Rosneft, ITERA Join Forces for Gas Exploration in Russia

Rosneft and ITERA Oil and Gas Company have signed a strategic cooperation agreement for joint exploration and development of gas deposits in Russia.

The agreement signed by Rosneft President Eduard Khudainatov and ITERA Oil and Gas Company Chairman of the Board of Directors Igor Makarov envisages the possibility of establishing a joint venture. The joint venture would comprise ITERA Group’s gas assets – 49 percent of Sibneftegaz, 49 percent of Purgaz, 67% of Uralsevergaz and several other assets – and Rosneft-owned deposits in the Kynsko-Chaselsk group. It is envisaged that other Rosneft gas assets would be transferred to the joint venture in the future. The company will become Rosneft and ITERA Group’s gas extraction and sales operator.

The joint venture’s initial combined recoverable liquid hydrocarbon and natural gas reserves will total approximately 60 million tonnes and approximately 1.2 trillion cubic metres respectively. In the coming years the company could extract and sell over 40 billion cubic metres of its own gas per year.

Rosneft and ITERA have also agreed to pursue joint efforts to expand their gas business through the acquisition of new gas producing assets.

“The joint venture provides a strong foundation for successful implementation of the shareholders’ gas strategy and serves as an effective tool for monetizing gas produced at Rosneft and ITERA’s deposits. Joint projects to be developed under the agreement will be a substantial step forward in implementing Rosneft’s strategic programme to increase the share of gas reserves under development, which will help increase the Company’s capitalization and create additional value for shareholders. We are looking forward to working effectively with the management of the ITERA Group to manage this joint asset in extracting, preparing, transporting and selling gas,” said Rosneft President Eduard Khudainatov.

Commenting on the agreements, ITERA Oil and Gas Company Chairman of the Board of Directors Igor Makarov said: “The establishment of this joint venture with Rosneft is an important step in ITERA Group’s further development. It will allow both of the companies to combine their potentials and use their strategic advantages most effectively. We expect the joint venture to become the flagship on the Russian independent gas producer market.”

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LNG World News Staff, February 29, 2012