Equinor expands onshore presence in Russia with new acquisition

Norwegian company Equinor has acquired a 49% interest in the limited liability company KrasGeoNaC (KGN) to expand its onshore presence in Russia.

The agreement with Russian energy major Rosneft is now complete.

Following the completion, the total payment for the deal amounted to approximately $550m, including cash consideration of $325m and other customary adjustments.

In a statement, Equinor said: “As part of this agreement, Equinor has redirected its remaining exploration commitments offshore in the Sea of Okhotsk, and as such, has no outstanding obligations in that area.”

KGN holds 12 conventional onshore exploration and production licences in Eastern Siberia. It includes the North Danilovsky development, which commenced production in July.

The field is expected to gradually increase production to 40,000 barrels of oil per day by 2024, and then, to 70,000 barrels of oil per day.

In pursuit to the 2018 agreement, Equinor and Rosneft also agreed to collaborate on health, safety, and sustainability areas across the KGN assets.

Equinor has been present in Russia for 28 years. According to its website, the company has 70 employees and produces approximately 10,000 barrels of oil equivalent per day from its assets in the country.

In January, Equinor and Shell acquired a 49% interest in the Bandurria Sur Block in Argentina.

Both companies paid $177.5m each to purchase their 24.5% stakes in the asset. With 51% interest, YPF continues to be the operator of the field.