Gazprom, Transneft might be allowed to mine common resources without auctions

MOSCOW. Oct 20 (Interfax) - The Russian government is exploring the possibility of granting licenses to deposits of commonly occurring mineral resources to gas giant Gazprom and oil pipeline monopoly Transneft without holding auctions, the acting head of geology and resource use policy and regulation at the Natural Resources Ministry, Maxim Kirzhimanov said.

"Current legislation introduced an auction-free process for granting common mineral resources for construction of roads in 2017 and for construction of railways in 2022. Now a similar decision is being prepared in regard to pipeline transport - trunk pipelines - according to a government list," Kirzhimanov said at a meeting in the Federation Council.

However, there is the problem of lost budget revenue and the issue of preventing abuses of the preferential regime, he said.

"One must understand that the absence of an auction for the property means the absence of a one-time payment for participation in the auction. Therefore, in this issue, for those examples that I cited, there is a mechanism that provides for a targeted and specific mode of operation, for example in regard to railways. The government must determine, and it has determined, a precise list of pieces of railway infrastructure to which this preferential regime applies," Kirzhimanov said.

"A similar thing is now being done in regard to trunk pipelines for Gazprom and Transneft: a specific list of assets only for these natural monopolies and only from the list that will be determined by the government," he said.