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The Moscow Times: Mitvol Lays the Groundwork for Kovykta Gas Field Probe

Friday, January 19, 2007. Issue 3578. Page 5.
The Associated Press

The Natural Resources Ministry’s environmental agency is preparing to probe the giant Kovykta natural gas field owned by TNK-BP, agency deputy head Oleg Mitvol said Thursday.

Mitvol said his representatives in the area had begun gathering data on the Kovykta field in eastern Siberia, which has gas reserves of over 2 trillion cubic meters.

Analysts have suggested that Kovykta could be the next foreign energy development to be taken over by state-controlled gas monopoly Gazprom.

The documents are due to be submitted by the end of the month, after which a full check would be launched, “possibly in February or March,” Mitvol said.

Last month, Gazprom obtained a majority stake in the giant Sakhalin-2 oil and gas project led by Shell that had been subject to months of regulatory pressure from the Natural Resources Ministry.

In a separate statement, the environmental agency said the first stage of the check would focus on whether the Rusia Petroleum unit of BP’s Russian joint venture had fulfilled its production obligations at the site.

Under the terms of its license, the unit was due to have produced some 9 billion cubic meters of gas last year, but did not do so because it has no framework to export the gas and domestic gas demand in the region amounts to only a few billion cubic meters.

Analysts say TNK-BP will only be able to export gas to lucrative markets in China and South Korea once it agrees to let Gazprom into the project on terms that suit the monopoly. By law, Gazprom is the only company in Russia that can export gas, and it holds de facto veto power over BP’s plans.

The move suggests that Kovykta’s fate could mirror that of Sakhalin-2. After a barrage of environmental probes led by Mitvol, Shell and its Japanese partners agreed in December to sell a controlling stake to Gazprom.

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