Company news in June 2004 | |||
TNK-BP to Begin Gas Production in Kovykta in 2006, According to the License Agreement
The Russo-British TNK-BP intends to start production in the Kovykta gas and condensate field in 2006, according to the license agreement. In response to a request to comment on the Natural Ministry''s claims against the company in connection with violation of the license for the field development, namely, the deadlines for putting Kovykta on-stream, TNK-BP''s President Robert Dudley said in Moscow that "TNK-BP would not be able to start gas production in Kovykta in the absence of a pipeline." A spokesperson of the company explained to the Petroleum Information Agency (ANI) that TNK-BP would start gas production in Kovykta in 2006, as envisaged in the license agreement; however, a Governmental resolution as to export pipeline construction is required to sell gas in the external market. Robert Dudley reminded that TNK-BP and Gazprom OJSC had formed a task group that elaborates the issue of Gazprom''s participation in the Kovykta project. However, in his words, no agreement with Gazprom for its subsidiary, Gazexport, to negotiate with China and South Korea concerning gas supplies from Kovykta has been reached yet. According to TNK-BP''s President, the matter of who will operate Kovykta gas supplies has not been settled and is under discussion. Russian Natural Resources Minister Yury Trutnev stated that TNK-BP did not comply with the license for Kovykta development in particular, the deadlines for putting the field on-stream. It was announced at the most recent meeting of Gazprom President Alexey Miller and Mr. Victor Vekselberg, TNK-BP''s Managing Director, Production and Technologies, that Gazexport would join TNK-BP''s negotiations with China and South Korea concerning gas sales to these nations. TNK-BP is negotiating with Gazprom, the coordinator of the program for development and sales of gas from oil and gas fields in East Siberia and Far East, concerning the conditions of the gas monopolist''s joining the Kovykta project. However, Gazprom expresses certain discontent with the project''s feasibility study and also requires that TNK-BP settle disputable issues pertaining to the license agreement with the Natural Resources Ministry. According to the international feasibility study signed in November 2003 between TNK-BP, Korean Cogas and Chinese CNPC, the plan is for the first gas to be supplied to northeastern China and South Korea in 2008 in the amount of 12 billion and 10 billion cubic meters a year, respectively. Since 2013, China will increase its purchases by 8 billion cubic meters. Just as the case is in Korea, gas supplied to China will mostly be used for utility needs and electricity generation. First gas supplies from the Kovykta field to the Irkutsk Region market may start in 2006 in the amount of 300 million cubic meters. In 2007, the scope of supplies to the regional market will come to 2 billion cubic meters and will reach 2.2 billion cubic meters by 2009. The project payback period is 8-9 years if gas prices stand at $45-50 per 1,000 cubic meters and IRR of 18%-19%. RUSIA Petroleum OJSC is a mineral user of the Kovykta gas and condensate field (proven reserves in the Ñ1+Ñ2 categories come to 2 trillion cubic meters). The major shareholders of RUSIA Petroleum are TNK-BP (approx. 63%), the Irkutsk Regional Administration (10.78%), and Interros Holding (25.82%).
Source: INTERFAX