Tatneft and Shell Form Partnership to Develop Heavy Oil

Tatneft and Shell Exploration concluded transactions on a partnership agreement that was signed by Tatneft General Director Shafagat F. Takhautdinov and Russia Shell Chairman Chris Finlayson in the presence of R.N. Minnikhanov, Prime Minister of Tatarstan and Tatneft Chairman of the Board.

The agreement specifies that the two companies devise a program for heavy oil development in Tatarstan. A feasibility study will be conducted to assess technologies for extraction and processing heavy oil, which Tatneft currently holds exploration and production licenses.

As part of the agreement, Tatneft and Shell will consider establishing a joint venture or using other forms of cooperation. This is a positive step for future joint activities, including the acquisition of new licenses for hydrocarbon exploration in Tatarstan and other Russian locations.

Shafagat F. Takhautdinov commented, "The oilmen of Tatarstan celebrated the production of three billion tonnes of oil this year. We are confident that production of the heavy oil will give a new impetus to the development of the oil-producing industry in Tatarstan and will enable us to make significant strides toward reaching a level of four billion tonnes of oil production in our Republic. Tatneft has 30 years of experience in heavy oil (bitumen) development in Tatarstan and has tested multiple technologies during this period. Cooperation with Shell, which is known for its advanced technologies for development of heavy oil worldwide, will combine experience accumulated by both companies and will become an important step in implementing this project".

Chris Finlayson said: “Shell has long been at the forefront of developing new technology to extract and process heavy oil. In a variety of places where we operate -- including the USA, Canada and Oman -- our production techniques are opening up vast energy resources. We look forward to our cooperation with one of Russia’s largest oil and gas companies and hope that this partnership will build Tatneft’s position as a leader in heavy oil development in Russia”.