Russia will sell its last large oilfield in West Siberia early next year, a Natural Resources Ministry official said, in an auction that could fetch as much as $1 billion. Denis Khramov, the first deputy minister, said the Erginskoye oilfield could be auctioned in the first or second quarter of 2016, adding he expected the sale to draw high interest from producing companies.
The sale of Erginskoye, with estimated reserves of 103 million tonnes (755 million barrels) under Russian standards, had initially been planned back in the early 1990s. However, it never took place because the state was mindful of the increasingly depleted oil deposit of West Siberia, where the country – one of the world’s largest oil producers – extracts around 80 percent of its crude oil.
Analysts from UralSib said the field, located west of the major Priobskoye field, developed by Rosneft and Gazprom Neft, close to existing transportation infrastructure, would unlikely be eligible for tax breaks applicable to remote fields or hard-to-recover reserves. “Coupled with the low oil prices, it will probably limit the price of the license to $1.0-1.5 per barrel, a total of $0.8-1.1 billion,” they said in a note.
Last time a large oilfield was sold in Russia, Bashneft won the rights to develop the Trebs and Titov fields in the Arctic in 2010.