DENVER--The Russian Federation announced the opening of competitive oil and gas bidding yesterday, marking the first time a Soviet republic has conducted Western-style bidding for foreign contracts.

The move was an effort to reap hard currency and is part of Russian President Boris Yeltsin's goal to transform the republic's stagnant, centrally controlled economy to a free-market system.

Russia, which covers two-thirds of the territory of the Soviet Union, is one of the world's largest producers of oil and gas. Like many Soviet republics, it has begun wresting control over its natural resources from the central Soviet government.

Nearly 4 billion barrels of oil and 22 trillion cubic feet of gas were produced in 1990, which represents more than 90 percent of Soviet fuels production and export. To date, 1715 oil and 670 gas fields have been discovered in the republic.

"It has vast developed and underdeveloped reserves which may outstrip those of even the Middle East," said Edward Gendelman, president of Wavetech Geophysical Inc., the Denver-based company coordinating the bidding.

Wavetech is the western partner of Geointertech, a joint venture with the Russian government.

Despite the vast reserves, Russian oil production has dropped in recent years, due in part to aging equipment and inefficient management.

The bidding area is divided into 22 blocks and covers about 28,170 square miles.

A bidding conference today and tomorrow in Denver will detail for companies how the process will work. Sealed bids, which can be submitted by any oil and gas company, must be submitted by April 14, 1992. About 40 companies have signed up for the conference, Gendelman said.

"Business relations with Western companies are one of our highest priorities," said V.A. Dvurechensky, deputy chair of the Russian Federation's State Committee of Geology and Utilization of Energy Resources and Raw Minerals.

European companies have been more aggressive in pursuing the contracts than U.S. firms, he said, although Texaco and Conoco have both expressed interest.

"French, British and Norwegian companies are very active in trying to strike ventures there," Dvurechensky said.

Jack Holten, Wavetech vice president of exploration, said each of the 22 tracts could fetch tens of millions of dollars.