UAE's Mubadala enters Russian oil with Gazprom Neft tie-up

Platts, 24.05.2018

The UAE's Mubadala Petroleum has signed a joint venture agreement with the Russia Direct Investment Fund and Gazprom Neft to develop a number of oil fields in the Siberian regions of Omsk and Tomsk, the companies said Thursday, noting that this deal would be a platform for further joint investments in the energy sector.

Mubadala will acquire a 44% stake in Gazpromneft-Vostok, the operator of the fields, while the RDIF will hold 5%, according to a statement released Thursday after the deal was announced at the St. Petersburg International Economic Forum.

The companies estimate proved and probable reserves at approximately 300 million barrels. Gazpromneft-Vostok produced around 33,000 b/d in 2017 which were sold domestically in Russia and pumped through the Eastern Siberia-Pacific Ocean oil pipeline to international markets.

"This investment marks a further step in our long-term growth strategy and sees Mubadala Petroleum's entry into Russia," said Bakheet al-Katheeri, CEO of Mubadala Petroleum. Mubadala previously took part in a consortium with Gazprom Neft, RDIF and Gazprombank in a bid for a license for the Nazymsky block, but lost out to Rosneft. The fund was also linked to a bid for the Erginsky block, which also went to Rosneft.

Mubadala Petroleum, wholly owned by Abu Dhabi's sovereign wealth fund Mubadala, did not comment on the value of the deal. The company has oil and gas output of over 850,000 b/d of oil equivalent and 1.5 million b/d of refining capacity, mostly in Asia.

"RDIF, Mubadala Petroleum and Gazprom Neft see this project as the first step in creating a consortium to pursue further significant investments in the sector," RDIF CEO Kirill Dmitriev said.