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. Last Updated: 07/27/2016

LUKoil, Rosneft to Retain Licenses

bloombergAn all-terrain vehicle driving past a storage tank at Vankor, one of the oil fields cleared by the government Friday.
The Federal Subsoil Agency dropped complaints against Rosneft and LUKoil, the country's two largest oil producers, for violating licenses, Interfax said Friday, citing an unidentified person close to agency.

Rosneft and LUKoil had remedied the violations and will keep their licenses to the Siberian and Far East oil fields in question, Interfax reported.

The agency's license-revocation commission Friday reviewed Rosneft's licenses to the Vankor, Vostochno-Lodochny, Zapadno-Lodochny and Nizhnebaikhsky fields, which will help fill an $11 billion oil pipeline Russia is building across eastern Siberia to ship fuel to growing Asian markets.

Vankor holds recoverable reserves of 490 million tons of oil and when fully developed will have capacity of 660,000 barrels per day, or about 7 percent of the country's current output. Rosneft and Surgutneftegaz, Russia's fourth-biggest producer, said they would provide a combined 540,000 bpd for the pipeline by 2009, state-run news service RIA-Novosti reported last week.

The commission also reviewed licenses held by two units that LUKoil acquired from Marathon Oil last year.

Russia is building an $11 billion pipeline across eastern Siberia to ship fuel to growing Asian markets and encourage companies to develop the region's untapped fields and maintain its position as the world's largest producer of raw fuels. President Vladimir Putin is using Russia's resource wealth to increase the country's political status.

The Financial Times reported Saturday that Natural Resources Minister Yury Trutnev warned TNK-BP, the country's third-largest oil producer, that its license to develop the Kovykta gas field in eastern Siberia might be revoked and auctioned.

Trutnev told reporters on a trip to Luanda, Angola, that TNK-BP would not have time to rectify breaches of its license to develop the gas field in time for a May deadline, the Financial Times reported.

Companies with a foreign-owned majority would be banned from bidding for the license if it is revoked and auctioned, Trutnev said.