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Saturday, June 02, 2007

BP and Gazprom bosses meet

31 May 2007 - Upstream OnLine - The heads of UK supermajor BP and Russia's gas export monopoly Gazprom met in Moscow today, a day before Russian officials meet to decide the fate of the Kovykta gas field in Siberia. Gazprom said in a statement that BP chief executive Tony Hayward had held talks with Gazprom's Alexei Miller, but gave little information other than to say they discussed working together in the European, US and Russian energy markets. BP will find out tomorrow whether Russia's oilfield licensing agency Rosnedra will strip the licence from Kovykta, a huge gas field close to China, which is operated by a subsidiary of its Russian joint venture TNK-BP. "I would say the chances of the Kovykta licence being withdrawn are 96 percent. I can't see how BP's visit can stop this from happening," Oleg Mitvol, deputy head of Russia's environmental agency, which led the investigation, told Reuters. Russia's licensing commission is due to meet around midday today. Russian officials have accused TNK-BP of breaching the Kovykta licence by underproducing at the field, although TNK-BP says it would produce far more if Gazprom had allowed it to build an export pipeline to China. The two companies are in talks about jointly developing Kovykta, although Gazprom has resolutely said it has no interest in the field and will not need it to supply China until 2015. Analysts told Reuters Gazprom is trying to drive a hard bargain to gain control of Kovykta's reserves of about 2 trillion cubic metres of gas, enough to supply the entire world for almost a year. Gazprom has rapidly expanded its control over Russian and Central Asian gas reserves over the last year, and Kovykta is one of the biggest fields outside its control.

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