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Calgary Herald: Russian watchdog alleges ‘violations’ at BP gasfield

20 January 2007

Claims raise fear oil firm will lose control of project
AGENCE FRANCE-PRESSE

Russia’s environmental watchdog alleged on Monday violations in the huge Siberian gasfield run by a unit of BP, raising fears that the British oil major could lose control of the project.

“We asked for information on (gasfield) Kovykta. . . . We received this information and they showed that one point of the licence was not adhered to,” Rosprirodnadzor deputy head Oleg Mitvol said.

He said the gasfield, run by a unit of TNK-BP, which in turn is 50 per cent owned by BP and 50 per cent owned by Russia’s Alfa Access Renova, would be inspected in March.

News of the alleged violation, first reported by Russian daily Kommersant on Monday, raised concerns in the media about a repeat of Royal Dutch Shell losing control of its Sakhalin-2 oil and gas project late last year. Shell was forced to sell to Russian gas monopoly Gazprom a controlling stake in Sakhalin-2 after allegations of environmental damage.

The deal was couched in business terms, but politics played a big role, with the Russian state widely accused of using environmental probes as a weapon to force Shell’s hand.

No sooner was Gazprom’s takeover of a majority stake confirmed than worries over the ecological damage — estimated by the state environmental watchdog at anything from $10 billion to $50 billion US — seemed to evaporate, the Russian press reported at the time.

“The scenario with Sakhalin-2 is going to repeat itself with Kovykta: vigorous allegations made by the (Russian) authorities on environmental will disappear once Gazprom has entered into the project,” Kommersant said.

The paper on Monday cited a source as saying that Gazprom wanted to acquire a 74.4 per cent stake in RUSIA Petroleum, which owns the licence on Kovykta.

Currently RUSIA Petroleum is 62.4 per cent owned by TNK-BP, 25.8 per cent owned by the Russian group Interros, and 11.2 per cent by the administration of Irkutsk province, where the field is located, the paper said.

Kommersant said TNK-BP wanted to retain 33 per cent of RUSIA Petroleum. TNK-BP values the field at $2 billion US.

Meanwhile on Monday, another gasfield containing more than 1.2 trillion cubic metres of gas, about 100 kilometres from Kovykta, had been discovered, Interfax cited authorities as saying.

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