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$500M Starting Price in Nenets Fields Auction

The government will demand a starting price of about $500 million when it auctions the strategic Trebs and Titov oil and gas fields in the Arctic, Natural Resources and Environment Minister Yury Trutnev said Friday.

The fields, with estimated reserves in excess of 200 million metric tons, are among the largest untapped oil and gas deposits in Russia. Government officials have said they could be auctioned this year, although Trutnev did not say when they would be sold.

Russia is the only country in the world pumping in excess of 10 million barrels of oil per day, but future output growth is dependent on replacing mature deposits in western Siberia with hard-to-access fields in eastern Siberia and the Arctic.

Trebs and Titov, in the Nenets autonomous district, are classed as strategic, which rules out majority private ownership. Some analysts have said, however, that the economic crisis and the need to maintain growth in oil and gas production may have made the Kremlin more accepting of foreign investment.

India's state-run Oil and Natural Gas Corporation has expressed interest in the fields, the government said in March, ahead of Prime Minister Vladimir Putin's visit to India.

Gazprom is looking to import only 10.5 billion cubic meters of Turkmen gas this year, or one-third of the agreed maximum volumes, as poor demand and other fuels' usage eat into consumption.

"Turkmenistan and Russia signed an agreement. … The shipping volumes will total 10.5 bcm this year of Turkmen gas," said Serik Yestai, head of Intergas Central Asia, a subsidiary of Kaztransgas that pumps all Turkmen gas sent to Russia.

Gazprom bought 50 bcm of Turkmen gas annually before a pricing dispute halted deliveries for almost nine months in 2009.

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