Company news in June 2004 | |||
Irkutsk Regional Administration Having No Claims against RUSIA Petroleum as to Compliance with the Kovykta License
The Irkutsk Regional Administration has no claims against RUSIA Petroleum OJSC as to its compliance with the license agreement for the Kovykta gas and condensate field development, said Ms. Larissa Zabrodskaya, Deputy Head of the Regional Administration. In her words, according to the license agreement, Kovykta gas extraction is to start in 2006. "This year will serve as the main landmark in compliance with the agreement," Ms. Zabrodskaya noted. She also informed that governmental authorities have not yet established the field''s annual output level. In her words, this was noted in the certificate of RUSIA Petroleum''s documentary audit by the Russian Accounts Chamber (AC), held in March 2004. In addition, Ms. Zabrodskaya said, the Accounts Chamber emphasized the need for the Government to make a decision as to establishment of a commission for drafting of the mineral use conditions and drawing up a draft product-sharing agreement together with RUSIA Petroleum or a group of legal entities, in coordination with RUSIA Petroleum. Ms. Zabrodskaya noted that RUSIA Petroleum, which is also indicated in the certificate, had performed a geological survey of the Kovykta field and approved of gas reserves, ensuring the reserve increment by 480% on the 1991 approved level. On June 15, Russian Natural Resources Minister Yury Trutnev said that "there was a problem with non-compliance with the license agreement for the Kovykta field development. I can say precisely that there should be no unused fields. In principle, licenses not being used should be revoked." "But this case is not as simple as that. This is a major project, and we should get to the bottom of the problem. I think it will take 2-3 months," he said. According to a source of Interfax at the ministry, it cannot be ruled out that the possibility of the Kovykta license revocation may be studied by a working team in charge of addressing issues of early mineral use right termination at the next meeting. The principal breach of the Kovykta field development is non-compliance with the period for putting the field on-stream, the ministry noted. Mr. Victor Vekselberg, TNK-BP''s Managing Director, Production and Technologies, and Chairman of RUSIA Petroleum Board of Directors, declared earlier that, based on audit results of the Russian Natural Resources Ministry Commission and the Account Chamber, there were no major claims against RUSIA Petroleum. "There are some questions concerning the license issue 10 years ago," Mr. Vekselberg said. "But let''s clearly delineate claims against a mineral user and its compliance with license obligations from claims against the license issue process, given the amendments in the mineral use law during the last ten years. To settle the matter, the appropriate steps will be required on the part of the Natural Resources Ministry and regional natural resources commissions," Mr. Vekselberg said. The Kovykta gas and condensate field is situated in the Irkutsk Region, 450 km to the north-east off Irkutsk. The field''s natural gas reserves are estimated at 1.9 trillion cubic meters. Compliance with the license agreement for the Kovykta gas and condensate field development will be addressed during the next meeting of the working team in charge of addressing issues of early mineral use right termination at the Russian Natural Resources Ministry (RNRM). The license for the field development is held by RUSIA Petroleum, major shareholders of which are TNK-BP (62.42%), Interros (25.82%), the Irkutsk Region State Property Committee (11.24%). According to draft feasibility study, the 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, deliveries to the regional market are to reach 2 billion cubic meters and in 2009 are expected to be brought to 2.2 billion cubic meters. In addition, the plan is to supply gas from Kovykta to the Chinese and South Korean markets.
Source: INTERFAX