Russia's Gazprom Neft eyes cooperation with Saudi Aramco in hard-to-recover oil

The logo of Russia's oil producer Gazprom Neft is seen on a board at the St. Petersburg International Economic Forum 2017 (SPIEF 2017) in St. Petersburg, Russia, June 1, 2017. Picture taken June 1, 2017. REUTERS/Sergei Karpukhin

MOSCOW (Reuters) - Russia’s Gazprom Neft will work with the world’s largest oil producer Saudi Aramco in hard-to-recover oil production and on a technology known as hydraulic fracturing, Gazprom Neft chief Alexander Dyukov said on Wednesday.

Earlier this month, both companies signed an agreement on technological cooperation during a state visit to Russia by Saudi King Salman.

Dyukov said that the companies had pinpointed six spheres of cooperation, such as equipment localization, to boost oil production and exploration. “We have to find the format of cooperation,... financing of the work,” Dyukov said.

Gazprom Neft, the oil arm of gas giant Gazprom, is the fastest growing oil producer in Russia in terms of output. It is keen on production of hard-to-recover oil, a new source of crude output in the country.

Dyukov also told reporters that Gazprom Neft expects its borrowings to rise to at least between 200 billion rubles and 210 billion rubles ($3.5 billion-$3.7 billion) next year without possible new funds for Messoyakha greenfield.

“There could be additional borrowings, we have been in talks with the banks,” he said.

This year’s borrowings are set at 77 billion rubles.

Reporting by Olesya Astakhova; writing by Vladimir Soldatkin; editing by Mark Heinrich