TNK-BP ANNOUNCES STRONG RESERVE AUDIT RESULT
01 Jun 2004
TNK-BP today released the results of the first comprehensive audit of the company's reserves. The audit reflects TNK-BP's exploration, production and development activities during 2003 and describes the resulting reserves position as of December 31st, 2003. This is the first such audit across all of TNK-BP's assets since its formation on August 29th, 2003 and establishes a consolidated reserves baseline for the company. The independent international firm DeGolyer and McNaughton conducted the audit to the criteria stipulated by both the United States Securities and Exchange Commission (SEC) and the Society of Petroleum Engineers (SPE). The audit confirms that as at December 31st, 2003, under the standards set by the SEC, TNK-BP's Total Proved reserves increased from 4.1 to 4.3 billion barrels of oil equivalent. Of these, Proved Developed reserves grew from 3.2 to 3.4 billion barrels. Under SPE criteria, Total Proved reserves decreased from 9.4 to 9.0 billion barrels. SPE Proved Developed reserves moved from 6.1 to 6.0 billion barrels of oil equivalent. Both sets of figures are broadly consistent with the company's previously stated estimates based on its assessments of the heritage company reserves positions. The audit results do not reflect any reserves or resources associated with the ownership of 50% of Slavneft by the shareholders of TNK-BP. During 2003, TNK-BP grew production by 13.8% to 63.8 million tons (average daily production 1.276 million barrels of oil per day). Based on SEC criteria TNK-BP replaced 133% of this production with new Proved reserves. This replacement ratio is an increase on the average of 25-35% year on year replacement ratio achieved by the heritage companies in 2001-2002 and reflects TNK-BP's strengthening commitment to create a sustainable production base by continually replacing production with new reserves. Under SPE standards, TNK-BP replaced 83% of its production. President and CEO of TNK-BP, Robert Dudley said: "This is clearly good news and confirms our previous estimates of TNK-BP's primary reserves base. DeGolyer and McNaughton is a highly respected and independent firm and we value the deliberately conservative approach they have taken in this first company-wide audit. The work to identify new reserves is vital to extending the life of our company and to helping sustain the communities where we operate. " "The audit also demonstrates the first results of our drive to consistently replace more reserves than we produce each year. This process will accelerate as we see further results from the full scale deployment and application of technology and investment across the asset base", he concluded.
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