The Natural Resources and Environment Ministry said Wednesday that it may extend several no-bid licenses to Rosneft for development on the Sakhalin shelf, where Rosneft has tried to build a presence for years.
"The ministry is preparing such a decision. It's possible that it will happen in the first half of 2010," said Denis Khramov, a department head at the ministry, Interfax reported.
In order to approve no-bid licenses, the government must first include them on a no-bid list and then approve the transfer of the licenses. Khramov said the government had not yet finalized which licenses the oil major would receive. Rosneft vice president Peter O'Brien expressed interest last year in the Nekrasovsky-Astrakhanovskoye More field and the northern part of the Chaivo More field.
Rosneft hasn't had much luck with Sakhalin developments. In 2007, Rosneft and partner British Petroleum gave up drilling on the Sakhalin-4 development when it came up empty.
In 2008, the government rejected Rosneft and Korea National Oil’s request to extend their rights to offshore resources in West Kamchatka, later transferring the license to Gazprom.
The government also granted Gazprom the Kirinsky block, which is part of the Sakhalin-3 project, and the Chayanda field in eastern Siberia without competitive tenders, among at least 10 licenses that the gas export monopoly gained in 2008.
Rosneft spokesman Nikolai Manvelov declined to comment on licenses Wednesday.
The government now only allows Rosneft and Gazprom to develop marine fields. Under current legislation, the license holder must be state-controlled and have experience working offshore.
The Natural Resources Ministry has proposed changes in the laws to stimulate investments in offshore fields, such as expanding the list of eligible companies and granting separate licenses for wildcat drilling, Khramov said. Russia now issues joint licenses for exploration and production on offshore blocks.
The ministry also wants the state to play a larger role in shaping groups that operate offshore projects, to increase financing and ensure compliance with license terms, he said.
The changes would help Russia retain its “advantage” in the Arctic and other offshore areas, currently jeopardized by lack of investment and slow pace of work, Khramov said.
Last year?€™s budget investments in offshore fields were cut to 24.6 billion rubles ($823 million) from 29.9 billion rubles in 2008, Khramov said. License holders invested 800 million rubles, down from 1.2 billion rubles.
Producing offshore fields in the Far East yielded 11.8 million tons of crude, 1.6 million tons of condensate and 10.3 billion cubic meters of gas last year, Khramov said.
(MT, Bloomberg)