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The Scotsman: TNK-BP to appeal court ruling on gas field

LONDON (Reuters) – BP said on Tuesday its Russian joint venture TNK-BP will appeal against a decision by a Russian court in a bid to keep the licence for the giant Kovykta gas field.

A judge in a court in Irkutsk, the region in East Siberia where the field is located, said on Monday he had decided to throw out an appeal by TNK-BP , which was seeking to stop the authorities taking away the licence.

“What TNK-BP is saying is we regret the court’s negative decision and the current pressure to withdraw the licence,” said Sheila Williams, a BP spokeswoman.

“We are confident of the legal merits of the case and intend to appeal and contest this court’s decision.”

The battle for the $20 billion (10 billion pound) field follows state pressure on Royal Dutch Shell’s Sakhalin-2 project last year and some analysts see it as part of a Kremlin move to consolidate major energy resources under state control.

Monday’s court ruling opened the way for Rosnedra, Russia’s licences regulator, to meet on Friday to discuss the early withdrawal of the field’s licence.

The decision came as Russia’s environmental agency, RosPrirodNadzor, finished a final inspection of Kovykta on Monday and reiterated its accusation of underproduction.

Kovykta is one of the largest gas fields in Russia, the world’s top producer. The field holds reserves of around 2 trillion cubic metres of gas and large amounts of gas condensate.

TNK-BP had hoped to use Kovykta for gas exports to China but says it has been forced to underproduce because Russian gas export monopoly Gazprom refuses to let it do so.

The operator of the roughly $20 billion project is Rusia Petroleum, which is around 63 percent owned by TNK-BP. London-based BP owns half of TNK-BP.

(c) Reuters 2007. All rights reserved.

This article: http://business.scotsman.com/latest.cfm?id=836662007

Last updated: 29-May-07 12:55 BST

 

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