UPDATE: Russian antitrust opposes Sukoi Log auction requirements

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MOSCOW, Aug 18 (PRIME) -- Russia should not allow for an auction for the development of the Sukhoi Log gold deposit only companies with state participation of no less than 25%, Deputy Head of the Antimonopoly Service Rachik Petrosyuan told PRIME on Thursday.

“From the point of view of Russia’s Federal Antimonopoly Service, the draft ruling on auctioning the Sukhoi Log deposit should be adjusted significantly. In particular, the Russian Federal Antimonopoly Service believes the requirement to allow companies, in which no less than 25% is owned by the state, to participate in the auction is unfounded,” Petrosyan said.

“Why do other companies, which meet requirements of legislation, cannot take part in the auction?” he said, adding that the more companies participate in the auction, the more money the budget will receive.

The Sukhoi Log is one of the largest undeveloped fields with forecast gold reserves estimated at 1,953 tonnes and silver reserves at 1,541 tonnes.

Natural Resources and Environment Minister Sergei Donskoi said that the ministry plans to announce the date of an auction for the Sukhoi Log gold deposit in Siberia’s Irkutsk Region in September.

“Maybe at the beginning of September. But it will probably be within a month,” he said.

The government has been planning to auction Sukhoi Log for several years. Rostec, Polyus, Polymetal, Nordgold, Kinross and GV Gold expressed interest in the asset.

Business daily Vedomosti reported in July that the ministry had raised the starting price for Sukhoi Log to 8.6 billion rubles from 5 billion rubles and said only companies in which the Russian government directly or indirectly owns over 25% could take part in the auction.

Donskoi also said the ministry had offered President Vladimir Putin not to change a government ruling on holding an auction for the Erginskoye oil field in the Khanty-Mansi Autonomous District and not include requirements to attract a foreign investor in the auction conditions.

The field’s recoverable oil reserves under C1 and C2 categories stand at 103 million tonnes. Several companies, including oil majors Gazprom Neft and Rosneft, Independent Oil and Gas Company, Surgutneftegas, Novatek, and Lukoil, already expressed interest in the field.

(63.9943 rubles – U.S. $1)

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