RusEnergy

15 May 2007 - Upstream OnLine - BP's Russian venture, TNK-BP, is still at risk of losing its licence to operate the huge Kovykta gas field despite winning the right to a court hearing, Russia's Natural Resources Minister Yuri Trutnev said today. The company gained a reprieve against the threatened withdrawal of its licence for the East Siberian field by persuading a court in the Irkutsk region to clarify its licence obligations at a hearing set for 23 May. Asked whether he still expected the licence to be withdrawn, minister Yuri Trutnev said "I think so, yes. They are not fulfilling their licence agreement. "Irkutsk arbitration court is not the highest court. The final decision will be taken by (Russian environmental agency) Rosprirodnadzor (RPN)," Trutnev told Reuters. "I am sure the final decision will be fair." RPN is a body within Trutnev's ministry and has been at the forefront of campaigns against several foreign companies. Its activities have often been interpreted as an attempt to put pressure on companies to sell up to Russian state-controlled enterprises. Trutnev wants to withdraw the Kovykta licence on the grounds that production at the field is far below the amount stipulated in its licence terms. But the company said Gazprom has refused to let it export the field's gas to China, forcing it to supply the far smaller local market instead. State officials have said the company is making poor excuses for failing to meet licensing terms. But their criticism of the company has widely been seen as the stirrings of a Kremlin attempt to take over the project. Gazprom and TNK-BP have been in talks over Kovykta for years and TNK-BP has said it would be prepared to see Gazprom take control of the project. The Irkutsk regional administration, which has a minority stake, agrees. "We would be very glad if Gazprom entered the project," Sergei Voronov, deputy head of the regional administration, told Reuters on the sidelines of a conference in Moscow. "The most important thing for us is that the dispute over Kovykta is resolved at last," he said, referring to the dispute between TNK-BP and RPN. "The situation is ridiculous right now. We're sitting on gas and we can't use it." Gazprom has said Kovykta's gas won't be needed for exports until 2015. But Voronov said it would be required before then. "I have absolutely no doubt that Kovykta's potential will be in demand both for exports and domestic use," he said. "All we can do now is wait for the central government's decision because the regional authorities have no influence in federal government decisions." The Kovykta licence is held by Rusia Petroleum, 62.9%-owned by TNK-BP. The regional government has 10.8% and Russian investment player Interros has 25.8%.