Moscow prepares to put three Siberian gas fields on the block

22 June 2017, Week 24, Issue 936

Russian Prime Minister Dmitry Medvedev has signed a decree to auction off subsoil rights to a trio of Soviet-era gas fields in Yamalo-Nenets Autonomous Okrug.

In a statement published on June 20, the government announced that a licensing round would be held to the Verkhnetiuteyskoye and West-Seyakhinskoye deposits, situated in the Yamal Peninsula. The statement did not specify when the round would take place, although in May, Russian Natural Resources Minister Sergei Donskoi indicated it would be fixed for later this year. The starting price for bids has been set at 5.84 billion rubles (US$98 million).

According to the government, another auction will be held at a later stage for rights to the Stormovoye field, located in the Gydan Peninsula, on the opposite side of the Gulf of Ob. Bids in this round will start at 945.2 million rubles (US$15.8 million).

Verkhnetiuteyskoye and West-Seyakhinskoye, situated around 500 km from Salekhard, were discovered in 1982 and 1984 respectively. Soviet authorities decided against proceeding with development of the fields, though, owing to their remote location and lack of access to pipeline infrastructure. According to Russia’s subsoil agency, Rosnedra, the deposits contain an estimated 309.9 bcm of gas in C1+C2 reserves, along with a small volume of oil.

Stormovoye was identified in 1993. It is situated around 140 km northeast of West-Seyakhinskoye and contains 7.92 bcm of gas in C1+C2 reserves, although total recoverable resources are estimated at 572.5 bcm.

 

The takers

NewsBase Intelligence (NBI) expects the government to insist that only companies with large upstream portfolios in the region can take part in the upcoming auctions, effectively narrowing the selection to state-owned Gazprom and its independent rival, Novatek.

Both producers have expressed interest in the assets on offer.

Novatek is looking to expand its resource base in the region with the aim of establishing Russia’s largest hub for LNG production. The company is currently building a 16.5 million tpy LNG plant at Sabetta, just over 60 km northeast of West-Seyakhinskoye, and has proposed several similar export projects nearby.

Gazprom’s main asset in the region is the Bovanenkovskoye gas field, situated just 45 km west of Verkhnetiuteyskoye. It is the largest deposit in production in the Yamal Peninsula, with output reaching over 67 bcm last year. The bulk of this gas is delivered to markets in Europe.

Gazprom also holds exploration and development rights to the nearby North-Tambeyskoye, West-Tambeyskoye, Tasiyskoye and Malyginskoye fields. It has spurned requests by Novatek for joint exploitation of these deposits.

If you want to read more Stories like this – Sign up for a free trial 

Joseph Murphy

Edited by

Joseph Murphy

Editor

Any questions? Please get in touch