Bashneft rightfully claimed victory in the tender for licenses to the Trebs and Titov field located in the Nenets autonomous district, though no actual competitive bidding took place.

The tender for the rights to develop the giant Trebs and Titov fields in the Nenets autonomous district was to be hosted by the federal subsurface agency Rosnedra. The bid that Bashneft put in for the license was RUR 18.476 billion, while the starting price was RUR 18.171 billion. According to the Deputy Minister of Natural Resources Mr. Sergei Donskoi, Bashneft could well obtain the licenses to the two fields before the end of 2010. 

The tender commission protocol will soon be passed along to the Russian government that will take the final decision in relation to confirming the tender results. Once the results are confirmed, the subsurface agency Rosnedra will present the license to Bashneft, requiring the company to make one payment in full within 30 days.

As a matter of legal technicality, the Trebs and Titov tender was held never to have taken place. Only one bid was considered. At the same time, because the feasibility study appeared satisfactory to the tender commission, its decision was to award the licenses to the fields to Bashneft.

Inside sources with Bashneft have given confirmation that on December 2 the company conducted discussions with the Rosnedra commission, defending the feasibility study it had prepared to develop the deposits. A detailed report about the tender will be prepared only after the decision of the commission will be finalized. 

So far, the tender commission made the decision to recommend Rosnedra to prepare a draft decision for the Russian government to ascertain the results of the tender and to provide Bashneft the rights to extract subsurface resources at the Roman Trebs and the Anatoly Titov oil deposits. The total estimated C1 reserves at the two fields are 89.73 million tons. C2 reserves stand at 50.33 million tons, while C3 reserves total 59.29 million tons. D1 reserves are 70 million tons.

According to pre-tender announcements, six companies entered applications to bid in the tender, including Bashneft, Surgutneftegaz, Gazprom Neft, Lukoil Komi, a subsidiary of Nord Imperial, as well as Samotlorneftegaz, which is a subsidiary of TNK-BP.

The applications of only two of these companies were accepted, those of Bashneft and Surgutneftegaz. As Surgutneftegaz did not present a security deposit for the tender, it was not allowed to advance to the bidding stage of the tender. Once the market participants realized that only one company would participate in the tender, Rosneft and Lukoil made an offer to Bashneft to develop the sites together.    

Experts forecast that the price tag for developing the Trebs and the Titov fields will be from RUR 225 to RUR 268 billion. These figures do not include the price for the grant of the license awarded during the tender. The cost of extracting a barrel of oil at the deposits is forecast to be USD 14.