Thursday, August 12, 2010

Russia Sets Stringent Terms and $603 Million Fee for Trebs and Titov Oil Fields

The Russian Federal Subsoil Resource Use Agency has settled on a starting price of 18.2 billion rubles ($603 million) for the massive Trebs and Titov oil fields, the development rights for which are scheduled to be auctioned in the fourth quarter of this year. The winning bidder must commit to selling 15 percent of the fields' crude on an exchange and refine 42 percent in Russia. Virtually all of Russia's oil companies have expressed an interest in the tender, and at least two may consider partnering with an international oil company for the bid. Foreign companies are only allowed to bid on the oil fields in a consortium led by a Russian company and would also need to be approved by the government's commission on foreign investments. These conditions are thought to make the project less attractive to potential foreign investors.

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