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. Last Updated: 07/27/2016

Rosneft and Gazprom Set to Carve Up Offshore

State-controlled energy giants Rosneft and Gazprom have agreed on splitting offshore deposits, limiting foreign and private access, an official said Tuesday.

The government official, who asked not to be identified, said the two firms last year signed an agreement under which Rosneft will develop oil deposits on the country's northern shelf, while Gazprom will explore gas fields.

The agreement has yet to receive government approval, the official said.

Gazprom and Rosneft declined to comment.

Russian media reported last year that the government was discussing splitting strategic shelf deposits between Rosneft and Gazprom by holding closed auctions of the fields, which could reduce cash proceeds but exclude surprise bidders.

State officials have repeatedly favored state firms for offshore fields, which are due to replace western and eastern Siberia in the second half of this century to support Russian oil and gas output growth.

According to the country's subsoil law, only companies that have a state shareholding of more than 50 percent and previous experience of working on the shelf can develop oil and gas deposits offshore, far eastern and northern seas.

Gazprom is developing the huge Shtokman gas field in the Barents Sea and controls the offshore Sakhalin-2 project.