Russia’s oil and gas majors to get 29 Shelf sectors

Jan 16, 2013 12:00 AM

Russia’s state-controlled oil and gas giants, Rosneft and Gazprom, are set to receive licenses to develop 12 and 17 continental shelf sectors, respectively, Deputy Prime Minister Arkady Dvorkovich said.

Rosneft, Russia's largest oil producer, will get them because it has agreed to expand its shelf operations, he said.

However, the Ministry of Natural Resources will first need to check Rosneft’s “adjusted figures” to make sure that the company can comply with the ministry’s targets, Dvorkovich said. If it does, licenses will be issued, he added.

Rosneft will invest 1.2 trillion rubles (about $40 billion) in geological surveys on the Russian shelf within the next ten years, company president Igor Sechin said.

Russia’s natural gas monopoly Gazprom will be issued licenses for 17 shelf sectors “in the foreseeable future,” the deputy prime minister said, adding that there should be no problems in this area.

Gazprom chief Alexei Miller said his company is categorically against the participation of private companies in geological surveys in shelf sectors. “We don’t see why that is necessary,” he said.

Earlier in the day Natural Resources Minister Sergei Donskoi proposed that the right to develop shelf sections unclaimed by state-controlled companies be ceded to private oil and gas companies.

Gazprom’s output in 2012 fell 4.9 percent to 488 billion cubic meters from 513 billion in 2011, and its exports dropped 8 percent to 138 billion from 150 billion, Miller said.

His comments follow Prime Minister Dmitry Medvedev’s call earlier for more intensive exploration of Russia's oil- and gas-rich continental shelf, stressing that all shelf development projects should be long-term.

An array of mechanisms is being developed to intensify geological surveys on the continental shelf, both with funding from the federal budget and state-controlled companies, and new regulations for the use of natural resources are pending, Medvedev said.

At present, companies that want to acquire licenses to work on the Russian shelf have to have a minimum of 50 percent state ownership. Foreign companies and Russian private companies have to sign contracts with Gazprom or Rosneft.

The Ministry of Natural Resources has repeatedly proposed that this list be expanded, including the addition of foreign companies.

It has also been proposed that licenses be split up so that geological surveys are regarded as a separate type of mineral-resource use. In the current situation companies have to obtain so-called combined licenses that cover surveys, exploration and exploitation.

Recoverable hydrocarbon resources on Russia’s continental shelf have been estimated at 98.7 billion tons of oil equivalent.

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