Russian govt refuses to grant Lukoil license to Nadezhda block in Baltic - paper

MOSCOW. Oct 11 (Interfax) - The Russian government has refused to grant Lukoil the license to the Nadezhda hydrocarbon block in the Baltic Sea, which the oil company has been trying to get since 2016, national daily Kommersant reported on Tuesday, citing industry sources.

The Natural Resources Ministry recommended directing questions to the government, while the office of Deputy Prime Minister Viktoria Abramchenko, who oversees resource use, and Lukoil declined to comment.

Lukoil submitted an application for Nadezhda, which is located within the 12-mile zone of territorial waters in Kaliningrad Region, in line with government Resolution 1424 of September 14, 2020. This resolution sets out the procedure for considering applications for such blocks and blocks in internal waterways.

Before being sent to the government, the project was cleared with the Federal Security Service, Defense Ministry, Energy Ministry and Natural Resources Ministry, which under the resolution issue opinions on the presence of specially protected natural areas within the boundaries of the block. Lukoil's application was initially returned for technical reasons, and after revisions the company resubmitted it.

Lukoil asked the government to hold an auction for Nadezhda, which is a block of federal significance back in 2016. It proposed that the auction have special requirements, such as the bidders being registered in Kaliningrad Region and having experience developing fields in the region. The Federal Antimonopoly Service found that only Lukoil met the proposed requirements, and an auction was never held. But Resolution 1424 opened up the opportunity for the company to get an exploration license.