Oligarchs Fight Over Oil in Yakutia Republic

No one knows who is going to develop the very rich oil deposit in Yakutia

To all appearances, there are some exclusive plans for the Talakansky oil deposit in the republic of Yakutia. The auction for the right to develop it has been officially cancelled twice already. The new date for the auction is to be announced by the end of the current year.

The decree was signed by Deputy Minister for Natural Resources Pyotr Sadovnik and by first deputy chairman of the Yakutia republic government, Egor Borisov. These two men were not at all confused by the resolution from Prime Minister Mikhail Kasyanov. The prime minister of the Russian government particularly wrote in that document that the competition for the right to develop the Talakansky deposit was supposed to take place in duly. It just so happens that Mikhail Kasyanov is not the most important figure in this matter. It is not hard to guess why, though.

The newspaper Vremya Novostey wrote that it was the second infringement upon the instructions from the Prime Minister of Russia. For instance, bankruptcy proceedings against the coal company Dalvostugol were instituted contrary to what Mikhail Kasyanov said on the subject.

Russia’s largest oil companies that applied to participate in the competition for the development of the Talakansky deposit are certain that the auction was cancelled because of the Rosneft-Gaprom tandem. Both of these companies are chaired by Vladimir Putin’s people, Aleksey Miller and Sergey Bogdanchikov. The applications were filed by the oligarchs of the “Yeltsin era” – Yukos, Sibneft, TNK. Why would state structures pay anything for the auction to break the prices for old oligarchs?

The Vremya Novostey newspaper wrote with reference to an anonymous source in the gas industry that there was a correct decision made as a result. At the end of the day, the state has not yet defined its strategy for the development of oil and gas deposits in East Siberia.

The fight for the development of the Talakansky deposit turns out to be a fight between giants, Gazprom and Rosneft, on the one hand (Putin’s companies) and Sibneft, Surgutneftegaz, TNK, and Yukos, on the other hand (Yeltsin companies). Putin’s companies used their administrative resources: the Russian Natural Ministry adjourned the announcement of the final list of candidacies for the auction. The head of the Ministry for Economic Development and Trade, German Gref, also expressed his dissatisfaction regarding the organization of the auction. The minister did not doubt at the end of October that the unfortunate auction would be cancelled and reconsidered.

The Ministry for Economic Development and Trade was not happy about the absence of the property complex evaluation. It goes about the property that was set up on the Talakansky deposit by its previous developer, the company Sakhaneftegaz. In addition, as German Gref believes, the starting price of only $56 million should be raised up to the “real market value.” The minister also wants to reconsider investment volumes, which were fixed in the sum of 150 and 200 million dollars for the first and the second years of development respectively. German Gref believes that it is impossible to spend that money in accordance with the original schedule. The minister also questioned the issue of building a refinery on the Talakansky deposit, since there are five refineries working not far away.

Those little things were not much of a deal for Russian officials before, when it came to the privatization or oil licences. That is why some participants of the cancelled competition thought that the problems were caused by their competitors.

The heads of the giant companies Yukos, TNK, and Sibneft complained to Vice Prime Minister Viktor Khristenko. Minister for Energy Igor Yusufov wrote a letter to Mikhail Kasyanov with a request to look into the matter. Yet, it turned out that even the prime minister could not do a thing about it.

Sergey Bogdanchikov, the president of the company Rosneft, sent a letter to Minister for Nature Vitaly Artyukhov on November 13th. In the letter, Sergey Bogdanchikov set out his dissatisfaction about the results of the competition. A similar letter was sent by Gazprom’s head Aleksey Miller. The offended party objected by saying that the auction’s conditions had been announced beforehand.

The distribution of licences for the development of the Talakansky and other deposits in Siberia and in the Far East of Russia cannot be strictly connected with the state program “The Development of Oil and Gas Resources.” This program has not been approved yet. According to this program, the company Gazprom has the status of coordinator of gas projects in the eastern part of Russia. Therefore, Gazprom will decide what to do, irregardless of what oligarchs might want.

However, the eastern part of Russia has absolutely no infrastructure. The project will cost $30 billion. Neither the government nor state monopolies have that kind of money. Gazprom and Rosneft will have to attract old, rich oligarchs for the development of oil and gas projects in the region anyway. Most likely, it will happen after the new presidential election.

Akhtyam Akhtyrov PRAVDA.Ru

Translated by Dmitry Sudakov

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