakh sites. As leading international oil service companies leave the Russian market together with Shell, advanced technologies and solutions in the field of geological exploration are leaving with them, which is an integral part of the technological process of developing new fields, Blokhin points out. “Despite the fact that the expertise of Russian oil companies in the field of geological research is growing every year, the release of Shell, of course, will affect the timing of the project,” – said the expert.

Speaking about other possible partners of Gazprom Neft in the Hydan Energy project, Blokhin stressed that finding interested companies in the current realities “may be extremely problematic.”

Analysts were unable to estimate Shell’s stake in the joint venture. The company’s departure deprives Gidan Energy of half of the investment that needs to be compensated, adds Dmitry Koptev, a member of the expert council of the Institute for the Development of Energy Technology (IRTTEK). Therefore, one of the options to solve the problem, in his opinion, may be to stop work on further development of deposits. Koptev points out that the Leskinsky and Pukhutsyayakhsky sites are at a low stage of study and require large investments “with an unclear prospect of payback.” But IRTTEK does not completely rule out the participation of foreign investors in Gidan Energy, in particular from India and China.

Against the background of the strengthening of anti-Russian sanctions after the beginning of the SVO in Ukraine, Shell in April also announced its withdrawal from the joint venture with Gazprom and the suspension of participation in the Nord Stream-2 project. At the same time, the Russian government intends to allow foreign owners of companies that have decided to close companies in our country to return to Russia later or sell their shares to other investors, said Deputy Prime Minister Alexander Novak (Vedomosti wrote on March 23).

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