Novatek Russian Reserves Stable

Russian independent gas producer and LNG exporter Novatek ended 2018 as it began, with 29 years' worth of production ahead of it based on its reserves as calculated under the US Securities Exchange Commission accounting rules, it said January 24.

Total SEC proved reserves, including its share in joint ventures, aggregated 15.789bn barrels of oil equivalent (boe), comprising 2.177 trillion m3 of natural gas and 181mn metric tons of liquid hydrocarbons, according to independent auditors DeGolyer & MacNaughton.

Novatek is planning a major roll-out of gas production and liquefaction facilities on the Yamal and Gydan peninsulas, which will be of strategic importance to the government as it seeks to extend its reach into Asian markets. Its Yamal LNG project, now fully operational, received substantial aid from the Kremlin. It is also planning a giant transhipment facility in Kamchatka, in Russia's far east. 

Total proved reserves increased by 4% compared to the year-end 2017, representing a reserve replacement rate of 222% for the year, addition of 1,218mn boe, inclusive of 2018 production.

Reserves were positively impacted by successful exploration works at the Utrennee, Urengoiskoe (Samburgskiy licence area) and Yarudeiskoe fields, production drilling at the South-Tambeiskoe, North-Russkoe and Yaro-Yakhinskoe fields, as well as new assets acquisitions such as the Beregovoe field and the Ust-Yamsoveskiy licence area, it said,

Novatek "significantly increased" its exploration activities over the past year with the new licence areas on the Yamal and Gydan peninsulas. Although the results of these activities are not reflected in the current year reserves, the findings represent some of the largest exploration successes in 2018, supporting its plans to build a substantial LNG platform in the Arctic region of Russia.