New Delhi: Russia has disqualified state-run Oil and Natural Gas Corporation (ONGC) from bidding for the giant Trebs and Titov fields in northwest Russia, PTI reports. An Indian official with information about the process was critical of the development, saying that the bid was rejected on “filmsy” grounds in order to keep out the competition.
Russia’s subsoil agency Rosnedra, late last month, rejected the bid of Nord Imperial, a unit of ONGC’s Russian firm Imperial Energy, on the grounds that it lacked financial capability to develop the Arctic fields. “Nord Imperial had on 21st September submitted an application for qualification to bid for rights to develop the 1.02 billion barrels Trebs and Titov fields in Timan-Pechora, in northwest Russia,” said an official with information about the bid.
“The bid clearly mentioned that Nord Imperial will have financial backing and support of its parents Imperial Energy and ONGC Videsh Ltd,” the official said. “Clearly, the Federal Agency for Management of Mineral Resources chose to ignore financial support letters from OVL while deciding to disqualify Nord Imperial.”
The Russian agency also stated that Nord Imperial had failed to present the approval of the company’s board, or shareholders, for the bid, which statement the Indian executive rubbished saying that the application was accompanied by a company board resolution. “These are nothing but flimsy grounds to keep competition away,” he said.
Among the other companies that were disqualified were Russia’s own Lukoil and Gazpromneft, and BP’s Russian joint venture TNK-BP, apparently for some unspecified errors in their applications. Analysts suggest that Rosnedra disqualifying most of the six contenders was tailored to pave the way for local oil firm Bashneft to win the contract. Surgutneftegaz, the other firm to qualify for the 2nd December tendering for the fields, was kept in the race to lend a veneer of competition.
Bashneft is part of the politically well-connected Sistema group, owned by Vladimir Yevtushenkov, who is said to have received support from President Dmitry Medvedev, according to one media report. Reports suggest that TNK-BP and Lukoil plan to challenge the disqualification in court.
Trebs and Titov, Russia’s largest undistributed fields, may hold more than 200 million tonnes of recoverable reserves. This is about half the reserves of Rosneft’s Vankor, the country’s largest new oil development. The deposits will be sold at a government auction on 2nd December.
Nord Imperial is part of Imperial Energy, which ONGC Videsh Ltd (the overseas investment arm of the state-owned firm) had acquired in 2008 for $2.1 billion.
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