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Daily Telegraph: BP’s Russian gas licence ‘to be revoked’

Oleg Mitvol

(Oleg Mitvol: no guarantee)

By Russell Hotten
Last Updated: 1:22am BST 25/05/2007

BP’s role in a huge Russian gas field may come to an end as early as next week, a top Moscow official has warned.

Russia’s environmental agency has stepped up pressure on the UK energy group’s joint venture, TNK-BP, saying that its licence to operate at the Kovykta gas field may by revoked by June 1.
TNK-BP’s subsidiary working the field, Rusia Petroleum, has gone to the courts to clarify the terms of its Kovytka licence, a process that could take several weeks. But yesterday, Oleg Mitvol, deputy head of environmental watchdog Rosprirodnadzor, said “the likelihood” of TNK-BP’s licence being revoked was “100pc”.

The relatively under-developed Kovytka field has the potential to be a massive revenue-earner for BP, but the company’s Russian operation is accused of breaching its licence by not extracting gas fast enough. TNK-BP was expected to produce 9bn cubic metres of gas annually, but Mr Mitvol says only 33.9m came out of the ground last year.

TNK-BP says that the government’s failure to invest in infrastructure means that even if more gas was produced it could not be transported to customers.

The alternative would be to burn off the gas. The company says it cannot produce the required amount because state gas monopoly Gazprom will not allow it to build a planned export pipeline to China.

But Mr Mitvol appears to disagree. “When the company [TNK-BP] signed its licence agreement, it had no guarantee from Gazprom. In the West, in any civilised country, you wouldn’t sign an agreement without a 100pc guarantee.” However, analysts believe the dispute should be seen in the wider context of Moscow’s strategy to claw back energy assets controlled by Western companies.

Last year Gazprom took control of the Sakhalin-2 oil and gas project run by Royal Dutch Shell. This followed months of pressure from Mr Mitvol’s office that Shell had breached its licence.

Meanwhile, TNK-BP has resolved a dispute with energy company Rosneft over who owns an 11.29pc stake in a company operating in the Irkutsk region.

The stake, initially owned by the East Siberian Gas Company, was sold to TNK-BP, but the sale was thrown into confusion when Rosneft submitted a late higher offer. Rosneft and TNK-BP have now agreed to split the stake. and its also non-profit sister websites,,,,, and are all owned by John Donovan. There is also a Wikipedia article.

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