When it comes to bidding on oil fields, it's quite different from land auctions. It's not as simple as paying for a plot and owning it outright. Instead, the bids are for the rights to extract oil from the land.
The amount of oil reserves underground and the potential profits depend entirely on the bidder's assessment. It's a venture that carries both risks and significant opportunities.
"$1.5 billion!"
"$3.65 billion!"
"$5.89 billion!"
…
As soon as the auctioneer announced the start of bidding, mid-sized oil companies in the audience eagerly raised their paddles, driving the price past $12 billion in no time.
"$12.7 billion!"
"$12.8 billion!"
"$12.9 billion!"
…
"The gentleman with paddle number 17 has bid $12.9 billion! Do we have any higher offers?"
"$12.9 billion, going once!"
"$12.9 billion, going twice!" The female auctioneer called out excitedly from the stage.
This was a mid-sized oil field worth an estimated $52 billion. Based on Russian crude oil extraction costs, the cost of extracting a barrel of oil was approximately $10. In 2001, the international price of crude oil was around $30 per barrel.
This meant that out of the $52 billion worth of oil, about $17.2 billion would be spent on extraction. The remaining $34.8 billion would be the actual profit. However, under Russian oil taxation laws, approximately 75% of the profits would be paid in taxes (since the oil fields were state-owned, the tax rates were extremely high).
After accounting for these costs, if the oil field's actual reserves matched the exploration estimates, it would generate around $8.5 billion in net profit per year over the next ten years.
Typically, considering the inherent risks, oil companies wouldn't bid more than $14 billion for such a field. Beyond that point, the risk-to-reward ratio becomes unbalanced.
However, just as the auctioneer was about to finalize the deal, Mavi, sitting in the front row, casually raised his paddle and said, "$14 billion."
As soon as he spoke, the President of Russian State Oil, the CEO of Lukoil, and the CEO of Surgutneftegas all turned toward him in astonishment.
They hadn't expected Mavi, given his current wealth, to be interested in acquiring a mid-sized oil field. Could this young man be planning to snatch up every available oil field, big or small, to establish himself in the oil industry?
While the three industry veterans were contemplating this, the auctioneer enthusiastically banged her gavel and announced:
"$14 billion! The gentleman with paddle number 2 has bid $14 billion! Do we have any higher offers?"
"$14 billion, going once!"
"$14 billion, going twice!"
"$14 billion, sold! Congratulations to this gentleman for winning the AC16 block in the Caucasus region!"
Regardless of what others thought, Mavi had set his sights on the AC16 block.
And in the next round of bidding, he quickly identified another prime target—the AC19 oil field, which had an estimated value of $78 billion!
This shocked the President of Russian State Oil, Maxim, Lukoil CEO Oleg, and Surgutneftegas CEO Andreev. They genuinely believed that Mavi was going to buy up every available oil field in the auction!
"$2.18 billion," Mavi raised his paddle, confidently bidding against the oil industry heavyweights. When he wanted something, he never hesitated to go all in, using aggressive offers to break his competitors' psychological defenses.
"$2.18 billion! Going once!"
"$2.18 billion! Going twice!"
"$2.18 billion! Sold! Congratulations to this gentleman for winning the AC19 block in the Caucasus region!" the female auctioneer announced excitedly.
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### A Jaw-Dropping Display of Wealth
In just two rounds, Mavi had secured two oil fields with a combined estimated value of nearly $130 billion, for a total auction price of $3.58 billion.
His casual, decisive bidding left everyone stunned. The younger generation had arrived with overwhelming force!
The mid-sized oil companies in the audience were left devastated, many of them ready to walk out in frustration.
"My God… With his wealth, shouldn't he be competing for the largest field—the one valued at $332.5 billion? Why is he even bothering with these smaller $40-$50 billion oil fields? How are we supposed to survive?" a mid-sized oil company CEO thought bitterly.
He wasn't alone—everyone around him felt completely crushed by Mavi's extravagant spending.
"Boss, could you leave something for the rest of us? You dominated the first round, then the second… Are you planning to buy out the entire auction?" the other bidders wondered nervously.
However, they had completely miscalculated.
Based on his past-life knowledge and industry reports, Mavi knew that only these two fields he had just acquired were truly valuable.
If his memory was correct, these sites contained at least $180 billion worth of recoverable oil reserves.
Meanwhile, the highly hyped AC28 field, which supposedly contained $332.5 billion worth of oil, was a complete scam. Over the next decade, it would be lucky to produce $50 billion worth of crude oil.
---
### The Bidding for AC28 Begins
"Next up for auction is the AC28 block, the largest oil reserve in this auction! According to exploration data, it contains an estimated $332.5 billion worth of oil…" the female auctioneer announced with enthusiasm.
To Mavi, however, the announcement sounded almost ironic.
He was even a little amused, eager to see which unlucky fool would fall for the trap and pay a fortune for the field.
At that moment, he could feel the tense and hostile gazes from both sides—subtle but unmistakable looks of caution, vigilance, and even hostility from the executives around him.
He felt like a wolf being closely watched by the pack.
So, with a nonchalant gesture, Mavi placed his auction paddle on the side table, making it clear:
Go ahead, have at it. I'm out.
This left the Russian State Oil President Maxim, Lukoil CEO Oleg, and Surgutneftegas CEO Andreev utterly baffled.
"Wait… Why is he suddenly backing out? Is there something we don't know?"
---
(End of Chapter)