Mubadala, Gazprom, RDIF Complete Transaction to Develop Oil Fields in Western Siberia

Thursday, 6 September, 2018 - 11:30
Abu Dhabi- Asharq Al-Awsat

UAE’s Mubadala Petroleum, Gazprom Neft and the Russian Direct Investment Fund (RDIF), the sovereign wealth fund of the Russian Federation, announced the completion of a deal on investment in oil production in Western Siberia.

Gazprom Neft has now completed its sale of a 49 percent interest in Gazpromneft-Vostok, operator of 13 fields, to Mubadala Petroleum and RDIF.

With the completion of this transaction, Gazprom now holds a 51 percent interest in the joint venture, with Mubadala and RDIF holding 44 percent and 5 percent equity, respectively.

The Gazpromneft-Vostok joint venture represents Mubadala’s first investment in the Russian oil and gas sector. The partners will determine the long-term strategy of the joint venture, focusing on efficiency in exploration and production activities at the fields as well as at pre-Jurassic hydrocarbon deposits.

Gazprom Neft CEO Alexander Dyukov, commented on the completion saying this investment by one of Mubadala Petroleum in a Russian asset is certainly a landmark event for the industry.

“Through our partnership with Mubadala Petroleum and RDIF we will not only be focussing on improving the current business performance of Gazpromneft-Vostok, but will also be looking for new opportunities to develop it further,” indicated Dyukov.

He indicated that Gazprom considers Mubadala and RDIF as strategic partners, and expect to deliver mutually beneficial results from combining their financial and technological resources.

For his part, Mubadala Petroleum CEO, Bakheet al-Katheeri, also indicated that an acquisition of a 44-percent interest in the Gazpromneft-Vostok joint venture is another important step in Mubadala’s drive for sustainable and profitable growth, marking entry into Russia and adding valuable oil production to its existing portfolio.

“Partnering with Gazprom Neft, a leading Russian operator, and RDIF will not only provide us with significant co-investment opportunities, but will also further develop our own oil and gas expertise and capabilities, as well as exploration and production technologies,” asserted Katheeri.

CEO of the Russian Direct Investment Fund (RDIF), Kirill Dmitriev welcomed Mubadala’s first investment in Russia.

“We expect this transaction to become the basis for further investments by the consortium created by RDIF, Mubadala Petroleum and Gazprom Neft,” he added.

Proved and probable hydrocarbons at Gazpromneft-Vostok fields stand at approximately 40 million tons.

In 2017, oil production totaled 1.6 million tonnes. This production crude is sold into the Russian domestic and international markets, transported primarily through the Eastern Siberia—Pacific Ocean oil pipeline, as well as being sent for processing at Russian refineries.

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