Gazprom and Wintershall sign Framework Agreement on asset swap
Alexey Miller, Chairman of the Management Committee, Gazprom and Kurt Bock, Chairman of the Board of Executive Directors, BASF signed in Ludwigshafen (Germany) today a Framework Agreement specifying the terms and conditions of a potential asset swap deal.
The Agreement provides for the possibility that Gazprom and Wintershall jointly develop two blocks of the Achimov deposits in the Urengoy field and that Gazprom receives equivalent stakes in Wintershall's oil and gas exploration and production projects in the North Sea.
The document stipulates that at the initial cooperation stage Wintershall will receive 25 per cent plus one share in the development project for two blocks of the Achimov deposits.
In exchange, Gazprom is supposed to receive a 50 per cent stake in the oil and gas projects implemented by Wintershall in the North Sea.
“The constructive partnership of Gazprom and Wintershall enables us to cope with sophisticated and challenging projects. We are ready to expand production operations jointly with Wintershall in the Achimov deposits of the Urengoy field and to cooperate with the company on a mutually beneficial basis on exploration and production projects in the southern part of the North Sea where Wintershall has been successfully operating for several decades,” said Alexey Miller.
“Joint development of the Achimov deposits by Gazprom and BASF/Wintershall exemplifies well enough a long-lasting model of our joint work: cooperation in a spirit of partnership across the value chain. The decision to expand joint production operations is an important step forward in our partnership with Gazprom, which has been lasting for over 20 years,” noted Kurt Bock.
BASF is the world's leading petrochemical company. Its operational activities are focused on the following segments: chemicals, plastics, crop protection products as well as hydrocarbons extraction and transportation.
Being a wholly owned subsidiary of BASF, Wintershall Holding operates in the power generation industry. Gazprom and Wintershall Holding set up joint ventures WINGAS и WIEH.
BASF and Wintershall Holding partner Gazprom in developing the Yuzhno-Russkoye oil and gas field and the first pilot block of the Achimov deposits in the Urengoy field as well as constructing the Nord Stream gas pipeline.
The Achimov deposits lie at depths of nearly 4,000 meters and featured with abnormally high formation pressure (over 600 Ata) and heavy paraffins presence. Geological exploration has proven the Achimov deposits productivity across a vast area of the Nadym-Pur-Taz region. The bulk of recoverable hydrocarbon reserves of the Achimov deposits are accumulated in the Urengoy oil, gas and condensate field with Gazprom dobycha Urengoy (Gazprom's fully-owned subsidiary) being the subsurface user. The Achimov deposits contained in Gazprom dobycha Urengoy owned fields alone account for more than 1 trillion cubic meters of natural gas and 200 million tons of gas condensate (C1 category).
In July 2003 Gazprom and Wintershall Holding (100 per cent subsidiary of BASF) set up the Achimgaz joint venture to develop the first pilot block of the Achimov deposits in the Urengoy field.
In 2008 Achimgaz brought the block into pilot operation.