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. Last Updated: 07/27/2016

Trutnev Sees TNK-BP Losing Kovykta

Itar-TassTNK-BP workers drilling a well at the Kovytkino gas field. Yury Trutnev says the field's license may still be withdrawn.
TNK-BP is still at risk of losing its license to operate the huge Kovykta gas field despite winning the right to a court hearing, the natural resources minister said Tuesday.

The firm gained a reprieve against the threatened withdrawal of its license for the east Siberian field by persuading a court in the Irkutsk region to clarify its license obligations at a hearing set for May 23.

Asked whether he still expected the license to be withdrawn, Natural Resources Minister Yury Trutnev said: "I think so, yes. They are not fulfilling their license agreement.

"Irkutsk arbitration court is not the highest court. The final decision will be taken by the Federal Service for the Inspection of Natural Resources Use," Trutnev told reporters at a conference in Moscow. "I am sure the final decision will be fair."

Trutnev wants to withdraw the Kovykta license on the grounds that production at the field is far below the amount stipulated in its license terms. But the firm says Gazprom has refused to let it export the field's gas to China, forcing it to supply the far-smaller local market instead.

Gazprom and TNK-BP have been in talks over Kovykta for years, and TNK-BP has said it would be prepared to see Gazprom take control of the project. The Irkutsk regional administration, which has a minority stake, agrees.

"We would be very glad if Gazprom entered the project," Sergei Voronov, deputy head of the regional administration, said on the sidelines of a conference in Moscow.

"The most important thing for us is that the dispute over Kovykta is resolved at last," he said, referring to the dispute between TNK-BP and Natural Resources Ministry. "The situation is ridiculous right now. We're sitting on gas and we can't use it."