Moscow / Kassel. The joint venture of Gazprom and Wintershall Holding AG – ZAO Achimgaz – launched test production at section 1А of Achimovskoe formations at Urengoi gas and oil condensate field in Yamal-Nenets autonomous district.

At present a complex gas treatment facility and three gas condensate wells are operating at the section providing daily gas production of 2.3 million cubic meters. It is planned to produce by the end of 2008 531 million cubic meters of gas and 188.7 thousand tons of condensate.

“A new quality stage in the expansion of the resource base and of Gazprom’s production capabilities has begun today. For the first time in the history of the company we began producing gas jointly with our German partners from Achimovskoe formations, which are much more difficult for production than traditional Cenomanian and Valanginian.

Moreover, it was at the moment of Achimgaz creation that Gazprom for the first time applied the new principle of cooperation with foreign partners: the joint venture receives profit from the implementation of the project, while Gazprom holds the field license. It is exactly this principle, which comprises the model for Gazprom in building relations with foreign companies. The result accomplished by our joint venture today confirms the correctness of our choice and the efficiency of such a business model,” said Gazprom CEO Alexei Miller.

“The successful partnership established in gas trading with Gazprom was consequently extended to the production of natural gas in 2003. In ZAO Achimgaz the know-how and expertise of the two partners complement each other perfectly for the difficult-to-recover Achimov formation in Western Siberia: Gazprom specializes in producing gas in the Extreme North, while Wintershall has many years of experience working in challenging geological conditions. In this ideal partnership risks and rewards are equally shared.

With the joint venture Achimgaz BASF/Wintershall and Gazprom extend their more than 17-year-old successful co-operation along the entire value chain, stretching from the gas wells in Siberia over pipelines and a gas distribution and trading joint venture to the customers in Europe”, said Dr. Hans-Ulrich Engel, member of the Board of Executive Directors of BASF SE and chairman of the Supervising Council of Wintershall Holding AG.

Background:

Achimgaz joint venture was created on a parity basis by Gazprom and Wintershall Holding AG (100-percent subsidiary of BASF SE Concern) in July 2003. The venture was launched to develop the first part of Achimovskoe formations of the Urengoi gas and oil condensate field. The license for the Urengoi field is held by Gazprom Dobycha Urengoi Company (100-percent subsidiary of Gazprom).

During the whole production period at the section (43 years) it is planned to produce close to 200 billion cubic meters of gas and 40 million tons of condensate. The projected annual plateau production comprises about 7,5 billion cubic meters of gas and 2.8 million tons of condensate.

The joint enterprise is the project’s operator and owner of the infrastructure built in the section. All rights on the products and on marketing belong to OAO “Gazprom”. The partners will share profits according to their interest in the project – 50% and 50%.

Geological prospecting confirmed the productivity of Achimovskoe deposits on a sufficiently wide territory of Nadym-Pur-Tazov region. The main extractable reserves of hydrocarbons from Achimovskoe formations in the region are concentrated at Urengoi gas and oil condensate filed.

Achimovskoe formations are embedded at a depth of 3600-3800 meters and have a much more complex geological structure compared with currently producing Cenomanian and Valanginian deposits.