Gazprom Neft doubles production of Bazhenov oil

Gazprom Neft doubles production of Bazhenov oil

Gazprom Neft cut its non-traditional oil production costs in 2020, taking this down to RUB 13,000 per tonne and delivering a 20% reduction on 2019 costs. Production costs are expected to reach RUB 8,500 per tonne by the end of 2021, allowing the company to start commercial production of Bazhenov strata at fields with developed infrastructure already in place.

Gazpromneft-Technology Partnerships (the company’s industrial integration hub, previously known as the Bazhen Technology Centre) delivered a 78% year-on-year increase in production at Bazhenov strata in 2020, reaching 100,000 tonnes — new technological solutions for developing non-traditional hydrocarbons having allowed the business to more than halve the costs of producing Bazhenov oil, from RUB30,000 at the start of the project in 2017 to RUB13,000 by 2021.*

2020 also saw the construction of a high-tech well involving a two-kilometre horizontal shaft, 30-stage hydraulic fracking, and high-speed fluid injection (of up to 16 cubic metres per minute) at the Palyanovskoye field in the Khanty-Mansi Autonomous Okrug—Yugra — this first time all operations on such complex construction have been undertaken using exclusively Russian-produced equipment.**

Gazprom Neft is expecting to complete its testing of a range of solutions for the viable production of Bazhenov oil in 2021. Eight wells are to be drilled at the Palyanovskoye field for final confirmation of the effectiveness of commercial technology for developing non-traditional reserves. Completing this experiment, and reducing non-traditional oil production costs to RUB8,500 per tonne, will make it possible for viable production of Bazhenov hydrocarbons to commence at West Siberian fields with infrastructure already in place.

"We have come a long way in being able to create the impetus for developing "hard-to-recover“’ oil, as well as halving production costs — at a time, moreover, when import-substitution levels in building the high-tech wells necessary for developing non-traditional reserves reached more than 95%. Many of the solutions developed with our involvement are unparalleled throughout the industry. Deploying a commercial technology for developing the Bazhenov Formation will not only make it possible to produce an extra one million tonnes per year from these reserves by 2025, but will also open up access to other “tight” reserves in Western Siberia“, – Director for Technological Development, Gazprom Neft Alexey Vashkevich.

“I can say, with some confidence, that the key outcome of 2020 was creating a commercial vision of technology for working with the Bazhenov Formation. 2020, in fact, saw us moving from pilot-testing to production-standard solutions — to actual deployment. We have put in place a pool of Russian companies and partners to provide oil services — on which basis, we have crossed an important watershed: we have proved it will be possible to develop the Bazhenov Formation using domestic technologies. Our job now is to confirm the viability of Russian technological know-how so that we can start commercial production of hard-to-recover Bazhenov oil in 2022”. – Director General, Gazpromneft — Technology Partnerships Kirill Strizhnev.

Reference

* The main indicator of a technology’s viability — the ultimate drilling cost (UDC) — means the total cumulative costs involved in drilling a horizontal well involving multistage fracking, per tonne of cumulative oil production.

** All equipment was manufactured as part of the national “Bazhenov” project — the Ministry of Energy of the Russian Federation having assigned national status to this project (on developing a range of domestic technologies and high-tech equipment for the viable development of the Bazhenov Formation) in 2017. The configuration of this well ensured maximum efficiency in developing non-traditional strata, and could become the main commercial technology in developing Bazhenov reserves.

*** Import substitution at this experimental well reached 95%. Russian equipment — allowing unlimited multistage fracking — was used in well stimulation at the Bazhenov Formation for the first time in 2020. Testing of the key elements of these Russian technologies — measuring while drilling (MWD), a rotation-while-cementing linger -hanger, xanthan gum-based fracking fluid, and cable-delivered feed-through (through-hole), composite, soluble and blind plugs — is now complete.

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