The Naryanmarneftegaz has been the operator company of the grand Yuzhno-Khilchuyu project and the Varandey oil terminal in the Nenets Autonomous Okrug. The company was established on a 70-30 percent basis with ConocoPhillips and constituted a core part of the two companies’ extensive cooperation.
In August 2012, Lukoil bought ConocoPhillips’ part of Naryanmarneftegaz following the U.S. company’s exit from Russia. According to Prime.ru, Lukoil cashed out $600 million for the 30 percent stake.
As previously reported, the Naryanmarneftegaz has despite the successful development of the Yuzhno-Khilchuyu field and the Varandey terminal, been a major disappointment for Lukoil. Annual production estimates for the field were originally more than seven million tons. However, a major reduction in field reserve estimates have resulted in a drop in production to about 1,5 million tons.
With 100 percent control in Naryanmarneftegaz, Lukoil is now free to merge it with Lukoil Komi, the biggest company in the Komi Republic and the main producer in the –oil-rich Timan-Pechora province.