Khanty-Mansiysk tender fails to draw investors
Thursday, Oct 12, 2017
A recent tender by Rosnedra for acreage in Russia’s Khanty-Mansiysk region has been declared a failure, after it attracted bids for only one of the 13 blocks on offer.

The state subsoil agency tried to auction off the plots, containing a total of 30 million tonnes (220 million barrels) in D1 oil reserves, in September.

However, only the West-Livadsky block in the southeastern district of Nizhnevartovsk attracted any interest. Rights to the subsoil area were secured by Lukoil-Western Siberia, a local branch of Russia’s biggest privately run oil company.

Auctions for the remaining blocks – Kalinovy, Kotigegansky, Litvakovsky, Sote-Yugansky, South-Trekhozerny, Yanlotsky, Borovoy, East-Kamsky, East-Tolumbsky, West-Bakhilovsky, West-Vandmtorsky and West-Nikolsky – were declared invalid.

Starting prices for the plots ranged from 24.6 million rubles (US$422,000) to 318 million rubles (US$5.45 million). The most expensive block on offer was East-Kamksy, located in the Khanty-Mansiysk district. According to Rosnedra, the plot holds 5.31 million tonnes (39 million barrels) in C1+C2 and over 2 million tonnes (15 million barrels) in D0+D1+D2 hydrocarbon reserves.

West-Livadsky contains an oilfield of the same name that was identified in 2000. The block has over 3 million tonnes (22 million barrels) in C1+C2 and around 6 million tonnes (44 million barrels) in D1+D2 hydrocarbon reserves.

Lukoil paid 206 million rubles (US$3.53 million) for the licence, versus an initial asking price of 188 million rubles (US$3.22 million). It saw off a rival bid from a small local company called Argos.

West-Livadskoye is nestled in between a cluster of larger Lukoil fields already in production. These include the Kurraganaskoye, Maloklyuchevoye, North-Potochnoye, North-Pokachevskoye, Pokachevskoye and South-Pokachevskoye deposits.

Khanty-Mansiysk is Russia’s most prolific oil producing region, accounting for nearly 45% of national output last year. But the region is fighting to arrest production decline as its older Soviet-era fields reach maturity. Local authorities hope that the award of new licences will help find new fields and bolster extraction in the long run.

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