17 Dec 2010 13:57

Sistema mulling strategic partner for Bashneft

MOSCOW. Dec 17 (Interfax) - AFK Sistema is not ruling out the possibility of bringing a strategic partner into Bashneft , the lead company in the Bashkir Oil and Energy Group, Sistema head Leonid Melamed told journalists.

Sistema's basic scenario is to develop the oil business with its own resources, Melamed said. But it is also considering a partnership with an outside oil company, possibly a foreign company. The partnership would cover joint development of the Trebs and Titov fields as well as an equity stake in Bashneft, he said.

Asked whether Indian ONGC was being considered as a potential partner, Melamed said: "It is not begin ruled out. We are looking at various options."

A number of sources told Interfax that in the beginning of 2010 Sistema and ONGC discussed the Indian company's acquisition of a stake in Bashneft, most likely 20%. Representatives from the two companies met a number of times over the course of several months but were not able to agree a deal.

Interest in Bashneft has risen significantly since December 2, when it won the tender on rights to Trebs/Titov, Melamed said.

Alexander Korsik, the head of Sistema's Bashkir Oil and Energy Group, did not deny a recent statement from Indian Petroleum and Natural Gas Ministry Joint Secretary (Exploration) Raju Narasimha that ONGC was continuing talks with Bashneft on participation in the Trebs/Titov project.

Companies want to partner with Bashneft on Trebs/Titov because it will add to their reserves and give them a foothold in the area where the fields are located: the northeastern part of European Russia.

Bashneft plans to reach a decision on Trebs/Titov in the first quarter of 2011 or, at a maximum, within three months of official receipt of the license to the fields.

Bashneft will receive the license to the fields after the government approves the results of the tender.

Previously Korsik had said that the start to commercial oil production at the fields depended on any agreement that is reached with Lukoil.

The combined recoverable resource in the fields amounts to 89.73 million tonnes of C1 reserves, 50.33 million tonnes of C2 and 59.29 million tonnes of C3. D1 forecast reserves total 70 million tonnes.

It was reported earlier that six companies applied to bid in the tender: Bashneft, Surgutneftegas , Gazprom Neft , Lukoil Komi, ONGC subsidiary Nord Imperial, and Samotlorneftegaz, a subsidiary of TNK-BP . However, only the applications from the first two companies were accepted. Surgutneftegas later failed to submit the security deposit and was dropped from contention.