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. Last Updated: 07/27/2016

BP Offers 'Interesting Ideas' for Kovykta

BP has offered "interesting ideas" to Gazprom to help resolve a dispute about the Kovykta natural gas field in eastern Siberia, Gazprom chairman and First Deputy Prime Minister Dmitry Medvedev said Saturday.

"There are a number of interesting ideas that could bring our positions closer together," Medvedev said. One involves "using not only Russian but foreign assets," he said in an interview at the St. Petersburg International Economic Forum, without elaborating.

BP's Russian unit TNK-BP is seeking to ward off a threat from the Natural Resources Ministry to revoke its license at Kovykta.

Gazprom is waiting for the status of the license to be resolved because it does not want to join "a dead project," Gazprom deputy CEO Alexander Medvedev said in a separate interview Saturday. BP and Gazprom would have sufficient technology and financial strength to develop the project together, he said.

"We're in discussions with TNK," the deputy CEO said. He declined to give details. "I hope we'll conclude them soon."

Gazprom rejected a previous offer from TNK-BP for a controlling stake in the project, which includes plans to build an export pipeline to China, saying there will not be demand for the gas before 2015.

TNK-BP CEO Robert Dudley is "confident" of retaining a stake in Kovykta, Interfax said Friday.

Putin said last week that the government was losing patience with the shareholders in the Kovykta project for failing to produce as much as they had promised. TNK-BP owns 63 percent of Rusia Petroleum, billionaire Vladimir Potanin's Interros Holding owns 26 percent and the Irkutsk region owns the rest.

"This problem is resolvable in principle, but it needs to be resolved in line with Russian law and with goodwill from the participants," Dmitry Medvedev said Saturday.

First Deputy Prime Minister Sergei Ivanov said he did not exclude the possibility that TNK-BP could lose the license, reiterating Putin's words, Interfax reported Saturday.

The ministry will decide by June 15 whether to revoke the license, after previously ruling that Rusia Petroleum failed to meet the license requirements to supply 9 billion cubic meters of gas to the Irkutsk region. TNK-BP, which has invested almost $500 million at Kovykta, said gas demand in Irkutsk was no more than 2.5 bcm per year.

Asked which of BP's projects Gazprom was interested in as part of a wider deal, Alexander Medvedev said it was no secret that BP's strengths were in upstream -- exploration and production -- and liquefied natural gas.

He also said Gazprom had never hidden its interest in BP's Sakhalin-4 and Sakhalin-5 projects off Russia's Pacific coast.

Medvedev said Gazprom was talking to ExxonMobil about buying all the gas from its Sakhalin-1 project, co-owned with Rosneft, ONGC and a Japanese consortium.

Gazprom CEO Alexei Miller was absent from the forum, as he was in the hospital with a kidney ailment.

Bloomberg, Reuters