Gazprom’s Not the Only Player in Russian Fields

December 5, 2012

In Russia today the so-called independent gas producers (IGP) become more and more independent. And Gazprom has nothing to do with it, they are independent from each other.

IGP share in the total volume of gas production in Russia has been increasing since 2002. According to various estimates, the share of independent producers of “blue fuel” is now about 12-15 percent. In 2007, over 651 bcm of gas were produced in Russia, including 5,485 bcm produced by Gazprom (nearly 85 percent of the total amount). Thus, IGP production amounted approximately to 103 bcm. In the future, in accordance with the Energy Strategy adopted by the RF Government for the period till 2020, it is predicted that their share will reach 17 percent by 2010, and 20 percent by the end of the indicated period. In the experts’ opinion, including representatives of IGP, these share values may well become true.
In 2001, non-affiliated to Gazprom Russian gas producing companies united in a non-commercial Association (Union) of Independent Gas Producers (Soyuzgaz). It included Arktikgaz, National Oil-and-Gas Technologies, NOVATEK, Nortgaz, Purneftegazgeologiya, Sibneftegaz (then Itera’s subsidiary), Centrrusgaz, Tarkosaleneftegaz, Khancheineftegaz (the last two are now a part of NOVATEK Group), etc. It should be mentioned though that not all members of this organization have actually stayed outside the Gazprom system by now. For example, control stock of Sibneftegaz was sold to Gazprombank at the price of $131.5 million late in 2006, whereas the industrial experts estimated the price of this package in the sum of at least $2 billion.
Soyuzgas, in turn, is a member of the non-commercial partnership Russian Gas Society which includes a large number of the companies someway related to the gas business. Total gas-in-place belonging to Soyuzgaz members exceeds 4 tcm.

The Most Independent Gas Producers

NOVATEK is the largest independent producer of natural gas in Russia and the second one after Gazprom. License blocks and gas fields of the company are located in the Yamalo-Nenetsky Autonomous District (YaNAD). Gross production of NOVATEK in 2007 amounted to 28.52 bcm of natural gas. According to last year results, the company’s share in the total gas production was 4.4 percent, and about 8 percent in all-Russian gas deliveries to the customers. NOVATEK supplies gas to 39 regions of the RF.
According to Mark Jetway, Director of Finance of NOVATEK, the company will start the second stage development of the Yurkharovskoye field this October, which will definitely have a positive effect on the gas production. In 2009, the company is planning to increase the production by 20 percent. The proved gas reserves of NOVATEK in C3 category amount to 3.5 tcm.
Rosneft is the second company in Russia after Gazprom in the gas reserve volume and the third one in gas production. It stands apart from the rest of independent gas producers, as it is a state company. As appears from the name of this company, it is involved mostly in oil production, but since 1998, it has been consistently increasing gas production as