30 Mar 2010 13:56

Foreigners could get 50% ownership of Russian offshore oil, gas projects

MOSCOW. March 30 (Interfax) - Foreign companies could get up to 50% ownership of offshore Russian oil and gas projects under new legislation being drafted by the Russian Natural Resources Ministry.

Deputy Resources Minister Sergei Donskoi said at a meeting of the Maritime Board that the new legislation would enable other Russian companies with the necessary financial and technological potential to develop the shelf besides Rosneft and its subsidiaries.

"In order to step up development of the shelf, the need has arisen to amend legislation, above all by expanding the list of entities with the opportunity to develop the shelf," Donskoi said.

The ministry is also proposing to bring foreign partners with up to 50% ownership of projects into offshore gas fields in addition to Gazprom and its subsidiaries, Donskoi said.

The decision to restrict access to shelf deposits was made in 2008, when the economic situation was quite different, Donskoi said. "In the current economic situation, an inadequate pace of work compels us to propose reconsideration of shelf-development strategy," he said.

While Gazprom and Rosneft put 56.4 billion rubles into shelf research and development in 2008, more than 9.3 trillion rubles will need to be spent before 2040, Donskoi said. Opening the shelf with state-company efforts will not be achievable any sooner than 165 years from now in the best-case scenario, he said.

The two companies have exclusive shelf rights, he said, and legislative initiatives in the works have been discussed with them.

Natural Resources and Ecology Minister Yury Trutnev said at the meeting that Gazprom was only interested in expanding itself via its subsidiaries at this point. "On everything else, its position is restrained," he said, adding that increasing investment in gas deposits is not terribly rational in the current climate.

Oil is another question, Trutnev said. "We can sell more oil. There is a difference between Rosneft's interests and Russian interests in general," he said. "Some oil liberalization would seem justifiable."

Donskoi also spoke about one legislative initiative - making the geological study of resources on the shelf an independent form of subsurface resource use. Right now, he said, shelf-exploration licenses are not issued, and that form of activity can only be done by license issued for development and extraction, and only that done by state companies.

"We have to help our state companies manage the risks of working on the shelf. The opportunity to receive a license for this kind of usage should be available to all interested entities, including foreign ones," Donskoi said. A stimulative measure might be a state guarantee that the first to open a deposit would be granted either a non-controlling stake in a consortium with state companies, or fair compensation for its expenses.