Russia to auction last major Siberian oilfield in 2016

By bne IntelliNews November 17, 2015

Russia's last West Siberian oilfield Erginskoye will be auctioned in the first half of 2016,  Vedomosti daily reports, citing Deputy Natural Resources Minister Denis Khramov.

This last remaining major traditional "brownfield", was due to be sold in 2010, but four other major fields were sold in its place: the Titov and Trebs fields to Bashneft and Lukoil in 2010, and Lodochnoye (to TNK-BP, now Rosneft), Shpilman (Surgutneftegas) and Imilor (Lukoil) in 2012.

Holding 103mn tonnes of oil, Erginskoye is one of the largest fields with C1+C2 reserves under Russian reserve standards, compared with 140mn tonnes for Titov and Trebs, 43mn tonnes for Lodochnoye, 89mn tonnes for Shpilman and around 200mn tonnes for Imilor.

Oil majors Rosneft and Gazprom Neft are the most likely candidates to acquire Erginskoye, as it is located west of the Priobskoye field developed by the two companies, and is close to existing transportation infrastructure.

Uralsib Capital commented on November 17 that "unlike Lodochnoye and Titov and Trebs and some reservoirs at Imilor, it appears that Erginskoye, despite its complex geology, will not be eligible for a reduced extraction tax (MET) rate applicable to remote fields or hard-to-recover reserves".

The bank estimates that coupled with low oil prices, it will probably limit the price of the license to a total of $0.8bn-$1.1bn. The license will likely be sought by all the major companies active in the area, including Rosneft, Gazprom Neft, Surgutneftegas and Lukoil.

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