Kremlin Targets BP

BP is coming under fresh pressure to relinquish control of one of its most valuable assets in Russia after Kremlin officials confirmed they would conduct an aggressive audit of its giant Kovykta natural gas field, run by TNK-BP.

Inspectors allege that the field is under-exploited and that TNK-BP will fail to raise production to an agreed 9 billion cubic meters of gas this year.

This is not the first time TNK-BP’s ownership of the asset has come under pressure; last September the Kremlin raised the possibility that it might revoke TNK-BP’s licence due to alleged environmental violations.

The allegations are seen by many analysts as part of an aggressive campaign to wrest control of Kovykta from TNK-BP on behalf of the state-controlled energy giant Gazpromm that has long coveted a stake in the project

The Anglo-Russian firm will be reluctant to dilute its 62.4 per cent stake in Kovykta; the field is one of the jewels in BP’s Russian crown and holds enough gas reserves to meet the world’s needs for about eight months. However, TNK-BP has been unable to tap its potential as it does not have the right to export the gas beyond Russia’s borders; only Gazprom has that right.

So BP’s troubles continue…