RNG JSC is one of the leading oil and gas producers in the Far Eastern Federal District. The company is included in the list of backbone enterprises of the fuel and energy complex compiled by the Russian Ministry of Energy.
One of RNGJSC’s key objectives is to participate in the development of the Republic of Sakha (Yakutia) and improve the quality of life of the local population. RNG JSC is one of the largest employers in the Mirny District of the Republic of Sakha (Yakutia).
The company is developing dynamically, expanding the geography and areas of its business through the introduction of modern technologies, competent management decisions and the creative work of highly qualified geologists, engineers, drillers and representatives of many other professions.
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Proactive business helps Yakutia keep the pace of development high
On 27 September, the Republic of Sakha (Yakutia) celebrated Statehood Day. “Today, our homeland Yakutia, a united multinational society, is moving confidently towards the implementation of major projects in practically all aspects of life. We retain the leading pace of economic and social development in the Far East,” said Aysen Nikolayev, Head of the Republic, in his congratulatory message.
Nevertheless, the basis for development is the economy. Yakutia is a region rich not only in diamonds, but also in oil and gas. The current price environment on the world markets gives the republic a chance to significantly increase its budget revenues.
Natural gas prices on EU stock markets broke through the psychological mark of USD 1,000 per 1,000 m³ in September. As of Monday, 27 September, the price of gas on Europe’s main hub, the TTF in the Netherlands, started at $853 per 1,000 m³.
The revenues will provide opportunities for the implementation of major social, economic and infrastructure projects. Moreover, in 2020, for the first time in Yakutia’s history, budget revenues from oil and gas exceeded those from diamond mining.
“Yakutia is a new oil and natural gas province that opens up great prospects. You could say a new treasure trove. Our President spoke well of this at the ‘Russia, forward!” forum. He urged oil companies and their partners to enter new projects and new production regions,” this is how Yelena Korzun, CEO of the Association of Independent Oil and Gas Producers Assoneft, described the situation on a Russian TV channel.
Rich oil and gas fields are a chance for Yakutia. However, this chance has yet to be seized. Yakutia is a region with difficult climatic and landscape conditions, so serious investment and skilled human resources are needed to capitalize on the republic’s natural potential. One of the independent companies working with hard-to-recover hydrocarbon reserves in Yakutia is RNG JSC, part of EASTSIB HOLDING.
“RNG was founded in 2003 as an exploration company. Today it has grown into a diversified company, which has created the necessary infrastructure – utilities, road infrastructure, workers’ camps, seven oil and gas fields in the taiga. Overall, according to Vladimir Rakitin, the CEO of RNG, the company has invested about $1 billion over the past few years. Billions of dollars in investments and hard work have borne fruit – as of 2019, oil is flowing steadily in the main field.
In 2020, RNG was included in the list of backbone enterprises of the fuel and energy complex compiled by the Russian Ministry of Energy.
Today, RNG makes a major contribution to Yakutia’s budget, social sphere, economy and infrastructure. In 2021, RNG paid over 9 billion rubles in taxes and mandatory payments to the budget, as well as payments to state-owned companies, which is twice as much as last year. The investments into the fields of the holding exceeded $1 billion. The planned volume of investments in 2021 is 8 billion 873 million rubles in the Eastern blocks of Srednebotuobinskoye oil and gas condensate field and 2 billion 968 million rubles in the neighboring license areas.
At the same time, RNG has ambitious plans for the Eastern Blocks: construction of a gas re-injection system, 4 new well pads, 25 oil wells, 2 horizontal gas injection wells, 12 hydrogeological wells.
Moreover, RNG managed to keep the cost of oil production low – approximately 2,326 rubles/tonne, while the average Russian cost is 3,626 rubles/tonne. According to Vladimir Rakitin, the CEO of RNG, the main investments in the field have already been made and, therefore, the main expenses are operating costs that are lower than the industry average.
The company pays much attention to introducing up-to-date technological solutions for exploration and field development. RNG’s key objective in this area remains unchanged – to increase its hydrocarbon reserves by applying advanced technologies that do not influence the environment.
In addition to the development of remote fields, RNG considers its contribution to the social and economic development of Yakutia to be one of its main objectives.
Yakutia has a harsh climate, long distances and difficult terrain. Therefore, transport communications in the republic are difficult. “RNG makes a serious contribution to the construction of roads and bridges. To achieve this, RNG had to become an independent transport and logistics operator with two bases – in the cities of Ust-Kut and Lensk.
In 2017, RNG built the Friendship Bridge, a crossing over the Tas-Yuryakh River that connected the Vilyui federal highway and the licence area of the Eastern blocks of the SB OGCF. In 2020, the company used its own resources to build two bridges on the federal highway Vilyui, which will connect the Irkutsk region with Yakutsk, the capital of the republic. These are the bridges in the Mirny and Suntar districts of Yakutia – a bridge over the Malaya Botuobuya River and a bridge crossing over the Sasar-Yuryakh River.
Meanwhile, when the task of delivering construction materials to the site over a distance of 400 km had to be solved, RNG arranged ferry crossings over three Yakut rivers.
In addition, RNG has invested a total of about $4 million in paving Yakutia’s roads. Yakutia needs a special asphalt surface; RNG is solving that task with the help of a relocatable asphalt-concrete plant by the German company Benninghoven. In 2020, RNG won the tender to asphalt a section of the federal highway Vilyuy between Mirny and Lensk, which will provide Mirny with year-round connectivity to Yakutsk, the capital of the republic.
RNG is also actively exploring hydrocarbon reserves – in November 2020, a promising gas condensate field was discovered within the Murbai license area in the Lensky District of Yakutia. Experts highly assess the potential of this area and the possibility of including the site in the resource base of the Power of Siberia gas pipeline. According to the first operational estimate, initial gas reserves at the new field in Western Yakutia amount to 27 billion cubic metres.
RNG is one of the largest employers in the Mirny district. The company publicly declares that it sees its mission as creating career and social lifts for talented young people. “RNG has managed to create a team of highly qualified professionals”. In general, as RNG’s HR Director Oksana Grobovets says, “We are facing the task of creating a new attractiveness of the North for employees. The company actively cooperates with the Yakutian authorities as part of the ‘Local Personnel to Industry’ program. At the same time, all conditions have been created for shift workers – a dormitory, mobile homes, an on-site canteen, an in-house bakery, a gym with equipment, and a sauna.
Today, RNG is actively developing. Each year, the company ships about 1 million tons of oil to South-East Asia. Between 2019 and 2020 alone, RNG paid 10 billion rubles in taxes. RNG plans to create another 2,500 new jobs in addition to the 3,000 already existing ones.
In his Statehood Day congratulatory message, the Head of Yakutia, Aysen Nikolayev, said that the republic maintains a leading pace of development. This is possible only if there are flagships in the economy that develop themselves and contribute to the development of their region. One of such companies is RNG.