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. Last Updated: 07/27/2016

Gazprom, BP Delay Kovykta Deal Amid a Series of Talks

Gazprom, BP and its Russian venture TNK-BP will not have time to close the Kovykta deal in December amid talks over a broader range of issues, Gazprom said Thursday.

"BP's chief executive [Tony Hayward] flew to Moscow today and we held talks about a very broad number of cooperation issues. As to the Kovykta deal, we won't be able to close it on time," Gazprom's spokesman Sergei Kupriyanov said.

The meeting between Hayward and Gazprom's CEO Alexei Miller is the second in November and the fourth over the past six months.

Industry sources have said contacts between the two bosses have intensified as a lock-up period on TNK-BP's shareholders is due to expire at the end of this year and Gazprom may want to buy 50 percent in the firm from the Russian shareholders.

Such a deal would be another milestone in the Kremlin's drive to regain control over the strategic energy sector and would give it a share of over 60 percent of Russia's oil production.

BP owns the other 50 percent in TNK-BP and industry sources have said it would not heavily oppose changing partners since Gazprom enjoys full support of the Kremlin, while the current five billionaire shareholders have conflicting interests and invest in other businesses.

"We continue to believe that the potential entry of Gazprom into TNK-BP would help the latter to strengthen its political links and maybe even get access to best assets in Russia," Renaissance Capital said in a note this month.

The Kovykta deal was signed in June and under it BP, Gazprom and TNK-BP agreed to set up a strategic alliance.