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Russia's Novatek may bid for Alrosa gas assets - Report

Gasoil News - Published on Tue, 02 Jan 2018

Image Source: Reuters
Reuters reported that Russia's top non-state gas producer Novatek may bid for gas fields owned by Russian diamond miner Alrosa, but oil giant Rosneft may stay away from the auction, citing tight deadlines, the companies signalled. Alrosa, the world's largest producer of rough diamonds, said this week it would sell its gas assets in the Yamalo-Nenets Region in a Feb. 19 auction with a starting price of RUB 30 billion.

Novatek said that the potential deal is subject to the approval of Russia's Anti-Monopoly Service, and Novatek has already informed the agency of its interest in buying Alrosa's gas fields. It declined further comment.

Rosneft spokesman Mr Mikhail Leontyev said that Russia's top oil producer Rosneft, however, is unlikely to take part in the auction because it believes the conditions are not transparent enough and do not give potential buyers enough time to prepare their bids.

Rosneft's absence from the auction could reduce competition for the assets.

In 2013, Rosneft agreed to buy the same gas assets and other gas fields in Russia's far eastern region from Alrosa for USD 1.4 billion, in a drive to expand its natural gas business. But the deal fell through because of disagreement over price. As of 2013, the fields were supposed to increase Rosneft's recoverable gas reserves by more than 200 billion cubic metres (bcm).

However, Russia will be on New Year holidays from Jan. 1 to 8. Under the terms of the auction, the 21-billion-rouble deposit must be paid by Jan. 10.

According to Rosneft, the two remaining working days do not provide enough time to make a decision and submit the deposit.

Mr Leontyev said that "It is indecent. They believe that everyone has gone on a binge ahead of the holiday and they file the auction conditions. Why do you hurry up? Especially when the deposit is 70 percent of the starting price."

He said that "We are unlikely to take part in such an auction. We do not believe in the possibility of conducting the auction with such parameters."

The Finance Ministry, which oversees Alrosa, said the auction terms are "logical and clear". It added that there have been seven potential bidders.

Source :

Posted By : Rabi Wangkhem on Tue, 02 Jan 2018
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