FSUOGM: Rosneft’s $240mn licence purchase

Rosneft outbid its domestic rival Gazprom in a heated tender in late April for rights to a large onshore oil and gas block in the Yamalo-Nenets region, paying an unusually high $240mn for the licence.

Rosnedra invited bids starting at RUB697mn ($9.45mn) for rights to the Severo-Kustarnikovy block, which is believed to be gas prone. Its D1+D2 liquids resources are estimated at 114mn tonnes (836mn barrels), while its gas volumes are assessed are nearly 400bn cubic metres. The block is some 152 km away from the nearest oil pipeline and 94 km distant from the nearest gas pipeline.

Rosneft won after agreeing to pay RUB17.6bn ($240mn) for the licence. This represents the highest-value licence purchase in Russia since 2018, when Rosneft paid RUB20bn for rights to the Erginskoye oilfield in the Khanty-Mansiysk area.

The amount that Rosneft paid for the Severo-Kustarnikovy licence is surprising, considering that the asset contains practically no proven reserves. The only discovery within its perimeter is the Tota-Yakhinskoye gas field containing a mere 1.6 bcm of C1 gas. Exploration will be required to determine whether it has any commercial potential. If Severo-Kustarnikovy proves feasible to develop, however, it could complement other gas assets Rosneft is developing in Yamalo-Nenets under its Rospan project.

In other news, Rosneft has agreed to sell its interests in two offshore projects in Vietnam, along with a related gas and condensate pipeline, to fellow state-owned Zarubezhneft. Closure is expected in June, a Rosneft representative told the Russian press on May 4, without disclosing financial details of the transaction.

Meanwhile, BP has withdrawn from plans to develop two blocks in Yakutia with Rosneft through their Yermak-Neftegaz joint venture. Many of the JV’s assets have been transferred back to Rosneft in recent years, in the absence of any major discoveries.

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