Russia’s strategic deposits should be sold only at auction and not by tenders, President Vladimir Putin said on Tuesday.
“Federal deposits, that is, deposits with reserves of over 70 million metric tons of oil and over 50 billion cubic meters of natural gas, must be allocated only through auctions, without any tenders,” Putin told a meeting of the presidential commission on the fuel and energy sector.
Tenders have demonstrated poor efficiency and non-transparency, while auctions enable the government to earn more money, the president said.
Russia will continue its policy of selling off state energy assets, whilst taking into account the fuel and energy sector’s contribution to the economy, he said.
“No doubt, we need to proceed taking into account the special significance of the fuel and energy sector’s contribution to the budget and the issues of energy security, which are also important. Environmental issues must also come to the fore,” Putin said.
The list of federal deposits was prepared by the Federal Agency for Natural Resources in August 2008 and consists of 985 overland deposits, including 163 hydrocarbon fields.
Russia’s legislation lists deposits as having federal or strategic significance if they contain reserves of uranium, diamonds, especially pure quartz raw materials, nickel, beryllium, tantalum, lithium, niobium and platinum metals. These deposits also include fields with recoverable reserves of over 70 million tons of oil, 50 billion cubic metes of natural gas, 50 tons of vein gold, 500,000 tons of copper.
Russia has substantially liberalized its policy in the fuel and energy sector where 25 percent of its assets are now held by foreign companies, he said.
“Russian oil and gas companies operate in global energy markets and are frequently the leaders in attracting foreign investment. Thus, today about 25 percent of the entire [domestic] industry is owned by foreign investors,” he said.