Their joint venture may again obtain a license for the Trebs and Titov fields

Bashneft and LUKOIL may be able to regain the rights to jointly develop the Trebs and Titov fields. Now the clause according to which all extracted oil can be processed only at the facilities of its owners has already been removed from the licenses. And the Ministry of Natural Resources has already supported the next stage - the return of development rights to the joint venture of Bashneft and LUKOIL.

The Ministry of Natural Resources allows for the possibility of re-issuing the license for the development of the Trebs and Titov fields from Bashneft to its joint venture with LUKOIL - Bashneft-Polyus, the head of the department, Sergei Donskoy, told Interfax yesterday. According to him, changes are now being made to the license. “The next stage is re-registration as a joint venture,” said Mr. Donskoy. He noted that companies have not yet submitted applications for re-registration. Bashneft and LUKOIL did not comment on this topic yesterday.

Bashneft was the original owner of the rights to develop the Trebs and Titov fields - it received a license following a competition back in October 2010. The decision was accompanied by a scandal: the applications of other contenders - Gazprom Neft and subsidiaries of LUKOIL, TNK-BP, ONGC - were rejected for formal reasons, and Surgutneftegaz itself refused to participate in the competition. The only major oil company that did not show interest in him was Rosneft. However, Bashneft did not develop the sites on its own - the company decided to create a joint venture with LUKOIL, which is the owner of the infrastructure necessary for this in the Nenets Autonomous Okrug. In Bashneft-Polyus, LUKOIL at the end of December 2011 for 4.8 billion rubles. received 25.1%, the license was reissued.

One of the conditions of the competition was that the license holder must process the produced oil at its own facilities. As Sergei Donskoy said yesterday, “in the form in which the license was issued following the results of the competition, there were a number of inaccuracies and double interpretations.” This led to the fact that Bashneft’s minority shareholders were outraged by LUKOIL’s participation in the project and appealed to the Moscow Arbitration Court. Similar claims were expressed in a letter to Vladimir Putin, who held the post of Prime Minister at that time, by State Duma deputy from the LDPR Sergei Karginov. As a result, Rosnedra themselves canceled the order to reissue the license for the joint venture, leaving it to Bashneft.

However, Kommersant sources close to Bashneft-Polyus claimed back in June that the license would be returned to the joint venture “within a couple of months.” This issue was submitted to a government commission headed by Deputy Prime Minister Arkady Dvorkovich, which instructed Rosnedra to clarify the terms of the license agreement. Bashneft has already submitted an application to change the conditions, which will allow a structure that is not the direct owner of the refining facilities to hold a license, Deputy Head of the Ministry of Natural Resources Denis Khramov said at the beginning of the week. “To ensure that everything is interpreted unambiguously, changes are now being made,” the Minister of Natural Resources said yesterday.

Gazprombank analyst Alexander Nazarov believes that the license of the joint venture of Bashneft and LUKOIL will be returned, since the development of the Trebs and Titov fields is strategically important for them: both companies need to increase production. At the same time, LUKOIL continues to reduce oil production in the region, so its infrastructure may remain underutilized if the project is not implemented.

Kirill Melnikov

The Ministry of Natural Resources supported Bashneft and LUKOIL