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MarketWatch: Russian steps up pressure on BP over Kovykta Field

Last Update: 7:46 PM ET Feb 27, 2007

The Russian government has increased pressure on TNK-BP over one of its assets as BP PLC (BP) Chief Executive John Browne arrived in Moscow for talks, the Financial Times reported on its Web site Tuesday.

Russian environmental regulatory official Oleg Mitvol said the Natural Resources Ministry wouldn’t back off from threats to revoke the license of TNK-BP, BP’s Russian venture, to develop its Kovykta gas field in eastern Siberia in three months, FT reported.

“The conditions can be changed only one way,” Mitvol said, according to FT, regarding TNK-BP’s calls to ease license terms that it says can’t be met. “You tear up the license agreement and the state sells it off at an auction anew.”

The ministry says TNK-BP is in violation of development of the field. It gave the group three months to start producing 9 billion cubic meters of gas, as called for by the license, or have it revoked, according to the FT.

TNK-BP declined to comment on Mitvol’s remarks, the FT reported.

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