Production and Development
THE COMPANY PRODUCED 122 MILLION TONS OF CRUDE OIL AND GAS CONDENSATE IN 2012, WHICH IS 2.8% MORE THAN IN THE PREVIOUS YEAR.
Rosneft has twelve fully consolidated production and development enterprises, which produce crude oil in Western Siberia, Eastern Siberia, Timan-Pechora, Central Russia, the southern part of European Russia, and in the Russian Far East.
The Company also has a 20% stake in the Sakhalin-1 project (accounted on proportionate consolidation basis). In addition, Rosneft participates in four production joint ventures (accounted on equity basis). They are: Tomskneft (50%), Udmurtneft (49.54%), Polar Lights (50%), and Verkhnechonskneftegaz (25.94%).
Company efforts in 2012 were focused on measures to optimize operating and capital expenses, achievement of production targets in the Vankor project, and implementation of programs for improvement of energy efficiency.
The company produced 122 million tons of crude oil and gas condensate in 2012, which is 2.8% more than in the previous year. The increase was mainly driven by ramp-up of production at the Vankor and Verkhnechonskoe fields in Eastern Siberia, and high efficiency of wellbore intervention at the fields in Central Russia and Western Siberia.
In 2012 output of natural and associated gas (after flaring) was 16.39 bcm, which is 28.1% more than in the previous year. Production increase is associated with creation of ITERA company (Rosneft’s share is 51%), seamless operation of compressor station at the Luginetskoe field of Tomskneft, oil production increase at the Vankor and Priobskoe fields, compressor stations commissioning at the Komsomolskoe field in September 2011, and gas pipeline construction to the fields of Polar Lights.
Company efforts in 2012 were focused on improving operating efficiency of producing assets. Upstream production and operating expenses increased by 3.8% to 73.4 billion rubles. The Company managed to rein in rising costs below the inflation rate through cost saving measures.
Production drilling by Rosneft subsidiaries (excluding the Sakhalin-1 project) was 3,936 thousand meters. A total of 1,126 oil wells were completed and brought into production, which is 11.4% more than in 2011. Production from new wells was 9.41 million tons of oil and gas condensate and 0.7 bcm of gas.
The average daily flow rate per new production well was 56.4 tons, and the average flow rate for all production wells was 18.2 tons, which is 4.1% more than in the previous year.
Lower flow rate of new wells in 2011 is coming from natural quality loss of drilled reserves in Western Siberia, and artificial limiting of production rate at the Vankor field. The average flow rate increase is associated with growing number of new wells, and efficient management of mature well stock.
In 2012 cumulative development costs of Rosneft’s subsidiaries totaled 276 billion rubles, which is 6% more than in 2011.