GEOLOGY

The total number of the fields is 122 (GB RF as of 01.01.2020).

The producing assets of the Company form the following groups by their geographical and operational profile:

1. West Siberia group

2. Volga group

3. Central Siberia group

Oil bearing capacity at the fields within Volga region is related to terrigeneous and carbonate rocks of middle and lower carbon and Devonian; in West-Siberian and Central-Siberian regions it is related to upper Jurassic and Neocomian deposits.

The potential to discover new oil and gas deposits, as well as expand the oil-bearing capacity of previously discovered deposits, is connected with the stable implementation of the exploration program, in particular, with the details of high-quality seismic exploration work MOGT-2D/3D, as well as prospecting and exploration drilling.

At the same time, hard-to-recover and unconventional reserves have recently become the main areas for replenishing the reserves portfolio in the medium term. This allows for prompt ranking of projects, highlighting the most attractive and promising (Verkhne-Shapshinskoye, Tagrinskoye, Zapadno-Varioganskoye fields).

In 2017, MOGT-3D field seismic exploration works were completed at license areas of Shapshinskaya group of fields. The total amount of field development work performed exceeds 1,600 km2. This year, the Company performed a complex processing and reinterpretation of seismic exploration works and well data of Shapshinskaya group of fields, which allowed to clarify geological model of Neocomian deposits.

The results of the production drilling program confirmed the high efficiency of the exploration work performed. Thus, in 2019 total growth of the reserves at lower Ach formation of Verkhne-Shapshinskoye oilfield was 1.6 million tons of oil, at Tagrinskoye oilfield there was a growth of 13.3 million tons.

Further exploration at Tagrinskoye oilfield allowed to add about 10 million tons of high margin oil reserves, which extend beyond the boundaries of Tagrinskoye license area in undistributed subsoil funds within the boundaries of flanks of Tagrinskoye oilfield and Vostochno-Kalinovoye license area.

In 2019, as part of the geological study of Khanty-Mansiysk field, the Company performed processing and interpretation of 2D seismic exploration (2 781 linear km). The results determined the area for further study and detailed 3D seismic exploration (area 100 km2) for Paleozoic deposits.

An exploration and appraisal well was drilled at Sobolinoye license area of OOO Tomskaya Neft. The oil and gas content of the Mareva area section was clarified, which did not confirm commercial oil and gas reserves, and the well was abandoned.

Based on the results of the exploration program implementation in 2019, the total growth of the Company's reserves amounted to over 15 million tons.

In order to annually replenish its resource base, the Company plans to continue its exploration policy based on:

- prospecting and exploration of new HC deposits in oil and gas promising horizons through prospecting and exploratory drilling, as well as pilot production drilling;

- improving the efficiency of prospecting and exploratory drilling by improving the quality of 2D and 3D seismic exploration, which allows for detailed mapping of complex HC traps, including deep-seated complexes;

- expanding the boundaries of already established deposits

- acquisition of potentially promising new subsoil areas based on geological and technical-economic assessments.