The Achimov 4A/5A phase development involves bringing Blocks 4A and 5A of the Achimov deposits of the Urengoyskoye field into production

Urengoyskoye field

Image: The Urengoyskoye field has been producing since 1978. Photo: courtesy of Gazprom.

OMV and Gazprom have finalised a price of €905m (£805.21m) for which the former will acquire a stake of 24.98% in the Achimov 4A/5A phase development in the onshore Urengoyskoye field in Russia.

The two firms signed an amendment agreement in this regard as a follow up for the basic sale agreement announced by them in October 2018. The signing of the final transaction documents is likely to be done by the year end, said OMV.

Details of Urengoyskoye field and Achimov 4A/5A project

Located in the northern West Siberia Basin, the Urengoyskoye field, which holds gas and condensate reserves, has been in production since 1978. The Achimov 4A/5A phase development of the Urengoyskoye field will involve bringing the Blocks 4A and 5A of the hard-to-reach Achimov deposits into production.

Upon completion of the transaction, Gazprom’s stake in the Achimov 4A/5A phase development will come down to 50.01%. The third partner in the project is Wintershall Dea, which will retain its stake of 25.01%.

OMV, in a statement, said: “The amended “Basic Sale Agreement” also contains the key principles of, and the way forward with respect to, the transaction.

“The execution and implementation of the transaction itself is, amongst others, subject to the approval of the Supervisory Board of OMV and an agreement with Gazprom on the final transaction documents as well as regulatory approvals at a later stage.”

The Urengoy field, which is the largest gas and condensate field in Russia, is among the largest gas fields in the world, stretching over 12,000km2.

Through the acquisition, OMV will be adding nearly 600 million barrels of oil equivalent (boe) to its reserves until the end of the year 2044 from its share of production in Achimov 4A/5A.

Gazprom expects the Achimov 4A/5A phase development to begin production in late 2020. OMV’s share of production once the deposits reach plateau is expected to be more than 80,000boe/day in 2026.

On its part, OMV is expected to invest around €950m (£845.25m) until the end of the year 2044 for the Achimov 4A/5A phase development, which includes nearly €75m (£66.73m) compensation for past cost incurred during 2017 and 2018.