Photo: Illustration; Source: Novatek

Novatek, Gazprom Neft form Arctic E&P joint venture

Russian energy firms Novatek and Gazprom Neft have formed an exploration and production joint venture which will focus on developing a license in the East Siberian Sea and the Chukchi Sea.

Novatek said that the joint venture was announced during the Saint-Petersburg International Economic Forum on Friday.

Under the agreement, Novatek bought a 49 per cent participation interest in Gazpromneft Sakhalin which owns a geological survey, exploration, and production license for the North-Vrangelevskiy license area.

The transaction builds on the agreement on joint Arctic development signed by the parties in June 2019 at that years’ Saint-Petersburg International Economic Forum.

According to Novatek, the parties plan to conduct exploration work on a parity basis at the North-Vrangelevskiy license area located in the eastern part of the East Siberian Sea and the western part of the Chukchi Sea. The water depth within the license area is 20-90 meters.

Leonid Mikhelson, Novatek’s chairman of the management board, said: “We are expanding our long-term resource base to implement new projects in the Arctic Zone of Russia.

We have a solid background for efficient operations on this new prospective project – a successful track record of joint projects implementation with Gazprom Neft, our experience in navigating the Northern Sea Route as well as the measures taken by the Government of the Russian Federation to ensure year-round navigation along the NSR”.

Novatek was very active during the week. Namely, the company on Friday signed a deal to sell 10 per cent participation interest in Arctic Transshipment to TotalEnergies.

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Arctic Transshipment is a unit of the Russian company that will operate two LNG transhipment complexes currently under construction in the Kamchatka and Murmansk regions.

In previous days, the company signed a memorandum of understanding on renewable power cooperation with European energy company Fortum and signed long-term supply deals with Zhejiang Energy and Glencore.