Actualization of licensing agreements should ensure the sustainable development of the economy

25 february 2015

The round table "Actualization of the licensing agreements for the right to use a site of subsurface resources as an instrument of anti-crisis policy in the energy sector" took place at the Analytical Center.

The roundtable is conducted as a part of an implementation of the paragraph 48 of the Plan of priority measures to ensure the sustainable economic development and the social stability in 2015 approved by the Government of the Russian Federation on January 27, 2015. In accordance with the Plan these measures will increase the fuel and energy complex efficiency.

During the roundtable experts discussed selection criteria for license agreements, which are subject to updating or revision of their implementation conditions, as well as considered support measures for subsurface resources users working on projects with high financial risk.

Vera Bratkova, the Head of Research of the FBI "State Commission on Mineral Reserves" talked about the new classification of hydrocarbon reserves. "The basis of the new classification of reserves is an economic evaluation of hydrocarbon reserves development prospects performed with varying degrees of detail in accordance with the stage of the development of fields", the expert said. A significant decline in license obligations of subsurface resources users, related to exploration works, can lead to a negative-inertial scenario of the FEC development in the medium term, according to Ms. Bratkova. "In this regard, we have developed a few suggestions of a possible new classification of reserves. It includes the definition of projects, in which the government support will help to determine points of growth in today's oil prices, including by reducing administrative barriers, as well as the need to create conditions for the development of public-private partnerships for infrastructure clusters, containing fields with small and hard to recover reserves" said the expert. In addition, it is necessary to create conditions for new innovative solutions for the development of hard to recover reserves and to enable the separation of licenses for oil and gas fields, that will allow us to develop the new oil rim more rapidly, considers the expert. 

"Oil and gas companies are in a difficult situation in the current environment due to lower energy prices. Of course, this is not the most vulnerable part of the Russian business, but at the same time it is a strategic organization that has a significant impact on the economy as a whole", said Alexander Kurdin, the Head of the Department for Strategic Studies in Energy of the Analytical Center. The Government in its anti-crisis plan gives a special place to actualization of licensing agreements, which are issued to the subsurface resources use companies, according to the expert. “In this area there are both an initiative of Rosnedr (Federal Subsurface Management Agency), and the order of the President. But companies believe that the new actualization will bring a number of problems. Ultimately, it may be that the effect of the current version of the anti-crisis program would be quite limited”, said Mr. Kurdin. Therefore it is possible that companies will try to correct this process, despite the fact that relevant documents for actualization have been prepared, according to the expert. “There are some claims from the scientific community. After all, besides the actualization of conditions, we need to carry out a certain amount of work for exploration and drilling", said Mr. Kurdin. “Crisis conditions should not affect these processes”. The expert added that views, collected during the roundtable, will be integrated and presented in Rosnedr.

The issue of updating license agreements is not as straightforward as it might seem at first glance, considers Artem Plaksin, the Head of the Center for Monitoring and expertise of the Committee on Energy Policy and Energy Efficiency of the Russian Union of Industrialists and Entrepreneurs. "The current criteria cause discussions among subsurface resources' users and even some doubts about their effectiveness" the expert said. The issue has not been resolved by the government or stakeholders, so there is the possibility to find common ground to improve the efficiency of actualization, to ensure sustainable development of the economy in fact, and not just on paper, according to Mr. Plaksin.