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Monday, 06 October, 2008, 13:20 GMT | more prices >>

TNK-BP sees Gazprom deal by end 2008



By Upstream staff 

Russia's Gazprom and UK supermajor BP and its Russian arm TNK-BP will fully agree on the structure of their natural gas venture by the end of 2008, TNK-BP executive Tom Quigley said today.

Gazprom, BP and TNK-BP agreed to set up a global venture earlier this year following Gazprom's acquisition of the giant East Siberian Kovykta field from TNK-BP. Analysts have said TNK-BP had been forced to sell the field under government pressure.

Gazprom and TNK-BP have said they would finalise the Kovykta purchase by the end of this year, while the timetable for the creation of the joint venture had remained unclear.

Gazprom's contribution in the venture would be represented by Kovykta, TNK-BP would bring other Russian assets, while BP's contribution has yet to be defined.

The joint venture will be split 50-50 between Gazprom on one side and TNK-BP and BP on the other.

"The (Kovykta) sale is the first component and we're on track for that. We then hope to buy back 25 percent of Kovykta in the first quarter of 2008...," Quigley, TNK-BP's vice president of West Siberia Gas Development, told Reuters.

"And then we can move to the third stage, which is the establishment of the 50-50 joint venture, which we are looking into and we hope to have done by the end of 2008," he added.

TNK-BP has said it would bring its Rospan fields in West Siberia, which have reserves of 300 billion cubic metres of natural gas, into the venture.

"We hope to extract the plateau level of 15 Bcm a year from Rospan and will sell domestically which, thanks to price liberalisation plans, has encouraged us to invest in gas," Quigley said.

Russia has capped annual gas price rises at no more than 15-18% in recent years to keep inflation under control.

The government plans to fully liberalise prices by 2011, when the price of gas will more than double to $110 per 1000 cubic metres.


Tuesday, 30 October, 2007, 21:29 GMT  | last updated: Tuesday, 30 October, 2007, 21:29 GMT

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