Gas and oil production

In 2010 Gazprom produced:
– 508.6 billion cubic meters of gas;
– 11.3 million tons of gas condensate;
– 32 million tons of oil.

Gas production strategy

In its strategy Gazprom is committed to the principle of producing as much gas as demanded. Provided there are favorable conditions in foreign and domestic markets and solvent consumer demand in Russia, Gazprom may produce 640 to 660 billion cubic meters of gas a year by 2020.

The Yamal Peninsula, Eastern Siberia, the Far East and the Russian continental shelf are the strategic regions of gas production in the long run.

Gazprom’s strategy for promising gas fields development hinges on cost effectiveness achieved through building up gas production facilities in sync with gas transmission, treatment and storage capacities.

Oil production strategy

Oil business development is one of Gazprom’s strategic missions. Gazprom neft is the mainstay of Gazprom Group’s oil production.

Gazprom neft is determined to increase oil production to 100 million tons of oil equivalent per annum by 2020 (production of subsidiary and associated companies included).

The plan to reach the 2020 production level stipulates stagewise involvement of all the explored oil fields of Gazprom neft in the production process and the resource base buildup through commissioning of oil fields being on the balance of other companies of the Group. The asset portfolio will be expanded through acquisition of prospective oil acreage in the non-licensed stock and the purchase of assets.

Gas, gas condensate and oil production indicators

Gazprom accounts for 78 per cent of the Russian and 15 per cent of the global gas production.

In 2010 Gazprom produced 508.6 billion cubic meters of gas, 11.3 million tons of gas condensate and 32 million tons of oil.

Gazprom Group’s production capacities in Russia

	As of December 31
	2005	2006	2007	2008	2009
Number of fields in operation, units	114	119	122	122	121
Producing gas wells, units	6,941	7,010	7,154	7,214	7,310
including those in operation, units	6,401	6,513	6,640	6,723	6,774
Producing oil wells, units	5,018	5,486	5,881	5,932	6,158
including those in operation, units	4,372	4,948	5,342	5,444	5,663
Comprehensive and preliminary gas treatment plants, units	169	170	172	173	174
Aggregate design capacity of comprehensive gas treatment plants, billion cubic meters per annum	939.6	957.8	976.0	991.0	994.5
Booster compressor stations, units	44	44	45	45	47
Installed capacity of booster compressor stations, MW	4,176.1	4,176.1	4,300.1	4,460.1	4,508.1

Coalbed methane

Coalbed methane (CBM) production is destined to become one of the cornerstones for Gazprom’s resource base expansion strategy and will essentially lead to the creation of a new industry in Russia – methane production from coal basins. Moreover, large-scale application of domestic CBM production technologies will help minimize accidents at coal mines and considerably improve the environmental situation.

Russia is predicted to possess immense coal gas resources – about 84 trillion cubic meters, which are commensurate with one-third of the country’s forecasted natural gas resources. With its methane resources estimated at 13 trillion cubic meters, Kuzbass is currently the most suitable basin for commercial gas production.

In February 2010 Gazprom inaugurated the first Russian facility for CBM production from the Taldinskoye field in the Kemerovo Oblast. According to early estimates, the Kuzbass basin may annually yield some 20 billion cubic meters of gas in the long run.

Hydrocarbon resources development abroad

Gazprom Group and some of its affiliated companies are involved in a number of international projects on hydrocarbons exploration and production.

Gazprom performs geological exploration offshore India and Vietnam, offshore and onshore Libya and Venezuela as well as in Algeria, Uzbekistan, Kyrgyzstan and Tajikistan.

Serbian NIS, which joined Gazprom Group in February 2009 as a subsidiary company, produced 1.26 million tons of oil equivalent in 2010 – 0.38 million tons (43.7 per cent) up versus 2009, including 1.0 million tons of oil (versus 0.7 million tons produced in 2009).

Gas Project Development Central Asia AG (affiliated company with a 50 per cent stake owned by Gazprom Group) together with Gazprom zarubezhneftegaz (Gazprom’s subsidiary) are executing the project for the Shakhpakhty field pre-development in Uzbekistan. The total amount of gas produced within the project from August 2004 through April 2011 exceeds 1.7 billion cubic meters.

In addition, according to the Agreement between Gazprom and NHC Uzbekneftegaz, a stagewise geological exploration program has been developed and is being implemented in the Ustyurt region blocks, Uzbekistan. In May 2009 the Dzhel gas field was discovered on the Ustyurt plateau.

Libyan concessions C96 and C97 owned by Wintershall AG (affiliated company with a 49 per cent stake held by Gazprom) yielded 1.92 million tons of oil, 0.1 million tons of condensate and 227 million cubic meters of gas in 2010.

In June 2009 Gazprom neft acquired a 20 per cent stake in the National Oil Consortium set up by five major Russian oil companies on a parity basis to execute oil production projects in Latin America. One of such projects is Junin-6 – the Orinoco River heavy oil belt in Venezuela. In 2010 Gazprom neft was appointed the leading operator of the Junin-6 project. The leading operator is responsible for preparation of the final investment decision on further development of the Junin-6 field.

In December 2010 Gazprom neft became the major participant of a consortium to develop the Iraqi Badra field with initial oil in place preliminary estimated at 3 billion barrels (more than 412 million tons). The company holds a 30 per cent stake in the project.

In 2010 Gazprom neft inked an agreement on developing two blocks offshore Equatorial Guinea and an agreement with Malaysian Petronas on entry in the project for exploration and subsequent development of four blocks offshore Cuba.

In March 2010 Gazprom Group began drilling the first prospecting well within the El Assel licensed block in the Berkine basin of Algeria. In November 2010 first oil and gas deposits were discovered there.