Oil companies might get access to offshore oil deposits if they are Russian owned, experienced in offshore development and have sufficient financial resources to fund the project, according to Denis Khramov, Deputy Minister of Natural Resources, Vedomosti reports. Foreign shelf development experience is also appropriate, the newspaper says.
Lukoil might potentially get access to the Russian shelf if the abovementioned changes replace the current legislation, as it satisfies the requirements. The company requested similar amendments to the law at the end of 2013, as it was interested in a production licence for its Centralnoye field in the Caspian Sea, two licences in the Baltic Sea and one in the Barents Sea.
In the current macro environment, we doubt that companies would allocate any sizable resources to the development of offshore greenfields. Although the news can be considered as sentiment-wise supportive for Lukoil, it will have no visible impact on the company’s fundamentals, we think. Therefore, we view the news as neutral for Lukoil at this moment.
To recap, the current provision of subsoil usage law stipulates that licences for developing offshore oil deposits can only be granted to state-owned companies. The possibility of allowing independent companies to develop shelf projects has been actively discussed since the sanctions against Russian oil companies were introduced. The Ministry of Energy, Ministry of Economic Development, Ministry of Natural Resources and the Federal Antimonopoly Service are due to prepare their official positions on the issue by 20 April.