Lukoil Applies for Nenets Gasfields

Lukoil, the listed Russian oil company, has filed an application to enter in an auction for two oil and gas fields in the Nenets Autonomous District (NAO).

Lukoil will bid for the Layavozhskoye and Vaneyvisskoye deposits along with state-run energy company Rosneft and gas monopoly Gazprom, according to the report. Lukoil applied on the last day, said Vedomosti, citing a spokesman for the ministry of natural resources.

Lukoil told NGE that it would not comment on its plans for the fields, or whether it was the gas or the oil that it was interested in, unless it was successful in one or other of the auctions.

The auction will begin with a starting price of roubles 8.05bn ($122.8mn), will be conducted by Rosnedra, the article reported.

Analysts believe that the main competition for the deposits will be between Lukoil and Rosneft, according to the article. First, Gazprom is already struggling to find a market for its gas in Russia, as it has to sell at regulated prices while its rivals can undercut it. And second, it has plenty of idle production capacity it can draw on if it needs more.

According to ministry, Layavozhskoye has 9.8mn metric tons of oil reserves and 140.1bn m³ of gas reserves under C1 + C2 category and the Vaneyvisskoye field has 6.5mn mt of oil and 85.2bn m³ of gas reserves.

Layavozhskoye and Vaneyvisskoye areas are in northern Nenets, a few dozen km from Naryan-Mar. The shortest distance to the main gas pipeline is 454 km while the main oil pipeline is 220 km distant, according to Vedomosti. 

Gazprom affiliate Pechorneftegazprom developed the Layavozhskoye field up until 2007 when it had to return the licence for failure to meet the time limits for geological exploration and production.

Murat Basboga