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Saturday, June 02, 2007

Russian regulator puts off TNK-BP gas license decision

MOSCOW, June 1 (RIA Novosti) - Russia's license watchdog said Thursday it had postponed for two weeks a decision on revoking a license of the Russian-British joint venture TNK-BP [RTS: TNBP] over underproduction at an Eastern Siberian gas field. The natural resources minister, Yury Trutnev, said last week his ministry had started a repeat check into the Kovykta field after Rusia Petroleum, a subsidiary of TNK-BP, failed to correct previous violations. He said the license might be put up for auction or competitive bidding at the government's discretion. Industry analysts said the fate of the license hinged on negotiations between TNK-BP and state-run energy giant Gazprom [RTS: GAZP], ongoing since last year. "Should Gazprom become a Rusia Petroleum shareholder, the licensing problem will be fixed," MDM Bank analyst Nadezhda Kazakova said. The status of negotiations between TNK-BP and Gazprom is unknown. The Federal Agency for Subsoil Use said in early February that Rusia Petroleum could be stripped of its license for failing to meet production targets at Kovykta, which holds proven reserves of two trillion cubic meters of natural gas, and set a deadline of May 23 for the company to rectify the situation. Rusia Petroleum challenged the regulator's decision at the arbitration tribunal in Irkutsk in Eastern Siberia, which ruled to suspend the regulator's measures against the project operator pending a court hearing. Rusia Petroleum is owned by TNK-BP (64.4%), the holding company for nickel giant Norilsk Nickel, Interros (25.82%), and the Irkutsk regional administration (11.24%).

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