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. Last Updated: 07/27/2016

TNK-BP Gets Deadline to Fix Kovykta Fields

The subsoil agency has given TNK-BP three months to fix licensing violations at its giant Kovykta natural gas development or risk losing the license to develop the field, environmental regulator Oleg Mitvol said Friday.

Observers say intense regulatory pressure on Shell's Sakhalin-2 project led to the company selling a controlling stake to gas monopoly Gazprom, and suggest Kovykta could be next as the Kremlin seeks to expand its control over key energy projects.

Officials have threatened to revoke the license due to underproduction at the field. The joint venture, TNK-BP, has maintained that the local area needs only a fraction of the 9 billion cubic meters of gas it was obliged to produce last year under the original development license, which was drawn up in the 1990s.

Mitvol said he was not aware of any significant environmental violations at the production area. As deputy head of the Federal Service for the Inspection of Natural Resources Use, he has taken an aggressive stance against oil companies.

The company has long been unable to reach an agreement with Gazprom on exporting the gas to China and South Korea. By law, Gazprom is the only company in Russia allowed to export gas.

TNK-BP chief executive Robert Dudley has said his company is in little danger of losing the license for Kovykta, but has also played down the damage that pulling the license would cause since TNK-BP has yet to book any of the Kovykta reserves.