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NOVATEK is Russia’s largest independent gas producer and the second-largest natural gas producer in Russia.
Founded in 1994, the Company is engaged in the exploration, production and processing of natural gas and liquid hydrocarbons and had 4.96 billion oil equivalent barrels of proved reserves at the end of 2008. The Company’s upstream activities are concentrated in the Yamal-Nenets Region, which is the world's largest natural gas producing area and accounts for over 90% of Russia's natural gas production and 20% of the world’s gas production.
DeGolyer and MacNaughton, an independent petroleum engineering consulting firm, has appraised the reserves at our three core fields — Yurkharovskoye, East Tarkosalinskoye and Khancheyskoye — and estimates that as of 31 December 2008 these fields had proved reserves of 4.96 billion boe, including 690 bcm of natural gas.
In 2008, our three core fields produced 223 mmboe (approximately 612 thousand boe per day), consisting of 30.88 mmcm of natural gas and 2.6 mmt of liquid hydrocarbons.
In 2009 the Board of Directors of OAO NOVATEK approved the acquisition of a 51% equity stake in OAO Yamal LNG holding the license for exploration and development of the South-Tambeyskoye field. The South-Tambeyskoye field was initially discovered in 1974, the field is located in the north-east of the Yamal Peninsula. As of 1 January 2008, the field’s natural gas reserves in accordance with the Russian reserve classification (categories C1 + C2) amount to 1.256 tcm.
In October 2009, the Company launched the second stage of Phase Two development at the Yurkharovskoye field, providing the Company with the potential to increase annual productive capacity at the field by seven billion cubic meters (bcm) of natural gas and approximately 600 thousand tons of unstable gas condensate. As part of the second stage development, the Company launched two additional processing trains for separating natural gas, enabling the field to reach annual natural gas and gas condensate production volumes of 23 bcm and two million tons, respectively. With the launch of the second stage, NOVATEK has the productive capacity to produce up to 44 bcm of natural gas per annum.
In 2009, gross production for NOVATEK totaled 32.78 billion cubic meters of natural gas and 3,049 thousand tons of liquids. Natural gas production increased by 1.89 billion cubic meters, or by 6.2%, whereas gross liquids production increased by 463 thousand tons, or by 17.9%, as compared with the corresponding gross production in 2008.
Our impressive growth has been achieved through the successful strategy of developing and exploiting our significant hydrocarbon resource base, while maintaining our low-cost competitive advantage. Our strategic goal is to continue building shareholder value through the efficient employment of financial capital and the successful development of our existing asset base.
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