MOSCOW (AP) – A subsidiary of BP PLC’s joint venture likely will lose its license for a giant natural gas field in Siberia, Russia’s natural resources minister said Friday.
Yuri Trutnev said Rusia Petroleum clearly will not meet a government demand to increase production at the Kovykta field by the end of May, the RIA Novosti, ITAR-Tass and Interfax news agencies reported.
Rusia Petroleum is a subsidiary of BP’s joint venture, TNK-BP. BP has said there is insufficient local appetite for natural gas.
Prosecutors and environmental agencies have said TNK-BP risks having its license revoked for underproduction at the Kovykta field.
Trutnev said if the company is stripped of the license, Kovykta will be put to auction – and foreign companies would not be allowed to bid, according to RIA Novosti.
“It would be auctioned as a strategic asset, and foreign capital won’t be allowed to take part,” he said.
The Russian state gas monopoly OAO Gazprom is widely expected to take a controlling stake in Kovykta, and has long been in talks with BP over the field.
TNK-BP has not been given permission from Gazprom to export gas from Kovykta. Analysts expect that to happen only after Gazprom gains control of the field since Gazprom is the only company in Russia legally allowed to export gas.
The growing pressure on BP was in step with President Vladimir Putin’s unwritten policy of keeping big, strategic energy reserves under state control.
Intense regulatory pressure on Royal Dutch Shell PLC’s Sakhalin-2 project earlier led to the company to sell a controlling stake to Gazprom.
