Rosneft plans to increase annual gas production

The Russian oil giant Rosneft plans to increase its annual gas production from the current 26 billion cubic meters to 100 billion cubic meters in a foreseeable future, says Rosneft President Igor Sechin's presentation for a meeting with foreign investors in London.

The current production of 26 billion cubic meters is accomplished roughly equally owing to Itera's and Rosneft's assets. The presentation does not specify what assets would be employed to reach the said level of gas production.

Taking into account Itera's assets, the company's gas resources make up 26 percent and the share of gas in its production is 15 percent. The company's gas reserves-to-production ratio is currently estimated at 68 years.

Rosneft has contracted to supply 34 billion cubic meters of gas a year in 2013 and 2014, 37 billion cubic meters in 2015, 72 billion cubic meters in 2016 and 77 billion cubic meters in 2017.

The company says it plans to develop gas marketing through supplying gas to E.ON, Enel and Fortum and due to Itera's well-developed marketing network in Russian regions.

It was reported earlier that Rosneft first acquired 6 percent in Itera for 5 billion rubles and later increased its share in it to 51 percent by adding 100 percent in Kynsko-Chaselskoye Neftegas (the holder of a license to develop the Kynsko-Chaselskoye field) to the authorized capital. The aggregate deposits of the Kynsko-Chaselskoye are estimated, according to Russian classification, at 40.2 million tonnes of oil and 284.2 billion cubic meters of gas, with proved gas deposits of only 61 billion cubic meters.

It was presumed earlier that the Kharampurskoye gas condensate deposit would also be contributed to the joint venture. Neither Rosneft nor Itera commented on whether other Itera group assets (i.e. a shelf block in Turkmenistan and gas assets in Latvia and Estonia) or Rosneft assets (particularly the Kharampurskoye gas condensate deposit and its roughly 400 billion cubic meters of gas) were to be contributed to the joint venture.

The Itera group owns 10 percent of Eesti Gaas, Estonia's only gas purchaser and distributor, as well as 16 percent of the Latvian gas-distributor Latvijas gaze and shelf block No.21 in Turkmenistan.

The joint venture's proven and probable resources (per international classification) amount to 372.4 billion cubic meters of gas and 15.7 million tonnes of liquid hydrocarbons. The enterprise is reckoned to be producing some 13 billion cubic meters of gas in 2013.

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