BP 'could lose Russia rights'

A RUSSIAN minister today claimed BP may be forced to give up one of the most lucrative production licences held by its joint venture in the country with TNK.

Resources minister Yury Trutnev said the TNK-BP unit operating the giant Kovytka gas field in Eastern Siberia had failed to build a pipeline network to provide power to the Irkutsk region.

'The resources ministry will review the possibility of withdrawing the Kovytka licence within a month,' Trutnev said.

However, analysts said the threat has almost certainly resulted from sabre-rattling by Russian gas monopoly Gazprom, which is desperate to be involved in the project.

'Gazprom is playing hardball because it can afford to,' said Adam Landes, oil and gas analyst at Renaissance Capital in London.

'I am sure they will fix it. Gazprom is trying to muscle into the full cycle. If I were TNK-BP, I would rather have Gazprom involved in the full chain, producing, shipping and marketing the gas.'