Surgut, Bashneft Win Approval to Bid for Largest Undistributed Oil Fields in Russia, Focus Reports
Release Date: 2010-09-27
Russian energy corporations Surgutneftegaz and Bashneft (the latter a subsidiary of billionaire Vladimir Yevtushenkov’s AFK Sistema) were authorized to bid for Russia’s largest unallotted oil reserves on September 27th. The clearance came from the Russian Ministry of Natural Resources. Surgut and Bashneft were the only bidders amongst several to receive approval—hopefuls included Russian giant Lukoil, the BP interest TNK-BP, and Indian ONGC. Russian officials have so far denied the other requests, noting “significant” errors in their applications.The reserves, at sites Trebs and Titov located in the Arctic Ocean, are estimated to contain more than 200 million metric tons of recoverable oil, or approximately 1.1 billion barrels.
Thanks to political connections of the Systema group, some deem Bashneft as the favourite. Would it win the bid, Bashneft could double its reserves with the Trebs and Titov fields, and seeks to output 300,000 barrels per day by year 2013. The company stated this month that it had the financial resources to bid independently.
The winner of the allotment will have to comply with rigorous government terms. Any company that assumes ownership will have to sell 15% of the oil it produces through oil exchanges, and push 42% through refineries.
Rights to development at the Trebs and Titov reserves will be formally sold at government auction on December 2nd, as a single lot, with bidding starting at 18.2 billion rubles ($596 million). At present, it is unclear whether the state will allow other companies to bid.
| Type: | NORMAL |
| Company: | Focus Reports |
| Country: | Switzerland |