The barrage of criticism leveled against joint ventures involving foreign companies wanting to participate in development of petroleum reserves off Sakhalin Island has lasted long enough.
So says a leading Moscow newspaper.
If constant carping by the Moscow media, government officials, and prominent persons regarding methods used and decisions made in reaching agreement on the Sakhalin tender doesn't end soon, western firms will lose patience, warned Trud, the organ of the Russian Federation's trade unions.
WE AGREE, BUT...
Trud conceded there are legitimate objections to the Sakhalin deal. It agreed that a policy of "selling off" Russia's mineral wealth to obtain maximum hard currency revenue in the shortest possible time may lead to irretrievable losses in the future.
But the paper's economic editors emphasized that although Russia is a raw material superpower, it is in such dire economic straits that it must permit foreign partners to help tap its resources. They said other countries want to buy hardly anything else Russia has to offer.
"Whether it's Yakut diamonds or mammoth tusks or the riches of Sakhalin's shelf, any deal we make is bound to cause a big scandal, accusations of bribery, and even charges of treason against the motherland," Trud declared.
"But in the matter of the Sakhalin tender, we aren't talking about some half-baked competition to build a war victory memorial on a Moscow hill. Rather, we are dealing with a major project in which foreign companies have already invested about $4 million."
ACADEMICIANS' COMPLAINTS
The newspaper's comments were made in reply to a letter signed by two full members and a corresponding member of the Russian Academy of Science protesting the government's selection early this year of the Marathon-McDermott-Mitsui group as winner of the tender for rights to develop oil and gas fields off Sakhalin
The academicians repeated earlier complaints that the MMM group was awarded "monopoly rights" to an excessively large area even though its members ranked behind other competitors in experience and financial resources.
Russian scientists, including the three academicians, also contend that detailed geological and geophysical data laboriously accumulated over many years was turned over to foreign participants in the tender competition almost without compensation.
They believe that given enough time, Russia can provide the technology to develop difficult offshore fields such as those in the Sea of Okhotsk without massive foreign assistance.
THE ONLY OPTION
Trud pointed out Russian authorities unanimously agreed that participation by foreign firms in Sakhalin shelf development was absolutely essential because the area's hostile climatic conditions make it impossible to use domestic technology. It said the tender competition to attract foreign capital was the government's only viable option.
Despite all of the objections, a decision was made and must be honored, Trud asserted.
"Like it or not, the train has left the station, as the saying goes. To reopen competition would Signify to western firms that Russia's reliability as a business partner is in serious doubt. A final decision can't be delayed for years.
"This is a matter involving an estimated 640 million metric tons (4.672 billion bbl) of oil and condensate along with 1.16 trillion cu m (41.1 tcf) of gas. That's more than the annual peak production of these fuels in the entire territory of the former Soviet Union."
Copyright 1992 Oil & Gas Journal. All Rights Reserved.
