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RIA Novosti: Foreigners to face tougher procedure to access Russian shelf

19:00 | 25/ 01/ 2007 

MOSCOW, January 25 (RIA Novosti) – The procedure by which foreign investors gain access to the Russian continental shelf will be toughened, the Russian natural resources minister said Thursday.

“As these are strategic interests, a tougher procedure will be introduced to grant foreigners access to the shelf,” Yury Trutnev told journalists.

A respected Russian business daily said Monday that all gas and oil fields on Russia’s continental shelf would be placed under the control of state-controlled Gazprom [RTS: GAZP] and Rosneft [RTS: ROSN].

Vedomosti said the two Russian energy giants would divide shelf projects between them equally. The paper’s source said the move was the result of an “unwillingness to give foreigners access to large stakes in the deposits.”

In addition, the newspaper said, shelf fields would be distributed at tenders, not auctions.

“The difference is that the sum is not the main criterion at a tender. The envelopes can even remain closed if the commission deemed technical and environmental terms of the applicant optimal,” Vedomosti wrote.

Speaking about Gazprom and Rosneft, Trutnev said the companies had significant experience developing shelf deposits.

“They have considerable reserves – they are two of just a few companies that have shelf experience, and that experience will be used,” he said.

A Natural Resources Ministry spokesman said earlier that interested ministries and departments were considering the shelf deposit transfer issue. He said the issue was discussed at a government meeting, but said there was no final decision yet.

Commenting on media reports, Trutnev also said that no final decision had been made on the formation of a joint venture to develop Russian shelf deposits involving Gazprom and oil company Rosneft.

“A decision to create a new company to develop shelf deposits has not yet been made,” he said. “It is possible that Gazprom and Rosneft will be involved.”

A month ago Gazprom acquired 50% plus one share in the vast Sakhalin II oil and gas project off Russia’s Pacific Coast for $7.45 billion.

Anglo-Dutch oil major Shell previously held a 55% stake, while Japan’s Mitsui and Mitsubishi owned 25% and 20%, respectively.

The operator’s raising of its project cost estimate to $22 billion infuriated Russian authorities, since under the production-sharing agreement behind the project signed in the 1990s, Russia only receives a share of the profit once the operator has recouped all costs.

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