Norwegian company Equinor has signed an agreement to acquire 49% stake in KrasGeoNac (KGN) from a Russian petroleum refining firm Rosneft for nearly $550m.

The acquisition price includes a cash consideration of $325m at the effective date of 1 January 2019, and customary adjustments.

KGN holds 12 conventional onshore exploration and production licenses in Eastern Siberia, Russia.

Equinor stated: “As part of this agreement, Equinor has redirected its remaining exploration commitments offshore in the Sea of Okhotsk and as such has no outstanding obligations in that area.”

One of the acquired licenses is in production

The North Danilovsky development, one of these licenses, has commenced production in July this year and is estimated to produce nearly 40,000 barrels of oil per day by 2024, with subsequent plans to increase this to 70,000 barrels of oil per day.

The oil and gas condensate field is located in the northern part of the Danilovsky license area in Katangsky district of the Irkutsk Region, 300km from Ust Kut, 190km to the north of Kirensk.

Verkhnechonskneftegaz is a field development operator of the project, which is said to be the first stage in the development of a new oil-producing cluster.

The cluster is a result of the discovery of four fields within the Danilovsky, Preobrazhensky, and Verkhneichersky license areas.

Equinor stated: “Pursuant to the 2018 agreement between Equinor and Rosneft to cooperate on health, safety and sustainability, Equinor will collaborate with Rosneft in these areas across the KGN assets.”

Recently, the company has concluded the drilling of wildcat well 7018/5-1 in the production licence 960 in the south western Barents Sea.

The well was drilled about 100km southwest of the Snøhvit field, and about 195km west of Hammerfest, was classified as dry and will now be permanently plugged and abandoned.