Gazprom Wins Huge Field in Yakutia

The Cabinet on Monday agreed to hand one of the country's biggest oil and gas fields over to Gazprom without a competition, acting on orders from President-elect Dmitry Medvedev.

It marks the first time in post-Soviet Russia that a company has received a field without having to fight off rival bids, a Gazprom source said.

All Gazprom will have to do is pay at least 8 billion rubles ($342 million) to 10 billion rubles for the license to develop the rich Chayandinskoye deposit in Yakutia, Deputy Industry and Energy Minister Andrei Dementyev said.

Rights to extract natural resources normally go to the highest bidder.

Prime Minister Viktor Zubkov, who approved the handover at a Cabinet meeting Monday, has been nominated by the government for Gazprom's board and is likely to become its chairman.

Current Gazprom chairman Medvedev instructed ministers in February -- in his other capacity as first deputy prime minister -- to make sure that Gazprom gets the field quickly.

Opposition came from Natural Resources Minister Yury Trutnev, who as recently as the end of last month reiterated his position that Gazprom must compete for the development rights.

Dementyev said a Natural Resources Ministry representative gave his approval at the meeting to hand the field straight to Gazprom. The law, Dementyev said, allows the government to act in this way with gas fields deemed strategic, such as Chayandinskoye.

Natural Resources Ministry spokesman Nikolai Gudkov said Monday evening that he had not yet heard from Deputy Minister Alexei Varlamov, who represented the ministry at the meeting.

Zubkov is expected to sign the handover decree in the next few days, so that Gazprom is able to begin developing the field this year, Dementyev said. Under a government plan, the field must go into operation in 2016, he added.

Gazprom will have to modify this year's spending plan, which currently stipulates capital investment of 479.4 billion rubles ($20.5 billion), Dementyev said.

"Everybody is excited," the Gazprom source said on condition of anonymity because she was not allowed to talk to the press.

Chayandinskoye, listed by the government as strategic in a November decree, holds 1.2 trillion cubic meters of gas and 50 million tons of oil.

Gazprom is the country's only company with sufficient resources to fund the field's development, said Konstantin Batunin, an analyst at Alfa Bank.