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Rosneft, Itera form natural gas joint venture

Rosneft and Itera Group have completed a deal creating a joint venture that will produce and sell natural gas based on assets of Itera Oil & Gas Co.

Rosneft acquires 51% of the venture in exchange for a 100% interest in the charter capital of Kynsko-Chaselskoye Neftegaz and $173.4 million cash, subject to adjustment.

Kynsko-Chaselskoye owns the Kysnko-Chaselsk license block in the Krasnoselkupsk region of the Yamalo-Nenets Automous District. The license includes deposits designated Kynskoye, Fakhirovskoye, Novo-Chaselskoye, Naumovskoye, Ust-Chaselskoye, and Verkhne-Chaselskoye. Total reserves are estimated at 40.2 million tonnes of oil and 284.2 billion cu m of gas.

The Itera Oil & Gas assets underlying the joint venture also are in the Yamalo-Netets region. They include:

● A 49% interest in Purgaz, which is developing Gubinsky gas-condensate field, currently producing 15 billion cu m/year from 95 production wells. Reserves exceed 216 billion cu m. Gazprom holds the other 51%.

● A 49% interest in Sibneftegaz, which holds licenses to develop Beregovoye, Pyreynoye, Khadyryakhinskoye, and Zapadno-Zapolyarnoye fields. Total reserves are 490 billio cu m. The fields now produce 10.3 billion cu m/year from 75 wells. The remaining 51% interest is held by Novatek.

● A 67% interest in Uralsevergaz, a supplier of natural gas to the Sverdlovsk region. The Sverdlovsk government holds a 30% interest.

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