EuroChem Group AG (Zug, Switzerland; www.eurochemgroup.com), a leading global fertilizer company, announces the sale of Severneft-Urengoy to Novatek PJSC, one of the largest independent natural gas producers in Russia. The price and terms of the deal have not been disclosed.
Severneft-Urengoy, a gas exploration and production company operating in the Yamal-Nenets Autonomous Area in Russia, was acquired by EuroChem in 2012 for $403 million. The total resource potential of the site, according to the Russian classification (categories C1, C2, C3) as of December 31, 2016, is 918 million barrels of oil equivalent of hydrocarbons.
After that acquisition, EuroChem formed a dedicated Oil and Gas division, which included several other assets in Russia and Kazakhstan. The sale of Severneft-Urengoy will enable the Group to focus on the exploration and subsequent development of gas condensate fields in the Astrakhan and Saratov regions in Russia, and the Kamenkovsky gas field in Kazakhstan, to better meet EuroChem’s internal gas needs. While these gas fields continue to be developed, EuroChem will buy gas from unaffiliated parties.
Dmitry Strezhnev, EuroChem’s CEO, comments: “The sale of Severneft-Urengoy will streamline this business division and improve its profitability down the line, especially once our Astrakhan gas field is operational and supplying gas to our production facilities in Russia.”