The participants of Kharyaga PSA have held the events dedicated to the anniversary of the project

The participants of Kharyaga PSA have held the events dedicated to the anniversary of the project

On December 20, 2019, the participants of the Kharyaga field development project held a number of events dedicated to the 20-th anniversary of the Kharyaga Production Sharing Agreement effective date.

The Russian party was represented by the General Director of Zarubezhneft Sergey Kudryashov, the head of the subsidiary entity ZARUBEZHNEFT-Production Kharyaga LLC (operator) Oleg Akimov, vice-governors of the Nenets Autonomous Area Ivan Boltenkov and Alexander Lider, the head of the NAA Administration Dmitriy Rozhin, the head of Nenets Oil Company JSC Farid Verdiev. The French party was represented by the head of Total corporation in Russia Arnaud Le Foll, the vice-president of Equinor Russia SA Erik Strand Tellefsen represented the Norwegian party.

In accordance with the event’s agenda, the partners have visited the production facilities of the Kharyaga field where they have participated in the testing chemical analysis laboratory grand opening ceremony. The heads of the Kharyaga PSA partner companies have given an employee of ZARUBEZHNEFT-Production Kharyaga an award for the achievements in the area of HSE.

In course of the visit to the production facilities the achieved results have been reviewed, special attention was paid to the issues of occupational health, industrial safety and social responsibility of Zarubezhneft Group of Companies.

So, under the results of 2018:

  • The Company managed to stabilize the production at the level of 1.5 MM tons/year owing to the performance of the necessary geological and technical measures and optimization of the operation of wells and submersible equipment, having fulfilled the hydrocarbons production plan early. The accumulated production is over 21 MM tons.
  • The operator carries out active operations to integrate the enhanced oil recovery methods (high-volume acid treatment with application of diverters; polymer bank injection). Therefore, in 2018 the incremental production owing to the application of the flow diverting technologies amounted to more than 55 thousand tons of oil.
  • The company continues its efforts in studying and preparing for the Permian low-permeability deposits drilling for the purpose of maintaining the production level and improving the profitability of the project. At the moment two geological structures associated with Devonian and Permian deposits are in development.
  • The implementation of a complex of measures allowed decreasing the project OPEX by 35% to 4.1 USD/bbl, including owing to the transfer to the power supply from the power grids.
  • A Program of environment protection measures aimed at conserving the biodiversity at the license area and reducing the negative impact on the environment was developed and integrated.
  • The operator implements the Vision Zero concept preventing accidents which could cause harm to the people, environment and assets of the company guided by the Company’s policy in the area of occupational health, industrial safety, environment protection, security and social responsibility.

The performed measures have positive influence on the sustainable receipt of the revenues from the Kharyaga PSA implementation by the state. The cumulative proceeds to the budgetary system of the Russian Federation during the project implementation period exceeded 4 billion USD.

Active participation of the partners and the state in the fulfillment of production tasks and comprehensive support allow the operator to develop a long-term strategy aimed at maintaining sustainable production and steady profitability of the project.

“It goes without saying, that the 20-th anniversary of the Kharyaga production sharing agreement effective date is truly a special date for the Nenets Autonomous Area. The larger part of the Area’s budget profits originate from the Kharyaga PSA. I believe that we will manage to maintain the economic attractiveness of the project for all of its participants until the very end of the Agreement’s term”, - said the Governor of the Nenets Autonomous Area Alexander Tsybulskiy.

For many years the investors of the Kharyaga PSA have been reliable partners of the Nenets Autonomous Area in funding and implementation of social project in the Area. As part of its trip, the delegation visited the Children School of Arts of the Nenets Autonomous Area where it attended a concert organized by the teachers and students of the school. The partners have highly appreciated the music played on a piano given to school in 2018 as a present. To keep up with the tradition they gave the school new musical instruments. The visit program ended with a visit to “Roboquantum” class opened in 2018 owing to the support of the partners.

The investors of Kharyaga PSA have highly valued the achieved results:

“The year 2018 has opened us a way to new prospects associated with the extension of the Kharyaga PSA until the end of 2031. The extension of the Agreement gives us a direction to go forward. We will make step by step towards our goal maintaining and improving the economical attractiveness of the project for the state and the Investor”, - said the General Director of Zarubezhneft JSC Sergey Kudryashov.

The vice-president of Equinor Russia AS Erik Strand Tellefsen said on his part: “Equinor is a reliable investor of the Kharyaga PSA, and it shall continue its beneficial cooperation with Zarubezhneft and the project partners to maximize the project efficiency both for Russia and the investors in the nearest years”.
“Participation in the Kharyaga PSA has significant importance for Total. This project is an important part of the corporation’s history in Russia. High performance in 2018 is a result of efficient interaction of the partners and the state. We are ready to keep on providing maximum support to the project”, - said the head of Total corporation in Russia Arnaud Le Foll.

“In the short time the Operator managed to arrange comprehensive operations for construction and commissioning of the ongoing construction assets. Some serious progress was achieved in term of recommencing the Gas program operation, and we have witnessed it all during our field trip. I wish us all further efficient progress with the development of the Kharyaga field!”, - noted the general director of the Nenets Oil Company JSC Farid Verdiev.

“A strategically important area – is further drilling at the field for the account of the follow-up exploration of the Fransian horizon. We are up for large-scale hard work with the capital construction facilities. The main task is the start-up of the stages one and two of the Gas program as well as the construction and commissioning of the tank farm”, - summarized the head of ZARUBEZHNEFT-Production Kharyaga LLC Oleg Akimov.

For reference:
Kharyaga PSA is one of the three projects operating in Russia being implemented under production sharing terms (PSA). The Agreement came into effect in January 1999 and was made for 20 years with possible extension by 13 years. The production volume of Kharyaga PSA amounts to 1.5 million tons annually, and since 1999 the accumulated production has exceeded 21 million tons of oil. In July 2018 the participant singed the Addendums to the Kharyaga field development and oil production agreement on production sharing terms, according to which the term of the Agreement was extended till December 31, 2013.
The parties of the agreement is the Russian Federation represented by its Government and the Administration of the Nenets Autonomous Area as well as the Investor. Starting 2016 the shares of the participants were distributed as follows: Zarubezhneft Group of Companies (operator) – 40%, Statoil Kharyaga AS – 30%, Total E&P Rusie – 20%, Nenets Oil Company JSC – 10%.