Company news in 2007

Tyumen State Oil and Gas University, JSC TNK-Management, and Royal Holloway and Bedford New College at University of London signed an agreement of cooperation aimed at establishment of an advanced training center for specialists in the field of geology and geophysics.

The size of corporate pensions for employees of TNK-BP may significantly grow. A unique new pension program will be launched on January 1, 2008 at the township-forming enterprise of TNK-BP. The company will participate on parity basis with every employee in accumulation of future pensions.

The Board of Directors of the OGK-1 approved the decision to establish its 100% subsidiary – a closed joint-stock company “Nizhnevartovskaya GRES” (Nizhnevartovsk Power Plant), says the press release of the company. OGK-1 will be the sole owner of the Nizhnevartovsk Power Plant. The authorized capital of the power plant will be 5,806,456,876 rubles in shares of 1 ruble each. OGK-1 will pay the authorized capital using the property of the power plant.

TNK-BP is going to increase its gas production in 2008 by 14% compared to 2007 up to 16 billion cubic meters, said Alexander Berezikov, Vice President BP for Marketing, Supply, Trading and Transport of Gas and Condensate, TNK-BP Management, on the sidelines of the Fifth International Forum “Russia Gas–2007.”

TNK-BP started signing long-term (three-year) contracts for supply of gas to customers, said Alexander Berezikov, Vice President BP for Marketing, Supply, Trading and Transport of Gas and Condensate, TNK-BP Management, at the forum “Russian Gas” organized by the Russian Gas Society.

TNK-BP has won two major awards at the European Supply Chain Excellence Awards 2007, which recognise organizations that have achieved the highest standards in supply chain management throughout Europe.

TNK-BP has been named “Company of the Year – 2007” as part of the annual competition organized by the business weekly Kompaniya. TNK-BP received the top award in the category “Fuel and Energy Complex” for the successful implementation of its large-scale associated gas program.

JSC “Vercknechonskneftegas” (VCNG) plans to invest 13 billion rubles (US $521 million) in development of the Verkhnechonskoe oil and gas condensate field in 2008, which is 62.5% greater than the expected investment volume this year, stated the company’s General Director Mugammir Galiullin at a press conference on Tuesday.  He noted that the company will direct $122 million toward drilling work next year, while it is planned to spend $78 million on drilling in 2007.  Vercknechonskneftegas will invest almost all the remaining money in creation of infrastructure (including construction of an oil pipeline).

TNK-BP is planning 1—2% growth in oil production next year by means of new major projects, stated the company’s president Robert Dudley the other day. One of those projects is development of the Uvat group of fields in the south of Tyumen oblast, where a new oil and gas province is being created by TNK-BP.

TNK-BP is planning to sell an additional 25 billion cubic meters of dry lean gas obtained from casinghead gas in 2012—2020, declared TNK-BP Deputy Executive Director, Gas Business Development, Alastair Ferguson at the international conference “Utilization of Casinghead Gas in Russia” held on October 9 in Moscow.

TNK-BP is planning to increase its oil production beginning from 2008 owing to development of new fields, said Robert Dudley, President of TNK-BP, in an interview to the Petroleum Information Agency (ANI) and the Russian TV information channel Vesti.

A regional department of health, industrial safety, and environmental protection has been established in TNK-BP West Siberia. 20 unbiased specialists will closely control all enterprises and contractors of the company.

TNK-BP is interested to take part in new projects of oil production in Asia, said Robert Dudley, President of TNK-BP, in an interview to the Petroleum Information Agency (ANI) and the Russian TV information channel Vesti.

TNK-BP would like to return to development of the Kovykta gas condensate field and establish a multifunctional joint venture with Gazprom for development of this field, said Robert Dudley, President of TNK-BP, in an interview to the Petroleum Information Agency (ANI) and the Russian TV information channel Vesti.

TNK-BP currently carries no negotiations for buying or selling assets, said Robert Dudley, President of TNK-BP, in an interview to the Petroleum Information Agency (ANI) and the Russian TV information channel Vesti.

TNK-BP will invest approximately $500 million into modernization of its refineries by 2009, said Robert Dudley, President of TNK-BP, in an interview to the Petroleum Information Agency (ANI) and the TV channel Vesti 24.

“The value of any company is determined by the market. I think the shares of TNK-BP Holding traded on the market reflect, to a certain extent, the value of the entire company. We have estimates of experts, which agree that the fair value of the company is between $33 million and $40 million. The price of TNK-BP Holding shares is one of the company value indicators,” said Mr. Dudley in an interview to the Petroleum Information Agency (ANI) and the Russian TV information channel Vesti.

Utilization of associated gas is becoming a high-priority task in the fuel and energy complex of Russia.  For example, TNK-BP is successfully implementing a program for utilization of associated petroleum gas and minimization of its burning.

The ceremony of opening a monument to the legendary Russian cruiser Varyag in Scotland last weekend was an important event in the Russian-British relations of recent years. This first monument to the Russian military honor was erected in Great Britain with the support of TNK-BP.

The international ratings agency Standard & Poor’s has confirmed the long-term rating of TNK-BP International Ltd. (TNK-BP) at the “BB+” level and its short-term rating at the “B” level.  The rating projection is “stable.”

TNK-BP is getting rid of one of its oldest oil-producing assets in the Orenburg Region – Buguruslanneft. The company is going to invest the money gained through this transaction into buying licenses for development of new fields in this region. So far the company sold only its service enterprises in the Orenburg Region.

TNK-BP will maintain the current level of production until 2009, said Robert Dudley, President of TNK-BP, to the press.

The Russian-British oil company TNK-BP is planning to increase its investment in utilization of associated gas in order to avoid sanctions by the Kremlin. Russian Minister of Natural Resources Yuri Trutnev warned oil producers that the average level of associated gas utilization in the country must be at least 95 percent by 2011. Otherwise, violators may be subject to fines.

Orenburg region is one of the oldest oil-producing regions in Russia. Industrial oil production began here in 1937, and reached its peak volumes in the 1970s, when 13.1 million tons were produced per year.

According to expert opinion, there is only one case of a positive composite solution to problems associated with the processing of associated gas in Russia.  It is Yugragazpererabotka, a joint venture created late last year by TNK-BP and SIBUR Holding.

The large-scale project of the oil company TNK-BP and the Administration of the Tyumen Region for development of a group of fields in the southern part of the region is an excellent example of successful and mutually beneficial partnership of private business and the state. Recently, managers of the company and local authorities inspected the works for project implementation.

Vladimir Yakushev, governor of the Tyumen Region, is pleased with the way the Russian-British company TNK-BP is developing fields in the south of the Tyumen Region in the framework of the Uvat project. He expressed his satisfaction to Tyumen pressmen after visiting the fields of the Uvat project together with German Khan, Executive Vice President of TNK-BP.

TNK-BP has commissioned the BKhO-2 activated sludge treatment complex at the Lysychansk Oil Refinery. The cost of building the complex was $10 million, and it took one and a half years to complete.

TNK-BP is planning to allocate 90 million rubles for the complete removal of all oil sludge on the territory of Orenburg Oblast in 2007. According to the press service, it is planned to remove 86,500 cubic of oil sludge that has accumulated on the oblast territory over seventy years of oil field operation.

A presentation and discussion of the results of an independent study aimed at consideration and analysis of different versions of gas transportation from the Kovykta field, including the versions proposed by TNK-BP and alternative versions, in terms of social and economic risks and efficiency of investment projects was held in Moscow on June 4.

The problem of associated gas utilization in the fields of the Uvat Group is practically solved, said Viktor Blagoveschensky, Vice President of TNK-BP and Head of the Tyumen Business Unit.

On June 4, 2007 TNK-BP held its first Global Investor conference call hosted by the сompany’s top management. The presentation prepared for the call and TNK-BP International’s US GAAP financials for full year 2006 are available for downloading at the following link: www.tnk-bp.com/investors/financial/.

TNK-BP will host its First Global Investor conference call to discuss financial results for the year 2006 and update on recent developments. The call is scheduled for Monday, June 4, 2007, at 6:00 PM Moscow / 3:00 PM London / 10:00 AM NYC time.

The conference call will be hosted by:

• Robert Dudley, President and CEO
• Jim Owen, CFO
• Murray Easton, VP Financial Controller
• Steve Ridlington, VP Finance and Treasury

TNK-BP is to launch a Master’s program in Tyumen in the field of oil geosciences. The program will established at the Tyumen State Oil and Gas University, it was announced by TNK-BP Chief Operating Officer Tim Summers during a lecture to teachers and students at the university.

Verkhnechonskneftegaz, which is developing the Verkhnechonskoe oil and gas condensate field in Irkutsk Oblast, is planning to supply oil to the VSTO (Eastern Siberian – Pacific Ocean) pipeline on completion of the first stage of construction.

TNK-BP is going to implement a number of associated gas processing projects in Yugra. Experts assure that implementation of even one investment plan related to associated petroleum gas processing will have favorable effect on the environmental situation of the entire region. In an interview with Novosti Yugra, Mikhail Gordin, Director of the Associated Gas Projects Department, TNK-BP, speaks about the plans and measures of the Russian-British company for putting out all flares in Yugra.