Exploration Activities

NOVATEK aims to expand its resource base through geological exploration at fields and license areas not only in close proximity to existing transportation and production infrastructure, but also in new potentially prospective hydrocarbon areas. The Company ensures the efficiency of geological exploration work by deploying state-of-the-art technologies and relying on the experience and expertise of the specialists in its geology department, and the Company’s Scientific and Technical Center located in Tyumen.

The Company uses a systematic and comprehensive approach to exploration and development of its fields and license areas, beginning with the collection and interpretation of seismic data to the creation of dynamic field models for the placement of exploration and production wells. We employ modern geological and hydrodynamic modelling as well as new well drilling and completion techniques to maximize the ultimate recovery of hydrocarbons in a cost effective and environmentally prudent manner.

In 2017, NOVATEK continued exploration on the Yamal and Gydan Peninsulas to expand the resource base of LNG projects.

At the Utrenneye field, we drilled an exploration well into the Jurassic layers, whereby two (2) productive formations with potentially high condensate content were penetrated. Reserves estimation was completed as was the development plan based on six (6) exploration wells drilled between 2014 and 2017, testing of four (4) previously drilled wells, and the running and interpretation of 1,850 square kilometers of 3D seismic. The field’s PRMS reserves addition for 2017 is estimated at 245 bcm of natural gas and 12 mmt of gas condensate. The field's PRMS reserves as of 31 December 2017 amounted to 1,029 bcm of natural gas and 49 mmt of gas condensate.

3D seismic (830 square km) was completed in the Trekhbugorny license area, with the whole area currently covered by 3D seismics. Several prospects were identified in the Cenomanian and Apto-Albian layers and, accordingly, a prospecting well location was chosen.

2D and 3D seismic works were started in the Shtormovoy, Gydanskiy, Verkhnetiuteyskiy and West-Seyakhinskiy license areas.

Exploration also continued at the fields and license areas in the Nadym-Pur-Taz district to sustain pipeline gas production and utilization of the Purovsky Plant.

At the Kharbeyskoye field of the North-Russkoye cluster we tested one (1) well and drilled two (2) wells and discovered four (4) new gas condensate deposits and one (1) gas condensate and oil deposit. The PRMS proved and probable reserves addition amounted to 38 bcm of gas, 2 mmt of condensate and 20 mmt of crude oil.

At the West-Yurkharovskoye field, specifically within the West-Yurkharovskiy license area, a Middle Jurassic well was successfully tested. The Company successfully completed a horizontal well using multi-stage hydro-fracturing at a total vertical depth of 4,100 meters with abnormally high reservoir pressure of 820 standard atmosphere and co-mingled production from two separate Jurassic horizons. This was the first time that a well completion for an over-pressured Jurassic reservoir was applied in Russia.

The well has been naturally flowing with a gas-condensate mixture flow rate of 650 thousand cubic meters per day. This positive testing results were the outcome of NOVATEK’s experience in constructing horizontal wells with multi-stage hydro-fracturing in the abnormally high Jurassic pressure reservoir (anomalous pressure factor of 2.0). The field’s PRMS proved and probable reserves addition totaled 37 bcm of gas and 5 mmt of condensate.

An exploration well was drilled in the Samburgskiy license area and confirmed the potential of Achimov gas condensate deposits in the northern part of the area. Following the completion of and production from the two wells drilled previously, a high condensate ratio (up to 800 g/cm) was determined. The PRMS proved and probable reserves addition totaled 95 bcm of gas and 24 mmt of condensate.

An exploration well was drilled at the Yarudeyskoye field confirmed the prospects of 2 Jurassic deposits adding another 8 bcm of gas to PRMS reserves.

In 2017, we completed the running of 1,465 square kilometers of 3D seismic works and drilled 25 thousand meters of exploration drilling.

The successful exploration works contributed 604 bcm of gas, 38 mmt of condensate and 23 mmt of crude oil to the NOVATEK’s reserves under the Russian reserve classification, and 344 bcm of gas, 24 mmt of condensate and 23 mmt of crude oil to our PRMS reserves. In 2017, 26 new hydrocarbon deposits were discovered.