"As a result of the transaction, the parties are going to create a vertically integrated system of cooperation. The Chinese company acquires a stake in one of the largest producing fields in Eastern Siberia with developed infrastructure and access to the ESPO pipeline while Rosneft gets an opportunity to enter China’s prospective domestic gas market, including end users via swap gas supplies," Rosneft said in a press release.
The project is valued at $3.2 per barrel of hydrocarbon reserves and is category 2P calculated on the PRMS, Rosneft noted.
"The Implementation of the project of Beijing Gas corporation joining the Verkhnechonneftegaz enterprise will allow us to enter the rapidly growing Chinese market. The eastern direction is one of the most prospective and strategically important for us. Cooperation with Beijing Gas is a good example of Rosneft's integral approach, which contributes to the creation of a reliable energy bridge between Russia and Asia-Pacific countries," Rosneft CEO Igor Sechin said, commenting on the deal.
Verkhnechonskneftegaz holds a license to develop the Verkhnechonsk oil and gas condensate field in Eastern Siberia. The field's current recoverable reserves (C1+C2 category) are 173 million tonnes of oil and gas condensate and 115 billion cubic meters of gas, so it qualifies as the subsoil area of federal significance. The company currently produces 8.5 million tonnes of oil per year on the field.