In 2018, the Company strengthened its leadership as Russia’s Top 3 hydrocarbon producer. Its total output (including shares in joint ventures) increased 3.5% y-o-y to 92.88 mtoe. The average daily production across the Group amounted to 254.45 ktoe (up 3.5%).
Major contributors to the growth of production were Gazprom Neft’s large fields in development (Prirazlomnoye, Novoportovskoye and Vostochno-Messoyakhskoye). Other growth drivers were an increase in the equity share in Arcticgas (from 46.67% to 50%) and the beginning of production at the Tazovskoye field.
The Company continues forming a strong cluster in the Arctic to secure its oil and gas potential for the future. The plan for 2019 is to start development in the northern part of the Novoportovskoye field.
New high-flow wells were put into operation at the Messoyakha group of fields in 2018. Development of deep horizons at the Vostochno-Messoyakhskoye field and preparation of the Zapadny block, where an oil and gas deposit was discovered in 2018, are scheduled for 2019. With 85 mt of geological reserves, the Zapadny block deposit is comparable to a separate field by its size. Production at the Zapadny block will start in 2021.
Group-wide oil and condensate production increased 0.9% to 62.99 mt in 2018. The Company is now the third largest oil producer in Russia after Rosneft and Lukoil.
The Company made significant progress in innovative oil recovery enhancement techniques. A two-year pilot project for alkaline-surfactant-polymer (ASP) flooding at the Zapadno-Salymskoye field was finished in 2018. The technology increased the oil recovery factor to 69%, which is two times higher than the Russian industry average. The ASP flooding technique can revive production at mature conventional fields and extent their life for many years. The initial increase in the output might reach 200 mt of oil.
More cost-efficient well drilling and completion is another priority for Gazprom Neft. In 2018, the Company drilled long horizontal wells (up to more than 2 km long) and multilateral wells with cased boreholes, used hydraulic fracturing (high volume, acid and proppant fracturing techniques), and rolled out underbalanced drilling, a technique that had proved efficient.
Gazprom Neft invests much effort in commercialising associated petroleum gas (APG) and natural gas produced at oil fields, and increasing its value. In 2018, Group-wide gas production increased 9.4% to 37.22 bcm. The growth is primarily associated with high utilisation of gas processing equipment (96%), high APG utilisation (up to 97–99%) at the fields with developed gas infrastructure, expansion of the gas injection infrastructure at the Novoportovskoye field, and gas compression capacity expansion at the Eastern block of the Orenburgskoye oil and gas condensate field.
In 2018, the Company decided to invest in the gas processing capacity expansion to increase utilisation of gas from the Novoportovskoye field and adjacent licence blocks.
A pipeline will be built later to run from the Yamal Peninsula to the Gydan Peninsula and Yamburgskoye field where it will be connected to the Unified Gas Supply System. The pipeline is planned to be commissioned in 2022. Given rich gas resources of the Yamal Peninsula, the new pipeline will be an important component of the Company's strategic infrastructure in the region.