In pictures: the clean-up operation
The political storm engulfing BP intensified yesterday as the group came under renewed pressure on its Russian front.
Gazprom, the Kremlin-controlled gas monopoly, has raised new questions over the future of a giant gasfield in Siberia controlled by the British group’s Russian joint venture TNK-BP.
As at least two international brokerages cut their recommendations on BP to “neutral”, citing spiralling costs from the Gulf of Mexico oil spill and a potential cut to the dividend, Gazprom piled on the pressure by ending hopes that it might buy Kovytka from TNK-BP for up to $1 billion.
Speaking in Moscow, Viktor Timoshilov, the Gazprom executive responsible for Siberian developments, claimed that Russia’s gas export monopoly had no need for access to Kovytka’s resources because it had ample supplies elsewhere.
Last week, TNK-BP said that Rusia Petroleum, its unit that controls Kovytka, had filed for bankruptcy after a lengthy battle with the Russian State over the development.
The news is another body blow to BP, which yesterday announced some modest success in its efforts to contain the Gulf spill by fitting a cap on the leaking seabed riser pipe. The company said that it had siphoned off 11,100 barrels of oil on Sunday, a slight improvement on the previous 24 hours.
Discovered in 1987, the Kovytka field in Irkutsk contains an estimated two trillion cubic metres of gas and has been earmarked as a key source of energy supplies for China. Since the mid-1990s it has been majority-owned by TNK-BP, which started limited development of the field in 2001.
However, in the interim Moscow identified Kovytka as a strategic field that could be developed only by a company with majority Russian ownership. As the Kremlin has increasingly flexed its muscles over the country’s resources, state officials have repeatedly threatened to strip TNK-BP of its licence to develop Kovytka.
In 2007, TNK-BP struck a deal to sell the field to Gazprom for nearly $1 billion. But the talks subsequently ground to a halt.
Decreased demand amid the global economic downturn plus a glut of gas supplies have undermined the rationale for developing new gas projects.
Yesterday, a spokesman for BP in Moscow said that the future of the Kovytka field would be decided by a bankruptcy court in Irkutsk. He said: “It looks like the assets will be sold. It is hard to say when but I don’t expect it to be a very quick procedure.”
The remarks yesterday from Gazprom came a few days after President Medvedev questioned the future of BP. He said: “There is even an uncertainty as to what will happen to the firm. The nature of environmental responsibility is such that it can destroy anyone.”
Rusia Petroleum is 63 per cent-owned by TNK-BP, with the rest owned by other groups including the regional government of Irkutsk.
Separately, it has emerged that BP’s under-fire chairman Carl-Henric Svanberg is nursing a £1.4 million loss on shares he bought in the oil giant earlier this year.
The Swede, who joined BP on January 1, less than four months before the explosion on the Deepwater Horizon rig, paid £5.4 million for 925,000 shares in the company in two separate transactions in February and April. The average price Mr Svanberg paid was 584p a share. Yesterday the price had slumped to 432p each, making the shares worth just under £4 million.
Mr Svanberg, the former chief executive of Ericsson who has been heavily criticised for his low profile during the crisis, continued to buy shares in BP after the accident on the Deepwater Horizon.
He paid just under £1.1 million for 175,000 shares on April 28 — eight days after the deadly accident in the Gulf of Mexico. He had earlier paid £4.3 million for 750,000 shares at 575p each via his investment vehicle Chas Aludden — his first purchase of BP shares.
• The Government will set out plans today to strengthen its safety regime in the North Sea oil industry, doubling annual rig inspections and creating a new taskforce to examine the country’s ability to prevent and respond to oil spills (Robin Pagnamenta writes).
In the first official British response to the Deepwater Horizon spill, Chris Huhne, the new Energy Secretary, said that the events in the Gulf of Mexico were devastating and would have many long-term effects for the industry.
Mr Huhne said: “What we are seeing will transform the regulation of deep water drilling worldwide.”
He added that Britain’s safety and environmental regime was “fit for purpose”.
However, he continued: “But the Deepwater Horizon gives us pause for thought and, given the beginning of exploration in deeper waters West of Shetland, there is every reason to increase our vigilance.”
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