Rosgeologia, a Russian state-run geological exploration holding, and Gazprom bank have signed an agreement to create a joint fund to finance geological exploration activities in Russia. The fund will be set up in 2020, reports Rosgeologia.
The agreement was signed by Sergey Gorkov, CEO and Chairman of Rosgeologia, and Andrey Akimov, Chairman of Gazprom Bank, during St. Petersburg International Economic Forum. According to the agreement, the new fund will be set up to finance geological exploration activities in Russia. It is planned that the fund will be actively involved in the funded companies’ management and operations.
Image credit: Rosgeologia
Rosgeologia and Gazprom Bank also agreed to cooperate on other relevant projects, such as the development of new technologies and digital solutions, including dedicated software, for geological exploration.
On the same day, Rosgeologia signed an agreement with the Russian Direct Investment Fund (RDIF) to create a joint fund for venture financing of the geological exploration in Russia. Two parties also plan to investigate opportunities for the development of the “ГеоLab” geology research centre at Moscow University of Physics and Technology. This project is aimed at the development of a digital platform for the collection, storage, modelling and processing of the geological big data.
The agreements between Rosgeologia, Gazprom Bank and RDIF emphasise the importance the Russian government pays to the development of new technologies for geological exploration in Russia. Due to the Western sanctions, Russian oil and gas companies currently face difficulties while exploring for hydrocarbons in the Arctic and on the country’s continental shelf. At the same time, the government is concerned about the future of the oil and gas production in the country, since the lion’s share of Russia’s crude oil output currently comes from the mature fields with declining resource base. After oil prices plummeted in 2014, Russian oil companies have significantly cut their geological exploration activities, which is considered the riskiest part of the industry cycle, in order to cut costs in the new market environment. In turn, this had a negative impact on the companies’ reserve replacement ratio. For this reason, the Russian government plans to provide necessary incentives for the E&P companies willing to take risks of geological exploration and greenfield development of the new oil fields in both explored and unexplored regions of the country (e.g. Western and Eastern Siberia). Thus, in September 2018 the Ministry of Energy of Russia announced the initiative to introduce certain tax benefits as incentives for the E&P companies willing to intensify their geological exploration in Western Siberia.
Rosgeologia (“Russian geology”) is a state-run holding that provides Russian oil and gas and mining companies with a full range of geological exploration services, including geological and geophysical surveys, exploration drilling, reservoir monitoring etc. According to the company, Rosgeologia has all the necessary equipment and technologies to conduct geological and geophysical surveys offshore on the continental shelf. The company was formed by the decree of the Russian president Dmitriy Medvedev on 15 July 2011. 100% of the company belongs to the Russian government.