Oil and gas fields acquisition risks analysis (Buy-side M&A)

Competence area: Strategy, Investment

Industry/sector: oil and gas / exploration and production

Year of completion: 2020

Client: private investors, Russia


Project background:

The client, a private investor with a highly diversified portfolio of investments in various branches of the real sector, contracted Investorium to determine the feasibility of investment in the developing of a group of oil and gas fields in the Northern part of Russia, thus considering the entire complex of geological, geo-environmental, technical, financial and economic aspects and risks, and assessing investment costs with regard to exploration, drilling and further development of the fields, including the creation of needed power-supplying and engineering infrastructure.

Scope of work:

In order to handle the extensive scope of the work, Investorium formed a project team and involved external industry experts with relevant technical expertise. The joint project team analyzed the data from the historical (primary) field exploration (seismic and well drilling data). Based on the analysis, the team estimated the hydrocarbons reserves, determined production profiles, and calculated the investment needed to perform additional geological exploration works and the costs involved in drilling a required number of wells of required types and profiles in required locations.

A distinctive feature of this project was the fact that the said oil and gas fields are located in a zone of federal nature reserves, which, both by definition and under the legislation, implies extra requirements for project approvals, exploration and survey works, drilling and production operations, and otherwise involves additional capital costs in order to satisfy the increased requirements of the environmental legislation. Another focal point of the project was the prospective analysis of the competitive situation and potential of the natural gas processing products market (methanol in particular), including the prospects of exports.


As a result, the Client received a comprehensive investment opinion containing a complete analysis and assessment of project risks in all the focus areas (geology, geo-ecology, competitive environment, project economics) required for making a weighted investment decision. Additionally, the Client was provided with all necessary inputs for a detailed economic feasibility study of the project-specific technical solutions, including the calculation of the capital costs budget.

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