RusEnergy

25.10.2005 Financial Times - Russia yesterday published a list of oil, gold and copper reserves which it considers strategic and which will be off limits for foreign investors. Analysts said the lists appeared to be shorter than had been feared and would allow foreign companies to bid for licences for all but the largest reserves. Yuri Trutnev, natural resources minister, said only three large oil and gas fields - one in eastern Siberia and two in the Timan-Pechora region - would be off limits to foreign companies. He earlier said this would apply to any company with foreign ownership over 50 per cent and could include TNK-BP, the Anglo-Russian oil venture. Mr Trutnev said the government would also restrict access to fields with reserves of more than 150m tonnes (1bn barrels) of oil and 1,000bn cu m of gas. Steven O'Sullivan, head of research at UFG, the Moscow investment bank, said it was not clear whether the government would impose any other criteria as well. Steven Dashevsky, oil and gas analyst at Aton Capital, a Moscow brokerage, said that this was good news for foreign energy companies. “This is a foreign investor friendly gesture by the state and means foreign companies will still be able to participate in auctions for very sizeable fields,” said Mr Dashevsky. Chris Weafer, chief strategist at Alfa Bank, said Russia had not auctioned any significant licences for natural resources for the past seven years. He argued that the decision to award new licences followed the centralisation of government control over oil and gas industry. In the past year the government tripled the size of Rosneft, its national oil company, and raised its stake in Gazprom, the gas monopoly, to 51 per cent. “One of the reason we are now seeing progress on long-outstanding issues such as award of licences is that the state itself now has the vehicles by which it itself can take a dominant role in those licences,” Mr Weafer said. The strategic list includes the Titov and Trebs oil fields in Timan-Pechora with oil reserves of 57m tonnes and 82m tonnes respectively, and the Chayandinskoe field in east Siberia with gas reserves of 1241bn cubic metres. The government also declared off limits the copper deposits of Udokan, which accounts for 40 per cent of all Russian reserves, and Sukhoi Log, Russia's biggest untapped gold deposit. The new law is expected to come into force in the second half of 2006. Mr O'Sullivan, said Gazprom was likely to be interested in the gas field, while Rosneft could be interested in the Timan-Pechora fields. For regional reports, www.ft.com/europe