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15 Apr, 2008 03:51

Gazprom handed Russia’s largest untapped field

The government has given energy major Gazprom the rights to develop the Chayanda oil and gas field on a no-bid basis. The gas giant will pay $US 425 million for the licence.

Chayanda, located in Yakutia, is the largest untapped field in Russia.

The Ministry of Natural Resources had wanted to auction off the licence for field development but faced opposition from Russia’s Industry and Energy Ministry.

The latter insisted on transferring the field to Gazprom without a tender, under a loop-hole in the law.

“While legislation requires fields to be assigned through auctions and bidding, the gas law has an exception saying that the fields included in the list of strategic fields may be assigned by the government to the owner of the unified gas supply system, i.e. to Gazprom, without competition,” said Deputy Industry and Energy Minister Andrey Dementyev

“The decision to assign the Chayanda field to Gazprom was made within the framework of that provision,” he added.