Gazprom Neft 2020 budget to focus on upstream projects, refining modernizations

Gazprom Neft expects 2019 hydrocarbon production to reach 96 million tonnes of oil equivalent (mtoe), a 3.3% increase compared to 2018, the company reported Dec. 20. Total investment for the year is expected to reach 400 billion rubles, increasing to 421 billion rubles in 2020, largely directed at developing new upstream projects and modernization initiatives throughout the company’s refining facilities.

The development of the company’s Arctic projects—Prirazlomnoye, Novoportovskoye, and Vostochno-Messoyakhskoye fields—delivered the largest contribution to production growth this year. The company continued the development of its resource base, specifically in acquiring subsoil usage rights to 27 new license blocks in the Yamalo-Nenets, Khanty-Mansi, and Orenburg Oblasts, and other regions. The company also acquired licenses to Blizhenovopportovskoye field, and exploration rights to blocks in the west of the Taymyr peninsula. In addition, long-term operatorship agreements have been entered, allowing the company to begin the process of bringing oil-rim deposits into development at a range of Gazprom fields, the company said.

Annual refining volumes are provisionally expected to reach 41.5 million tonnes. Sales of premium oil products are expected to be 26.4 million tonnes.

Gazprom continued the second phase of its full-scale technological and environmental programs on modernizing its refining facilities throughout the year. Construction of a hydrocracking facility and delayed coking unit is ongoing at the Omsk Refinery, together with construction of an advanced crude distillation unit. Installation of key equipment for a catalytic reforming unit is now complete, with this facility expected to deliver a 1.5-fold increase in production of high-performance gasoline components. The Moscow Refinery is continuing preparations prior to commissioning a combined oil refining unit (CORU), while the NIS Pančevo refinery continues pre-commissioning activities on an advanced conversion complex based on delayed coking technology.

Gazprom Neft, together with SIBUR, consolidated 100% of the charter capital in the Poliom LLC polypropylene plant in Omsk, part of the company’s development its petrochemicals business. Also in Omsk this year, Gazprom begin construction of Russia’s first modern oil-refining catalyst production facility.