Russia’s major oil deposits dry up

Once the Shpilman, Imilorskoe and Lodochnoe strategic fields go under the hammer, the country will be bereft of large oil deposits able to be sold at auction.

“Large hydrocarbon deposits that could be used to create new oil regions and build company towns no longer exist in Russia,” stated Igor Plesovskikh, deputy head of Russia’s Federal Agency for Subsoil Use (Rosnedra). Plesovskikh noted that the sale of the Lodochnoe, Imilorskoe and Severo-Rogozhnikovskoe (Shpilman) fields would mark the end of the crude oil reserve created in Soviet times. “We’ve enjoyed 20 years of prosperity,” he said.

By the end 2012, an auction could be held to sell off the three remaining major deposits that have yet to be distributed, said Head of Rosnedra, Alexander Popov, and Deputy Minister of Natural Resources, Denis Khramov, said. An order for the sale of the Lodochnoe field has been signed, and the auction is due to take place on Dec. 11 or Dec. 12, Khramov said.

The deadline for the sale of the Shpilman field will be announced by the first week of November, and is likely to take place in mid-December. The sale of the Imilorskoe field is still being discussed inside the department.

Prime Minister Dmitry Medvedev has signed a directive that indicates the initial payment for the Shpilman field and its oil reserves of 160 million tons will be 14 billion rubles ($445 million). Earlier, Alexander Popov estimated that the starting payment for the Imilorskoe field (212 million tons) would be 23.5 billion rubles, and Lodochnoe (43 million tons of oil and 2.5 trillion cubic feet of gas) 4.3 billion rubles.

For the record, the government wanted to sell off all three of these fields one year ago. The initial payment for Lodochnoe was set at 4.3 billion rubles, while the announced payments for Imilorskoe and Shpilman were lower: 20 billion rubles and 8.5 billion rubles, respectively. The oil companies, however, balked at the figures. According to unofficial information, they submitted a request for the prices to be lowered.

Consequently, it was announced that the exploration data on the fields were out of date, and additional upstream surveys were commissioned. Rosnedra could not afford it, so the fields were appraised by the companies themselves: Lukoil obtained the right to carry out operations at the Imilorskoe field, Rosneft at Lodochnoe, and Surgutneftegaz at Shpilman. Later, Alexei Oryel, director of state policy for geology and mineral resources at the Ministry for Natural Resources, announced that the survey had produced no significant results.

The last large deposits to be sold were the Trebs and Titov fields (154 million tons), awarded to Bashneft, and the Naulskoe field (44 million tons), which went to Rosneft.

As reported by RBC Daily, the main contender for the Lodochnoe field remains Rosneft, which has repeatedly stated its interest over the years. Experts believe that there are no other serious contenders for the site. TNK-BP was seeking to bid, but that was before it was recently bought out by Rosneft.

The most likely candidate for the Imilorskoe field is Lukoil, since the company has already studied the site and possesses more data about it than any other oil company. Interest in the deposit has also been shown by Gazprom Neft and Bashneft. Bashneft’s press office told RBC Daily that the company was interested in all the large fields up for sale, but first needed to study the terms and conditions. Bashneft is also eyeing the Shpilman field, along with Surgutneftegaz.

First published in Russian in RBC Daily.

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