22nd Jun 2007 13:19
BP PLC22 June 2007 June 22, 2007 BP AND TNK-BP PLAN STRATEGIC ALLIANCE WITH GAZPROM AS TNK-BP SELLS ITS STAKE IN KOVYKTA GAS FIELD BP and TNK-BP today announced that they have signed a memorandum ofunderstanding to create a strategic alliance with the Russian gas giant,Gazprom, to invest jointly in major long-term energy projects or swap assetsaround the world. In a move designed to extend Gazprom's access to international markets anddeepen BP and TNK-BP involvement in Russian oil and gas, the companies willestablish a joint team to identify strategic opportunities for investment bothoverseas and inside Russia. "We will initially be looking for projects of at least $3 billion, but thepotential for further growth could be very significant," said BP chief executiveTony Hayward. "This historic agreement lays the ground for powerful co-operationbetween BP, TNK-BP and Gazprom." Dr Hayward said the companies would immediately set up a joint steering group tolook for suitable investment options "across all geographies." "Our firm aim is to establish a venture that is strategic and long term, withmutual benefits for the companies, both inside and outside Russia." Under the terms of the agreement signed by all parties, TNK-BP agreed to sellGazprom its 62.89 per cent stake in Rusia Petroleum, the company which holds thelicence for the Kovykta gas field in East Siberia. It will also sell its 50 percent interest in East Siberian Gas Company (ESGCo), the company constructing theregional gasification project. Gazprom will pay between $700-$900 million, subject to adjustments, for TNK-BP'sinterests in Rusia and ESGCo. TNK-BP said a longer-term 'call' option for TNK-BP to buy a 25 per cent plus oneshare stake in Kovykta at an independently verified market price, had also beenagreed with Gazprom. This option could be exercised once a significant jointinvestment or asset swap has been agreed under the terms of today's memorandumof understanding. President and CEO of TNK-BP, Bob Dudley noted: "This is an important developmentin the future growth of TNK-BP. We look forward to broadening our workingrelationships with Gazprom and BP and to further developing our Russian assetbase as well as securing access to material additional opportunities forTNK-BP." Notes to editors: • BP is one of the world's largest energy companies. It operates across six continents and employs around 97,000 people worldwide. Its products and services are available in more than 100 countries and it explores for and produces oil and gas in 26 countries. BP has made Russia a key element of its long-term growth strategy and has conducted business there for more than 15 years. • Gazprom is Russia's largest company and the world's largest producer of natural gas. It holds about one quarter of total world gas reserves. Gazprom exports gas to 32 countries within and beyond the FSU. In 2005 the company sold 156.1 billion cubic metres of gas to European countries and with 76.6 billion cubic metres to the CIS and Baltic states. • TNK-BP is the third largest oil company in Russia. In 2006 it produced 1.9 million barrels of oil equivalent a day. It is owned and managed jointly by BP and Alfa Access Renova group. • The Kovykta gas field is located some 450 kilometres from the city of Irkutsk in the north of the Irkutsk region of Eastern Siberia. It has estimated resources of approximately 2 trillion cubic metres of gas in place. For further information contact: BP Press Office: +44 (20) 7496 4076 TNK-BP Press Group: Marina Dracheva: + 7495 363 6580Alexander Shadrin: + 7495 745 7846Vladimir Bobylev: + 7495 745 7846 - ENDS - This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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