Gazprom and Rosneft take shelf control

Russian state-controlled giants Gazprom and Rosneft have been handed monopoly rights to all hydrocarbon developments on the Russian shelf, Natural Resources Minister Yuri Trutnev has confirmed.

Trutnev's statement - made in an interview with Moscow financial daily Kommersant - comes after the upper house of parliament, the Federation Council, approved amendments to the law on foreign investments in strategic sectors, which limits foreign participation in developing Russia's biggest oil and gas reserves.

Once the amendments - which were approved by the State Duma earlier this month - are signed into law by the president, the two state-controlled giants will automatically be handed operatorship of any new offshore projects.

Amendments to the subsoil and offshore laws were also approved "in one package with the foreign investments amendments", a ministry spokesman told Kommersant.

These give the right to develop Russia's offshore reserves only to those companies "which have five years' experience in working offshore Russia and in which the state owns at least a 50% interest", he said.

State-run Gazprom and Rosneft, as well as Zarubezhneft, are the only companies that meet the amendments' requirements.

Meanwhile, Trutnev told Kommersant that licences for gas-prone blocks will be transferred to Gazprom, while oil reserves will be developed by Rosneft.

Trutnev told the paper the two state giants will share the resources between themselves without holding auctions or tenders. In cases where there could be a conflict of interest, the Energy Ministry will take what he called “additional consultations”.

The new regulations will not apply to reserves in the Caspian Sea, the development of which is ruled by intergovernmental agreements between Kazakhstan, Azerbaijan and Russia.

A Platts report said that the initial recoverable reserves in Russia's offshore play is believed to total about 100 billion tonnes of oil equivalent, of which more than 80% is gas.

About 70% of that total lies in the Barents, Pechora and Kara seas, in the western sector of the Russian Arctic.