Russia's legislature has approved a legal scheme under which only state-run Gazprom and Rosneft will receive the right to develop the country's vast offshore reserves in the Arctic and Far East, a spokesman with the country's natural resources ministry said.
The Federation Council, the higher chamber of the Russian parliament, approved amendments Wednesday to the law on foreign investments into strategic sectors, which limits foreign participation in developing Russia's biggest oil and gas reserves. The amendments, which were approved by the lower chamber of the parliament, the State Duma, earlier this month, must now to be signed by Russia's president to become law.
Amendments to the subsoil and offshore laws were also approved "in one package with the foreign investments amendments," the spokesman said.
The amendments to the subsoil and offshore laws give the right to develop Russia's offshore reserves only to those companies "which have five-year experience in working offshore Russia and in which the state owns at least 50% interest," he said.
State-run Gazprom and Rosneft, as well as Zarubezhneft, are the only companies that meet the amendments' requirements.
The spokesman could not say at the moment when the natural resources ministry expected to start distributing licenses for offshore blocks, to speed up work on those largely unexplored resources.
Licenses for blocks with mainly gas reserves will be transferred to Gazprom, while oil reserves will be developed by Rosneft, the natural resources minister Yuri Trutnev said in an interview with Russia's Kommersant daily published.
Trutnev reportedly said that the tender for the rights to develop the Sakhalin 3 project in Russia's Far East might be held as early as this year. Gazprom and Rosneft both have said they are interested in the project.
The new amendments would not be applied to reserves located in the Caspian Sea, the development of which is ruled by intergovernmental agreements between Kazakhstan, Azerbaijan and Russia on the delineation of the sea zones.
These agreements provide for cooperation in the development of major Caspian fields, including through production sharing agreements.
The Russian sector of the Caspian Sea is being developed by Lukoil, the country's biggest independent oil producer.
Initial recoverable resources of Russian offshore fields are believed to amount to some 100 billion mt of oil equivalent, of which over 80% is gas.
Some 70% of the resources are located in the Barents, Pechora and Kara seas, in the western part of Russia's Arctic Zone.
Russia's existing energy strategy, which is currently under review, forecasts production at 95 million mt/year of crude and 300 Bcm/year of gas by 2020.
But it involves immense challenges and is very costly as the majority of Russia's offshore reserves are in the harsh climate conditions of the Arctic zone, in a remote and undeveloped area.
Source: Platts
