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 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 modeling as well as new well drilling and completion techniques to maximize the ultimate recovery of hydrocarbons in a cost effective manner.

In 2013, we continued full-scale exploration works at our license areas located on the Gydan Peninsula and offshore in the Gulf of Ob - assessment of the resource potential of the license areas was completed and preparatory works for exploration drilling on the Gydan Peninsula began. Exploration work activities also continued at the fields and license areas in the Nadym-Pur-Taz region, including the license areas of the SeverEnergia joint venture. The exploration activities at these fields targeted gas condensate bearing Lower Cretaceous (including Achimov) deposits at subsurface depths of between 2,000 to 4,400 meters.

In 2013, NOVATEK completed approximately 609 linear kilometers of two-dimensional (2D) seismic and 2,677 square km of three-dimensional (3D) seismic, including seismic activities run at our joint ventures. Seismic studies were mainly conducted in the new regions (at the Utrenneye field on the Gydan Peninsula), at the fields prepared for launch (Termokarstoviy, Samburgskiy and Yevo-Yakhinskiy license areas), as well as at the East-Tarkosalinskoye field in the framework of the oil program.

Exploration drilling in 2013 amounted to 37.3 thousand meters. The construction of eight prospecting and exploration wells was completed leading to a better understanding of the geology of previously discovered deposits and discovery of the Dorogovskoye field at the North-Russkiy license area. As of 31 December 2013, recoverable reserves of the newly discovered Dorogovskoye field under the Russian ABC1 + C2 reserve classification was estimated at 35 bcm of natural gas and 2 mln tons of gas condensate.

As a result of the exploration works main reserve growth was due to detailing of the geological model of the Utrenneye field and supplementary exploration of the Urengoyskoye (within the Samburgskiy license area) and Yurkharovskoye fields. Positive results were also obtained during supplementary exploration of oil deposits at the East-Tarkoslinskoye field.