Oil and Gas Upstream in Eastern Siberia and Far East

Eastern Siberia and Russian Far East are key regions in Russia’s strategy for energy development. Vast hydrocarbon reserves, which the government regards as critical to the country’s socioeconomic development, and proximity to Asia-Pacific markets make the regions of paramount importance to companies working or planning to work in these markets.

This study focuses on the resource base, current production rates, and the status and growth potential of Eastern Siberia and Russian Far East’s petroleum infrastructure.

The report presents the study results on the activities of major subsoil users in terms of companies, on the one hand, and mainland and offshore production projects implemented across the region, on the other.

In addition to production, the report highlights the most significant oil and gas transmission projects aimed at bringing Russian hydrocarbons to domestic and export markets.

The report includes an overview of three Asia-Pacific markets – China, Japan and South Korea – that are promising for Russian oil and gas export.

Going beyond updating the main body of information on the region, the report provides insights on licensing, oilfield services, and oil and gas supply logistics.

The report includes the following:
• An in-depth examination of oil and gas fields in the region
• A full description and analysis of each key market player
• Major production projects in the region
• Forecasts for growth in the region’s petroleum industry

The fast-growing regions of Eastern Siberia and Russian Far East have captured the attention of both Russian and global investors. Armed with in-depth analyses from this report, companies already engaged in the market and those seeking opportunities there will be better able to assess the risks they face and the advantages they hold, and to design effective growth strategies.
More than a source of statistical data on the region’s petroleum sector, the report offers insights on various companies’ activities that could be useful in building market entry and expansion strategies for these regional markets.

This report is an updated and augmented version of the previous report and takes into account recent changes in the global market landscape and Asia-Pacific’s expanded role.

We believe that the detailed information and in-depth analyses produced by RPI will help companies to design and implement more streamlined strategies for the fast-growing Eastern Siberian and Russian Far East markets, and to better leverage their strengths and anticipate emerging opportunities.

1 Introduction

2 Hydrocarbon reserves and resources

2.1. Eastern Siberia

2.1.1. Irkutsk Region

2.1.2. Krasnoyarsk territory

2.2. Far East

2.2.1. Republic of Sakha (Yakutia)

2.2.2. Sakhalin region

2.2.3. Chukotka Autonomous District

2.2.4. Kamchatka territory

2.2.5. Magadan Region

2.2.6. Khabarovsk Territory

3 Key License Holders

3.1. Eastern Siberia

3.1.1. Gazprom

3.1.1.1. Gazprom Neft

3.1.2. Irkutsk Oil Company (IOC)

3.1.3. Petromir

3.1.4. Rosneft

3.1.4.1. Former ОАО TNK-ВР assets

3.1.5. Slavneft

3.1.6. Surgutneftegaz

3.2. Far East

3.2.1. Gazprom

3.2.2. Petrosakh

3.2.3. Rosneft

3.2.4. Foreign Companies

3.3. Licensing

4 Major projects

4.1. Eastern Siberia

4.1.1 Vankor project

4.1.2 Yurubchensky project

4.1.3 Kuyumbinsky /Tersko-Kamovsky project

4.1.4 Talakan project

4.1.5 Verkhnechonsky project

4.1.6 Bolshekhetsky project

4.1.7 Yaraktinsky project

4.1.8 Srednebotuobinsky project

4.1.9 Dulisma project

4.1.10 Angaro-Lensky project

4.1.11 Chayandinsky project

4.1.12 Other projects

4.2. Far East

4.2.1. Sakhalin-1

4.2.2. Sakhalin-2

4.2.3. Sakhalin-3

4.2.4. Sakhalin-5

4.2.5. Other Sakhalin projects

4.2.6. Kamchatka projects

4.2.7. Khabarovsk Territory offshore

5 Hydrocarbon production in the East of Russia

5.1. Current oil and gas production

5.1.1. Eastern Siberia

5.1.2. Far East

5.2. Oil and gas production growth potential

5.2.1. Oil production growth potential

5.2.2. Gas production growth prospects

6 Eastbound Exports of Russian Oil and Gas

6.1. APR energy market

6.1.1. China’s energy market

6.1.2. South Korean energy market

6.1.3. Japan’s energy market

6.2. Export of fuels from Russia to APR

6.2.1. ESPO System

6.2.2. ESPO blend

6.2.3. LNG Exports

Figure 2-1. Changes in wildcat and exploration drilling in the Irkutsk Region in 2006-2012

Figure 2-2. Distributed and undistributed oil and gas stock of Republic of Sakha (Yakutia)

Figure 3-1. Proportion of oil and gas production in Eastern Siberia in Rosneft’s total production in 2005-
2012, % of the company’s total production

Figure 3-2. Oil and gas production by ZAO Petrosakh, 2007-2012

Figure 3-3. Rosneft share of oil and gas production in the Far East of the total production

Figure 3-4. Oil and gas production at the Sakhalin-1 project (Rosneft’s net share)

Figure 4-1. Projected oil production at the Vankor field, million tons

Figure 4-2. Changes in oil production growth at the Talakanskoye and satellite fields: 2007-2020, Mt

Figure 4-3. Projected oil production at the Verkhnechonskoye field: 2007-2020, Mt

Figure 4-4. Oil well completions at the Verkhnechonskoye field

Figure 4-5. Liquids hydrocarbon production by IOC: 2001-2012, thousands of toe

Figure 4-6. Forecasted hydrocarbon production at Yaraktinsky project, thousands of tons: 2012-2020. Figure 4-7. Planned drilling of exploration wells at Srednebotuobinskoye field in 2012-2015 , number of
wells

Figure 4-8. Oil production at the Dulisma field, thousand tons, 2006-2012

Figure 4-9. Hydrocarbon production at Sakhalin-1 project

Figure 4-10. Oil and gas production at Sakhalin-2

Figure 5-1. Dynamics of oil production in the Eastern Siberia and Republic Sakha (Yakutia), mln tons
Figure 5-2. Changes in gas production (natural gas + associated gas) in Eastern Siberia and Republic of
Sakha (Yakutia), 2008-2012 , mln cu m

Figure 5-3. Predicted oil production in Eastern Siberia and the Republic of Sakha (Yakutia) from 2013
through 2022: high scenario, Mt.

Figure 5-4. Predicted oil production in Eastern Siberia and the Republic of Sakha (Yakutia) from 2013
through 2022: moderate scenario, Mt

Figure 5-5. Forecast of liquid hydrocarbons production at Sakhalin (on- and offshore) in 2013-2022 (high
scenario), mln tons

Figure 5-6. Forecast of liquid hydrocarbons production at Sakhalin (on- and offshore) in 2013-2022 (low
scenario), mln tons

Figure 5-7. Forecast of gas production at Sakhalin in 2013-2022 (high scenario), bcm

Figure 5-8. Forecast of gas production at Sakhalin in 2013-2022 (moderate scenario),

Figure 6-1. Energy consumption dynamics in 1990-2012, Mtoe

Figure 6-2. Energy consumption growth rates across various regions of the world, a comparison of 1990
and 2012 data , %

Figure 6-3. Changes in energy consumption in major APR countries in 1965-2012, Mtoe

Figure 6-4. Dynamics of energy sources used in China in 1957-2010, %

Figure 6-5. LNG supply to China by exporter country in 2010 – 2012, billion cubic meters

Figure 6-6. Energy consumption dynamics in South Korea (Mt of oil equivalent) in 1965-2012

Figure 6-7. Energy consumption in South Korea in 2009-2012 , Mtoe

Figure 6-8. Dynamics of Oil and Gas Consumption in South Korea (1987-2012)

Figure 6-9. Natural gas imports to South Korea in 2010-2012, billion cubic meters

Figure 6-10. Structure of Energy Consumption in Japan in 2009-2012, Mtoe.

Figure 6-11. Gas Imports to Japan in 2011-2012, bcm

Figure 6-12. Export shipments of crude oil from Kozmino Seaport in 2010-2013 , Mt

Figure 6-13. Qualitative Characteristics of ESPO Blend as Compared to Other Oil Brands

Table 2-1. Hydrocarbon reserves and resources of the Irkutsk region (as of January 1, 2012)

Table 2-2. 2D and 3D seismic surveys in the Irkutsk Region in 2006-2012

Table 2-3. Explored hydrocarbon reserves in the Irkutsk Region (as of January 01, 2012)

Table 2-4. Hydrocarbon reserves and resources of Krasnoyarsk territory (as of the beginning of 2012) Consolidated data on exploration meters drilled in the Krasnoyarsk territory have not been published

Table 2-5. Explored hydrocarbon reserves of Krasnoyarsk territory, by field (as of January 01, 2012)

Table 2-6. Hydrocarbon Reserves and Resources of the Republic of Sakha (Yakutia) (as of the beginning
of 2012).

Table 2-7. Explored hydrocarbon reserves of Republic of Sakha /Yakutia, by field (as of January 01,
2012)

Table 2-8. Hydrocarbon reserves and resources of the Sakhalin region (as of the beginning of 2012). Table 2-9. Recoverable hydrocarbon reserves in the mainland portion of the Sakhalin Region (as of
January 1, 2012)

Table 3-1. Gazprom’s recoverable reserves in Eastern Siberia (Jan 01, 2012)

Table 3-2. Gazprom Group’s total ABC1 hydrocarbon reserves within the Siberian Federal District in
2008-2012, as of December 31 of the current year

Table 3-3. Gazprom Neft’s hydrocarbon reserves of in Eastern Siberia (as of January 1, 2012)

Table 3-4. Recoverable hydrocarbon reserves at Irkutsk Oil Company fields in Eastern Siberia (as of
January 1, 2012)

Table 3-5. Irkutsk Oil Company license areas

Table 3-6. Petromir fields’ reserves in Eastern Siberia, January 1, 2012

Table 3-7. Recoverable hydrocarbon reserves of Rosneft fields, including the reserves of TNK-BP,
Verkhnechonskneftegaz and Taas Yuryakh Neftegazdobycha, in Eastern Siberia (as of January 1, 2012)
Table 3-8. Forecast resources of Rosneft license blocks adjacent to the Vankor field (as of January 2012)
Table 3-9. Predicted resources at Rosneft licensed sites in Irkutsk Region and Evenkiya

Table 3-10. Rosneft exploration activities in Eastern Siberia, 2005-2010

Table 3-11. Rosneft planned exploration in Eastern Siberia

Table 3-12. Field development by Rosneft consolidated subsidiaries and affiliated companies in Eastern
Siberia

Table 3-13. Rosneft production of oil and gas in Eastern Siberia in Eastern Siberia, 2005-2012

Table 3-14. TNK-BP License areas in Eastern Siberia (as of the beginning of 2012)

Table 3-15. Reserves at Slavneft fields and license areas in Krasnoyarsk Territory, as of January 1, 2012
Table 3-16. Resources of Slavneft license areas, 2010

Table 3-17. Slavneft geological exploration in Krasnoyarsk Territory in 2009-2012

Table 3-18. Surgutneftegaz resources in Eastern Siberia as of January 1, 2012

Table 3-19. Gazprom Group’s cumulative ABC1 hydrocarbon reserves in the Far Eastern Federal District
in 2005-2012, as of December 31 of the current year

Table 3-20. Oil and gas production by Gazprom Group in Siberia and in the Russian Far East

Table 3-21. Recoverable hydrocarbon reserves in the Okruzhnoye field (as of January 1, 2012)

Table 3-22. Oil and gas production by ZAO Petrosakh, 2007-2012

Table 3-23. RN-Sakhalinmorneftegaz reserves, as of December 31, 2010, per the PRMS,
DeGolyer&MacNaughton classification

Table 3-24. Recoverable hydrocarbon reserves in Rosneft fields, including reserves of TNK-BP,
Verkhnechonskneftegaz and Taas Yuryakh Neftegazdobycha, in the Russian Far East (as of January 1,
2012)

Table 3-25. Rosneft – Sakhalinmorneftegaz operational performance

Table 3-26. Rosneft oil and gas production in the Far-East

Table 3-27. Reserves in the Sakhalin-1 project (Rosneft’s share as of Dec. 31, 2010, per the PRMS,
DeGolyer&MacNaughton classification)

Table 3-28. Operational performance of the Sakhalin-1 project

Table 3-29. Sea of Okhotsk offshore projects with foreign participation

Table 3-30. Blocks to be allocated for geological study in 2013 in Eastern Siberia and Russian Far East
Table 3-31. Results of auctions for subsoil use rights held by Rosnedra from January 1, 2012, to October
1, 2013

Table 3-32. 2013-2014 auction plans for subsoil blocks holding hydrocarbon reserves and resources in
Eastern Siberia and in the Russian Far East

Table 4-1. Recoverable hydrocarbon reserves of Vankorneft (as of January 1, 2012)

Table 4-2. The main facilities of the production infrastructure at the Vankor Field (as of Q4 2013)

Table 4-3. Recoverable hydrocarbon reserves of Vostsibneftegaz’s Yurubcheno-Tokhomskoye and
Agaleyevskoye fields (as of January 1, 2012)

Table 4-4. Hydrocarbon reserves at the Kuyumbinskoye field (as of January 1, 2012)

Table 4-5. Recoverable hydrocarbon reserves at the Talakan and adjacent fields (as of January 1, 2012) Table 4-6. Hydrocarbon reserves at the Verkhnechonskoye field (as of January 1, 2012)

Table 4-7. Hydrocarbon reserves at the Suzunskoye field (as of January 1, 2012)

Table 4-8. Hydrocarbon reserves at the Tagulskoye field (as of January 1, 2012)

Table 4-9. Recoverable reserves at Yaraktinskoye fields (as of January 1, 2012)

Table 4-10. Proven hydrocarbon reserves at the Srednebotuobinskoye field (as of January 1, 2012)

Table 4-11. Recoverable hydrocarbon reserves at the Dulisminskoye field (as of January 1, 2012)

Table 4-12. Hydrocarbon reserves at Angaro-Lenskoye and Levoberezhnoye fields (as of January 1,
2011)

Table 4-13. Hydrocarbon reserves at Chayandinskoye field (as of January 1, 2012)

Table 4-14. Sakhalin-1 hydrocarbon reserves (DeGolyer & MacNaughton, as of December 31, 2010)

Table 4-15. Sakhalin-1 operating activities

Table 4-16. Sakhalin-2 hydrocarbon reserves (as of January 01, 2009))

Table 4-17. Hydrocarbon production at Sakhalin-2

Table 4-18. Exploration activities at the Veninsky block of Sakhalin-3

Table 4-19. Exploration activities at the Kaygano-Vasyukansky block

Table 5-1. Oil producers in Eastern Siberia and the Republic of Sakha (Yakutia), thousand tons

Table 5-2. Major producers of gas in Eastern Siberia and the Republic of Sakha (Yakutia), mln cu m

Table 5-3. Oil producers in Sakhalin, thousand tons, 2005-2012

Table 5-4. Major producers of gas in the Far East (Sakhalin), mln cu m, 2008-20012

Table 5-5. Predicted oil production according to the Energy Strategy of Russia through 2030, Mt

Table 5-6. Predicted gas production in Eastern Siberia and in the Far East according to the Energy
Strategy of Russia through 2030

Table 6-1. Changes in energy consumption in 1990-2012, Mtoe

Table 6-2. Hydrocarbon reserves and production in China, 2012

Table 6-3. Energy production and consumption balance in China, mln tons of oil equivalent, 1990-2011
Table 6-4. Production and Consumption of Gas in China, bcm

Table 6-5. Oil imports to China in 2001-2012 , Mt

Map 2-1. Oil- and gas- bearing regions of Irkutsk region

Map 2-2. Oil and Gas fields of Irkutsk region

Map 2-3. Oil and Gas Resources of Krasnoyarsk territory

Map 2-4. Map of Far Eastern Federal District

Map 2-5. Oil and Gas Fields of Sakhalin

Map 3-1. Rosneft licensed sites adjacent to the Vankor field

Map 3-2. Rosneft fields in Krasnoyarsk Territory and Irkutsk Region

Map 3-3. Regional breakdown of Surgutneftegaz licenses (as of the beginning of 2013)

Map 3-4. Plan of resources development in the Eastern Siberia and Far East of Russia

Map 3-5. Rosneft’s main projects in the Far East

Map 4-1. Purpe-Samotlor Oil Pipeline

Map 4-2. Planed oil transportation from the Yurubcheno-Tokhomskaya Zone

Map 4-3. Oil export from Talakanskoye field

Map 4-4. Verkhnechonsky project

Map 4-5. Bolshekhetskaya Depression fields and infrastructure

Map 4-6. Srednebotuobinskoye field

Map 4-7. Map of Kamchatka Teritory gasification

Map 5-1. Potential gas production centers

Map 5-2. Planned gas transportation infrastructure in the Irkutsk Region

Map 6-1. ESPO route