“RBC daily”: “Russia’s oil majors rely on Mr Putin”
Lukoil and Rosneft ask the prime minister to sort out licencing issues The heads of Russia's oil majors, Lukoil and Rosneft, have sent a letter to Prime Minister Vladimir Putin requesting a rule clarification in issuing licences for exploiting hydrocarbon deposits on the continental shelf, in domestic oceans and inland seas (RBC daily has a copy of this letter). The oil companies' impatience is caused by their prolonged inability to obtain the rights for the development of two oilfields they have discovered - the Zapadno-Rakushechnoye field on the Caspian shelf and the Novoye field in the Sea of Azov.
The Caspian oil company has spent 2.8 billion roubles on geological exploration in the North Caspian basin and plans to invest another 2 billion roubles in the project, according to the letter sent to Mr Putin and signed by Lukoil CEO, Vagit Alekperov and Rosneft president, Sergey Bogdanchikov. Caspian's explorations resulted in the discovery of the Zapadno-Rakushechnoye field. Another company, Priazovneft, discovered the Novoye field in the Sea of Azov. Exploration investment totaled 3.5 billion roubles. In 2009-2011, plans call for another 2.7 billion roubles to be invested in the project. The oil companies complained in the letter that they had not received any reply from the ministries concerned for some time. Priazovneft, for example, has been trying to secure a licence or, at least, to receive a refusal, for about two years.
The problem can be explained by amendments to the Subsoil Law last April. They "confuse the process to obtain development licences and also that of investment efficiency" thus discouraging potential geological exploration, the letter says. The oil companies are asking Mr Putin to instruct the respective state agencies to clarify the rules for licence applications for deposits on the continental shelf in internal waters and inland seas.
Starting last spring, such subterranean deposits have been designated federally significant. Therefore, only state-controlled companies are entitled to develop them. Judging by the evidence, the problem primarily concerns Lukoil as a partner of the joint venture: because it is a private company. Lukoil could also be considered a foreign company because 20% of it belongs to Conoco Philips, and a large portion of its papers are traded abroad as depository receipts. The Federal Agency for Subsoil Use (Rosnedra), Lukoil and Rosneft refused to comment on the issue.
Both Lukoil and Rosneft are very much interested in licences for the Zapadno-Rakushechnoye and Novoye fields because the government promises preferences for companies developing offshore deposits, says Vitaly Gromadin, an analyst with investment company Arbat Capital. It is likely that the companies will obtain the rights to develop the offshore fields, otherwise the government will have to compensate their exploration costs, says Dmitry Lyutyagin, an analyst with Veles Capital. If the state is interested in developing offshore hydrocarbon deposits, it must allow all national companies to work there
Earlier, Mr Alekperov also talked about the need to lift restrictions on Russian companies' offshore operations and their development of fields with reserves exceeding 70 million metric tons. He recalled that the current legislative standards had been adopted at a time of hydrocarbon production growth and very high oil prices, so the companies must adjust to the present situation.
The Caspian oil company, in which Lukoil holds 49.89%, Rosneft 49.8%, and Gazprom 0.21%, was established in 1999 to conduct exploration in the North Caspian basin. Priazovneft, which was established in 2003, with Lukoil-Nizhnevolzhskneft holding 42.5% of the company's shares, Rosneft 42.5%, and the Krasnodar Territory's government 15%, explores the Sea of Azov.
Yulia Nazarova
