BP sells Siberian gas stake to Gazprom

Source: Energy Digital

Date :22/06/2007 14:45:03

BP and its Russian joint venture TNK-BP today announced they will create a strategic alliance with the Russian gas giant, Gazprom, to invest jointly in major energy projects around the world

Under the terms of the agreement signed by all parties, TNK-BP agreed to sell Gazprom its 62.89 percent stake in Rusia Petroleum, the company which holds the licence 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 the regional gasification project. The total price paid by Gazprom will be between $700 and $900 million

In a move designed to extend Gazprom's access to international markets and deepen BP and TNK-BP involvement in Russian oil and gas, the companies will establish a joint team to identify strategic opportunities for investment both overseas and inside Russia.

"We will initially be looking for projects of at least $3 billion, but the potential for further growth could be very significant," said BP chief executive Tony Hayward (pictured). "This historic agreement lays the ground for powerful co-operation between BP, TNK-BP and Gazprom."

Dr Hayward said the companies would immediately set up a joint steering group to look for suitable investment options "across all geographies."

"Our firm aim is to establish a venture that is strategic and long term, with mutual benefits for the companies, both inside and outside Russia."