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. Last Updated: 07/27/2016

Rosneft Snaps Up Potanin's Oil Stake

MTVladimir Potanin
State oil firm Rosneft said on Thursday that it had agreed to buy a 25.9 percent stake in the eastern Siberian Verkhnechonsk oilfield, which is majority-owned by TNK-BP, a joint venture of British oil major BP.

Rosneft did not say how much it had agreed to pay for the stake, which is held by industrial conglomerate Interros, owned by metals-to-banking tycoon Vladimir Potanin.

Verkhnechonsk is the largest field so far discovered in eastern Siberia. It has recoverable reserves estimated at 201.9 million tons of oil (1.48 billion barrels), enough to meet China's import requirements for more than two years.

It also has 3.4 million tons of gas condensate, as well as 129.2 billion cubic meters of gas.

"We believe the sale will not affect the plans for development of Verkhnechonsk," a TNK-BP spokeswoman said in response to the announcement. "Those plans are clearly aligned with plans to develop untapped resources in eastern Siberia."

Eastern Siberia is far from export markets and has so far been little exploited compared to Russia's oil heartland of Western Siberia, but Russian plans for a major new oil pipeline to East Asia could make the remote field economically viable.

TNK-BP plans to build a 600-kilometer pipeline from the field to connect it to Russia's railway network and, later, to the major pipeline, enabling it to export to China and Japan.

TNK-BP said in August that it planned to invest $270 million in the field and pipeline link. But a company spokesman told Interfax last month that the total cost of bringing the field on stream could top $6 billion.

TNK-BP owns 63 percent of Verkhnechonsk, while the government of the Irkutsk region holds 11 percent.

TNK-BP's Rusia Petroleum unit, from which Verkhnechonskneftegaz was spun off, was in talks in 2003 with China National Petroleum Corp. about a possible venture to tap the field. Crude deliveries from Verkhnechonskoye will start as early as 2008, TNK-BP said in August.

"We sold this asset, as we had declared our aim to exit oil and gas projects," said Mikhail Barkovets, a spokesman from Interros. "We also have been marketing since 2001 our stake in Rusia Petroleum." He declined to comment on the value of the transaction.

Rusia Petroleum, in which TNK-BP holds a controlling stake, agreed in 2003 to sell 900 billion cubic meters of natural gas to China and South Korea over 30 years. Its Kovykta field holds 2 trillion cubic meters of gas reserves and may need a $17 billion investment.

Interros holds a 25.82 percent stake in Rusia, according to the gas exploration company's web site.

(Reuters, Bloomberg)