New Gazprom Neft projects profitable with $30/barrel, old ineffective at $15/barrel
MOSCOW. Feb 2 (Interfax) - The new projects, which Gazprom Neft is planning to increase, will be profitable with an oil price of $30 per barrel, the Russian oil company's CFO, Alexei Yankevich said during Gazprom's Investors Day.
"Yes, all forward-looking economics taking into account future costs on all projects are positive at $30," Yankevich said.
Answering a question about the break-even point, he said: "As concerns prices, at which it will be advantageous to not produce, then for current assets this is less than $15 per barrel."
Yankevich said that the company is planning growth of oil production in 2016 and 2017, not naming concrete figures.
He stressed that the company affirms its goal of increasing production to 100 million tonnes.
Due to the current unfavourable situation, the company is of course optimising the implementation schedule for projects, including foreign ones, Yankevich said. In Russia, Gazprom Neft will focus on projects that are at the highest stage of readiness and are strategically important, and those that can provide a quick return.
"The goal of 100 million tonnes no longer seems so fantastical as it did at the beginning," Yankevich said. The main drivers of production are Severenergia, the Prirazlomnoye and Novoport fields, the Messoyakhskaya group of fields, and fields in the Orenburg cluster, as well as the use of new technology at brownfield projects that make it possible to stabilize production.
He said the assembly of an Arctic terminal to offload oil from the Novoport field with capacity of 8.5 million tonnes was completed in 2015. Comprehensive testing of the terminal will begin in March, after which it will go into operation. The field has received a break on the natural resource extraction tax and the export duty, he added.
At the end of 2016, with the completion of an oil pipeline from the Messoyakhskaya group to the Zapolyarye-Purpe oil pipeline, "everything will be ready for the commercial launch of the Vostochno- Messoyakhskoye field," Yankevich said.
He also said that the company's lifting cost, not including geological and technological measures, grew by no more than 3% in the first nine months of 2015, "and for 2015 we expect to report growth rates significantly lower than inflation, and for a number of unit costs we even achieved a reduction in ruble terms.
Yankevich also said that on January 10 the company received the fourth delivery of compensation oil on the Badra project in Iraq.