Tatneft Announces Results of Its Crude Oil & Gas Reserves as of Year-End 2020

Based on the audit by an independent oil and gas consulting firm Miller & Lents, Ltd. net recoverable oil and gas reserves of Tatneft in accordance with the standards of the Petroleum Resources Management System prepared by the Oil and Gas Reserves Committee of the Society of Petroleum Engineers (SPE-PRMS) as of 31 December 2020, assuming full economic life of the fields and forecast prices, were:

Total Proved:
Crude and Condensate (MBbls) : 6 342 991
Gas (MMcf) : 1 508 705

At the end of 2020 total proved reserves of crude and condensate were estimated at 892.1 million tonnes, and of gas at 42.72 billion cubic meters.

Contingent resources are defined by the SPE-PRMS as those quantities of petroleum estimated, as of a given date, to be potentially recoverable from known accumulations by application of development projects not currently considered to be commercially recoverable due to one or more contingencies.

For the audit of oil and gas reserves as of 31 December 2020 in accordance with the SPE-PRMS standards forecast (in the range between US$37 and US$78 per barrel) and not constant prices for crude oil were used. In the Company’s opinion, the use of forecast prices allows to evaluate commercially recoverable reserves for the purposes of implementation of Tatneft Group Strategy more accurately. The use of constant prices, especially based on the results of such crisis year as 2020 was, does not reflect the potential of development of the Company’s oilfields considering the recovery of oil markets as well projected future demand and supply. If the constant price scenario from US$31.45 to US$35.69 per barrel was used to evaluate Tatneft Group oil and gas reserves then estimated oil and condensate reserves of the Company would be around 5.4 billion barrels of proved (2.7 billion barrels of proved developed producing, 1.9 billion barrels of proved developed nonproducing and 0.8 billion barrels of proved undeveloped), 1.8 billion barrels of probable and 215.2 million barrels of possible.

Besides the use of forecast prices, the changes in oil industry taxation resulting in the reduction of commercially recoverable reserves had the largest impact on the quantity of Tatneft Group’s proved reserves.