Regulator Threatens Giant BP-TNK Field

BP's Russian venture may have to stop pumping oil at its largest Siberian field because the company doesn't have a government-approved plan for the project, Federal Energy Agency head Sergei Oganesyan said.

TNK-BP produces about a fourth of its oil at the Samotlor deposit, one of the largest in the world. The field holds about 3.7 billion barrels of proven recoverable reserves, enough to supply the United Kingdom for almost six years.

Samotlor "is being developed without a technical plan, which is a violation of the law," Oganesyan said in an interview. "The law must work, and if a company violates a development plan, their license must be withdrawn."

Authorities have begun a series of probes into drilling rights across the industry to determine whether producers are meeting the terms of their oil field licenses.

TNK-BP spokeswoman Marina Dracheva said the latest development plan was approved in May 1999 and has to be updated every five to seven years.

"In early 2003 an update was commissioned," she said. "We produced and presented the field development plan at the end of April" to the Industry and Energy Ministry. "The plan will be defended in the second quarter of 2005."

TNK-BP holds the license to the Samotlor field through 2013.

"Oganesyan's statements are troubling, as they threaten another key contributor of the base," Adam Landes, a London-based analyst at Renaissance Capital, said in an e-mailed message. "They also display total ignorance of what TNK-BP is achieving at Samotlor."

Saratovneftegaz, a separate TNK-BP unit, is being investigated by regional prosecutors into allegations it extracted oil at four fields in the Saratov region without the appropriate licenses.

Russia opened a review of oil field licenses last year amid investigations into Yukos and its biggest owners, including Mikhail Khodorkovsky.

Yukos last month was told it will retain oil-drilling rights in western Siberia after a government review found that license violations there were not serious enough to justify withdrawing the permits.

Russian exploration and development licenses regulate oil and gas production rates, specify how many wells have to be drilled and state how companies must use petroleum gas that is extracted alongside the oil. As part of the licensing procedure, the companies must have technical plans that are approved by the government, Oganesyan said.

In 2002, Samotlorneftegaz, TNK-BP's largest oil producer, pumped 329,000 barrels per day at Samotlor, which peaked at 3.1 million barrels per day in 1980. That's equal to about 60 percent of the oil expected to be shipped this year from Russia.

"TNK-BP is undertaking measures" to eliminate violations, Oganesyan said.