Agreement on structure of TNK-BP holding signed in London

British Petroleum and the Russian Alfa Group (Access-Renova) signed an agreement in London on Thursday, determining the structure of a deal on establishing a TNK-BP joint venture. Under the agreement, all commercial and financial obligations of the sides are formalised, which opens a way for the final creation of a holding. "The history of the TNK-BP Company starts from this moment," said chairman of the board of directors of the Alfa Group Mikhail Fridman. "I'm sure that this new unique entity will play a leading role in the Russian and later in the world oil industry." "We hope that merging trends in the Russian and world fuel and energy complex will not be limited to this deal," said in turn, TNK board chairman Viktor Vekselberg. "This deal is an international recognition of rising political stability in Russia and its progress in the economic development," he noted. Holding president Robert Dudley admitted in an interview with Tass that "it was not an easy thing" to take a decision on expanding BP business in Russia. The company carried out a painstaking assessment of assets over the past nine months and spent enough time on making feasibility estimates. BP participated in a number of major deals over the past five years, and not a single one was concluded with greater carefulness than the present one: this is true both of assets and obligations as well as legal formalities, the president said. TNK-BP will have substantial assets in the most important oil-bearing areas of Russia: production will total 800,000 barrels a day in Western Siberia and 370,000 barrels a day in the Volga-Ural area. Besides, Dudley continued, the company will continue the development of deposits, which was already conducted. There are now 8,000 mothballed wells, he went on to say, and the company mulls over a possibility of resuming their operation gradually. It will be necessary to re-start several thousands of wells annually, the president stated. British Petroleum intends to use skilled Russian personnel and to bring machinery and methods from other areas of the world to organise production so as to optimise deposits, wells and land infrastructure to boost efficiency of recovery, Dudley emphasised.