Russian oil company Gazprom Neft has agreed to form a joint venture (JV) with Royal Dutch Shell, called Meretoyakhaneftegaz, to exploit 1.1 billion tonnes of oil reserves contained in the Yamal Peninsula in northwest Siberia.

The two companies have signed all required legal documents on a sale and purchase agreement for a 50% interest in Meretoyakhaneftegaz.

Asset Portfolio of the new Gazprom Neft, Shell JV in Yamal

Currently, Meretoyakhaneftegaz owns licensing rights to the Meretoyakhinskoye field.

According to Gazprom Neft, various license blocks at different stages of development, which include the Tazovsky and Severo-Sambrugsky, and two Zapadno-Yubileiny blocks in the Yamalo-Nenets Autonomous Okrug, will be transferred automatically to the Meretoyakhaneftegaz’ asset portfolio after completion of the transaction.

Gazprom Neft management board chairman Alexander Dyukov said: “This agreement marks the logical continuation of our successful collaboration with Shell on a number of ongoing projects. We see in Shell a reliable partner, with whom we are willing to combine professional skills, as well as sharing financial and technical resources, in developing major projects.

“As part of this new agreement we will be able to reveal the full potential of what is a major hydrocarbon cluster in Yamal, viably and efficiently. We will be investigating further opportunities for implementing projects with Shell in the future, including projects outside of Russia.”

The transaction is expected to be closed in late 2019 or early 2020 upon getting all the required corporate and regulatory approvals and meeting all legal preconditions.

Gazprom Neft and Shell had formed other joint ventures in the past, which includes the Salym Petroleum Development in Khanty-Mansi Autonomous Okrug in Russia. Since 2003, the companies have been involved in developing the Salym group of oil fields, which include the Zapadno-Salymskoye, Verkhnesalymskoye and Vadelipskoye blocks.

Shell CEO Ben van Beurden said: “This is yet another milestone in our partnership with Gazprom Neft. Over the years, we have built a trusted and fruitful relationship.

“Our Salym Petroleum Development joint venture is an example of how we can create a very efficient, innovative and responsible oil producer by combining our strengths. Our history of success fills me with confidence that our new venture will also be great success.”