TNK-BP may boost investment 40% next year
OAO TNK-BP Holding may raise capital expenditure to as much as $3.4 billion next year, CEO Robert Dudley said at a news conference in Moscow yesterday. 80% of that amount will be spent on production and the rest on refining and marketing, he said. BP Plc, Royal Dutch Shell Plc and Exxon Mobil Corp. have been criticized by the Russian government amid calls for greater local control of energy projects. Natural Resources Minister Yuri Trutnev said TNK-BP is the worst violator of licenses with too few wells drilled and operating, Interfax reported. That came after prosecutors warned TNK-BP could lose its permit to the $18 billion Kovykta gas field in Siberia. „I do not think the license will be lost,” Dudley said. „We will find a comprise solution to the development of Kovykta. We are confident there's a solid future for TNK-BP. The company will more than survive, it will thrive.” TNK-BP expects to meet with Trutnev within a month to discuss the company's projects, including the Kovykta field in Irkutsk, Siberia, Dudley said.
The ministry sent TNK-BP a „warning letter” requesting information on the company's elimination of environmental problems and its compliance with a requirement to provide 9 billion cubic meters of natural gas a year to domestic consumers, Dudley said. The letter didn't set specific actions for the company to take or timelines, he said. TNK-BP estimates the local market can use no more than 2.5 billion cubic meters of gas a year and applied to revise its license requirements to reflect that, Dudley said. The company is waiting for a resolution, he said. The ministry will conduct a review of the project and decide next year whether to demand reparation, revoke the license or otherwise punish the company, Trutnev said last month. Kovykta „is important to the country and we've done a lot of work and we're really very good at this as a company,” Dudley said. „I don't think very much has changed except for some headlines.” TNK-BP and state-controlled gas company OAO Gazprom are in talks about the latter joining the project. Dudley said he couldn't comment on the talks as the status changes depending „on the day of the week.” The company's continued investment in long-term projects such as Kovykta and the increase in spending also shows the commitment of the Russian owners, Dudley said, rejecting reports they may sell their half. OAO Gazprom Neft and OAO Rosneft have expressed interest in the stake if it's offered. A shareholder agreement under which neither side can sell expires at the end of 2007, Dudley said. The company's plan to pay interim dividends this year does not indicate shareholders' plan to sell out, he said. BP shares fell 2.4% to 568.5 pence in London. (Bloomberg)
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