Mubadala Petroleum, the UAE-based leading oil and gas exploration and production company, and the Russian Direct Investment Fund (RDIF) have formed a joint venture Gazprom Neft to develop several oil fields in the Tomsk and Omsk regions of Siberia.

RDIF and Mubadala Petroleum will acquire a 49 per cent equity stake in Gazpromneft-Vostok, the operator of the fields. Mubadala Petroleum will hold a 44 per cent interest and RDIF will hold the remaining 5 per cent interest. Completion of the transaction is subject to customary regulatory and internal approvals.

The corresponding agreement was announced today (May 24) at the St. Petersburg International Economic Forum.

 Proved and probable reserves of hydrocarbons in the fields are about 40 million tons (approx. 300 million barrels). Oil production was 1.6 million tons in 2017 (approx. 33,000 barrels per day). The produced oil is sold into Russian domestic and international markets, and transported primarily through the Eastern Siberia-Pacific Ocean oil pipeline.

This project is Mubadala Petroleum’s first investment in the Russian oil and gas sector.

Kirill Dmitriev, CEO of the Russian Direct Investment Fund (RDIF), said: "RDIF and Mubadala Petroleum investment in a joint venture with Gazprom Neft brings the experience and expertise of our Middle East partners to the Russian oil and gas sector. RDIF, Mubadala Petroleum and Gazprom Neft see this project as the first step in creating a consortium to pursue further significant investments in the sector."

 Dr Bakheet Al Katheeri, CEO of Mubadala Petroleum, said: "This investment marks a further step in our long-term growth strategy and sees Mubadala Petroleum’s entry into Russia. Through this new partnership with RDIF and Gazprom Neft, one of Russia’s leading operators, we will not only share but also further build on our expertise and capabilities in oil and gas while adding significant oil production to our existing oil and gas portfolio.”

Alexander Dyukov, chairman of Gazprom Neft, said: "Our company has vast experience in setting up joint ventures with international partners, but for the first time one of the largest investment funds of the UAE has invested in the Russian assets of Gazprom Neft.”

“This transaction is of great importance not only for our company, but for the whole industry. The main advantage of Gazpromneft-Vostok is the development of technologies for the search and extraction of hydrocarbons from the pre-Jurassic complex. And it is important for us that our partners believed not only in the present, but also in the future of this asset. The task of beginning cost-effective development of Paleozoic stocks can be more effectively solved within the framework of partnership, combining technological and financial resources,” he added. – TradeArabia News Service