We see the potential liberalisation of offshore regulations as positive for non state-owned companies and the sector, were it to materialise. However, given how long the discussion over offshore projects has lasted, the outcome is uncertain at this point. Government-owned oil and gas companies’ opposition to the proposal by the Ministry of Natural Resources to cut the exploration period to 3-5 years is logical.
That would lead to a substantial (and unrealistic) increase in the capital investment program over the next 3-5 years, or to Rosneft and Gazprom pulling out of most licences. However, reallocating the licenses among the sector, including to independent players, would be positive. Overall we do not expect any market reaction to the news, unless some clearer moves towards liberalisation are made.