ONGC-Videsh Ltd. (OVL) has bid for Russia's strategic Trebs and Titov oil fields, even as its proposed bidding partner, Rosneft, has pulled out of the race.

OVL submitted its application on Monday through Nord Imperial, which is part of Imperial Energy, an OVL subsidiary in Russia, hours before the bidding closed.

The Indian company is the only foreign bidder competing for what has been described as a “jewel” among the Russian oil reserves. OVL faces tough competition from five Russian rivals — LUKOIL, Russia's No.2 oil producer, TNK-BP, half-controlled by British Petroleum, Gazprom, Russia's natural gas monopoly, Surgutneftegaz, Russia's fourth-largest oil producer, and mid-sized firm Bashneft.

Russia's Natural Resources Minister Yuri Trutnev said that OVL would probably have to look for a Russian partner in the project. The strategic status of the auctioned oil fields requires such partnership and rules out majority private ownership. The other possibility for OVL is to seek Russian Government approval for investment in a strategic asset. However, Mr. Trutnev doubted OVL would choose this path.

“The deposits are classified as strategic, and so it is up to a government commission to decide whether [OVL] can participate alone, but I doubt that will be the case. I would be surprised,” Mr. Trutnev told reporters on Tuesday.

OVL signed an agreement in December with Russian AFK Sistema group to study and explore opportunities in Russia and third countries. Sistema controls OAO Bashneft, which has bid for Trebs and Titov.

Meanwhile, Rosneft's President Eduard Khudaynatov was quoted as saying that his company would consider joining the project if a potential partner wins the bid. He did not say which of the six bidders he had in mind, but earlier Rosneft sources named OVL as a potential partner for Trebs and Titov.

The two fields, located in the Arctic, may hold more than 200 million tonnes of recoverable reserves and are the largest untapped oil and gas deposits in Russia.

The tender is slated for December 2, with a starting price of 18.2 billion roubles ($587 million). Experts said the final price might be significantly higher.

Under the terms of the tender, the winner must process at least 42 per cent of the output at its own refineries and sell at least 15 per cent of the products via a Russian commodities exchange.

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