OREANDA-NEWS. September 29, 2010. A Rosnedra source said that only two companies, Bashneft and Surgutneftegaz - out of six bidders - had been officially admitted for participation in a license tender for the Trebs and Titov greenfields. The other contenders, Gazprom Neft, LUKOIL, TNK-BP, and ONGC, were not considered eligible bidders for different technical and financial reasons by the Rosnedra tender commission, reported the press-centre of OTKRITIE Financial Corporation.

View: We believe Rosnedra’s decision has increased considerably the chances of either Bashneft or Surgutneftegaz eventually winning the Trebs and Titov license tender. Meanwhile, we think the other contenders still retain slender chances of joining the tender process at a later stage, after clearing their technical and financial issues with the Rosnedra commission. The license tender is supposed to close and the winner to be announced on 2 December. Of those bidders not admitted to the tender at this stage, we expect at least LUKOIL to appeal the tender commission’s decision and attempt to file the missing documents before the tender close.

The Trebs and Titov fields are located close to LUKOIL’s existing production and transportation assets in the Nenets region, which would make their development less expensive. That said, we believe market participants will now view Bashneft as the frontrunner of the license tender: Of the two selected bidders only Bashneft has sufficient refining capacity available to process 42% of the potential oil output from the Trebs and Titov fields.