Eric Watkins
OGJ Oil Diplomacy Editor
LOS ANGELES, Sept. 23 -- Russia’s Mineral Resources Agency said six oil companies have entered bids in a tender scheduled for Dec. 2 to develop the Arctic Trebs and Titov oil fields.
The firms include Lukoil subsidiary Lukoil-Komi LLC, Bashneft, TNK-BP subsidiary OJSC Samotlorneftegaz, Surgutneftegas, Gazprom Neft, and Nord Imperial LLC, which is part of India's Oil & Natural Gas Corp. group.
Analyst IHS Global Insight noted the absence of a bid from Russia’s OAO Rosneft, calling it “a surprise decision.” The analyst, citing Rosneft Pres. Eduard Khudainatov, said the firm plans to focus on existing projects.
“Rosneft already owns a good set of very promising projects in East Siberia, offshore, and other regions,” said Khudainatov, who recently replaced Sergei Bogdanchikov as the company's president.
However, the analyst also speculated that Rosneft's decision to skip the auction could be strategic, “as the company may be counting on using its leverage as Russia's top oil producer to strike a partnership deal with whichever company wins the bidding, particularly if the ONGC affiliate wins the auction.”
Then, too, IHS Global Insight also suggested that Rosneft may be opting simply to stay out of the auction on principle, arguing that the Trebs and Titov fields should fall into the category of "strategic fields" under Russian law that should, in theory, then be restricted to development by majority state-owned companies.
The analyst noted that Rosneft and Russia’s state-owned OAO Gazprom have previously cited this law to lobby successfully for the government simply to transfer the rights to strategic fields to them without the need for an auction or any payment for license rights by the two companies.
In connection with the bid by ONGC’s Nord Imperial, Russian Natural Resources Minister Yuri Trutnev doubted it could go through as the Trebs and Titov sites, as indicated by IHS Global Insight, are strategic fields.
"The deposits are classified as strategic, and so it is up to a government commission to decide whether (ONGC) can participate alone, but I doubt that will be the case. I would be surprised," Trutnev said.
"It's certain that the foreign investments commission will assess ONGC for the Trebs-Titov tender,” Trutnev said, adding that Samotlorneftegaz will probably be assessed too. They need to look at the capital structure.”
Russia’s Interfax news agency said Rosneft and ONGC could possibly form a joint venture if the Indian firm wins the Trebs-Titov tender, saying that the Russian firm might be involved in the project along similar lines to those on which it is developing Sakhalin-1.
A few years ago Rosneft, which owned 40% of Sakhalin-1, sold half to ONGC, which financed both its stake and its Russian partner's stake, the agency said.
Meanwhile, bidders for Trebs-Titov have until Oct. 25 to pay the deposit, equal to the starting price, which is 18.171 billion rubles, and until Oct. 28 to submit plans to develop the fields, proof of payment of the deposit, and their proposed one-off bonus.
The recoverable reserves of the Trebs field are estimated at 82.469 million tonnes of oil, while those of the Titov field are estimated at 57.59 million tonnes.
Contact Eric Watkins at [email protected].
Hess Corp.
Federal Reserve Bank of Dallas
