the RUSSIA oil & gas competitive intelligence report - Report Buyer

Russia Oil and Gas Competitive Intelligence Report 2010
Market Position
Gazprom Neft was founded as Sibneft in 1995 and took on a broad portfolio of former state assets.
Following two failed merger attempts with Yukos in September 2005, Gazprom acquired 72% in Sibneft,
buying out businessman Roman Abramovich’s stake in a US$13bn deal, raising its stake to 95.7% after
exercising its buy-out right in April 2009. The company was then renamed Gazprom Neft. It is now the
fifth largest crude producer in Russia and has one of the best growth rates, owing to its strong position in
high-potential regions. Gazprom Neft’s upstream assets are chiefly located in the Northwest and Western
Siberia (Yamal-Nenets, Khanty-Mansiysk, Omsk, Tomsk, Tiumen), as well as Irkutsk and Chukotka
further east. The main production arm is Noyabrskneftegaz, which operates about 30 fields in the
Yamal-Nenets and Khanty-Mansiysk autonomous regions and holds around 60% of the company’s
reserves.
Other major producing assets include stakes in Slavneft and Tomskneft, jointly owned with TNK-BP and
Rosneft respectively. As of Q309 Gazrpom Neft also has managerial control of Sibir Energy, which it
won after significant effort. Sibir's upstream operations are focused on Khanty-Mansiysk where it holds
the Salym fields, operated on a 50:50 basis with Shell, and the Yuzhnoe and Orekhovskoe fields, operated
by subsidiary Magma Oil (95%). In 2009, Sibir’s net output averaged around 80,000b/d.
Gazprom Neft’s refining and market assets include the 385,000b/d Omsk Refinery and a 60% vote in the
240,000b/d Moscow Oil Refinery, as well as a growing network of service stations primarily located in
Western Siberia, although Sibir’s acquisition has given it a strong position in Moscow. Through its
wholly owned unit Moscow Oil and Gas Company (MOGC), Sibir owns 100% of 69 MKT-branded
service stations, 51% of Mosnefteproduct's 64 stations and storage terminals and 25% of BP's Moscow
retail network.
Strategy
The company is involved in the planned 1mn b/d Burgas-Alexandroupolis pipeline, which will transport
Russian crude to Europe and is preliminarily scheduled for completion in 2010. Gazprom Neft also works
on the Northern Zadegan project in Iran.
Gazprom Neft plans to produce 1.8mn b/d by 2020 through developing Arctic fields and investing
US$70bn. Gazprom Neft expects to receive the licence to develop the Arctic Prirazlomnoye deposit by
2010 and plans to start work at the giant offshore field five years later. Downstream, the company plans
to raise refining capacity until it accounts for two-thirds of crude production. It will achieve this goal by
purchasing refineries at home and abroad, and is particularly interested in buying more European assets
after in February 2009 acquiring 51% of Serbia’s Naftna Industrija Srbije (NIS).
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