UK oil major BP Plc agreed to sell its interest in the Siberian Kovykta gas field to state-controlled Gazprom at a knock-down price on Friday, as the Kremlin continues to tighten its grip over Russia's oil and gas industry.
The sale is the culmination of years of pressure on BP's Russian joint venture TNK-BP, which wanted to develop the huge field to supply lucrative export markets in Asia.
Gas export monopoly Gazprom has consistently blocked these plans, while regulators accused the Kovykta operating company, Rusia Petroleum, of breaching its licence terms. BP said Gazprom will pay $700 million-$900 million for TNK-BP's 62.7 percent stake in Rusia Petroleum, and a 50 percent stake in a smaller company which is constructing a regional gasification project.
This is a fraction of the value analysts had put on the stake in Kovykta. TNK-BP has already invested $450 million in the field - one of the largest in the world. TNK-BP will also receive an option to buy a 25 percent plus one share stake in Kovykta at an "independently verified market price" at a later date, providing certain conditions are met.
BP added that it had signed a memorandum of understanding with TNK-BP and Gazprom to create a strategic alliance to invest in "major long-term energy projects or swap assets around the world".
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