TNK-BP Board Supports ’09 Business Plan
11 Dec 2008
TNK-BP today announced that its Business Plan for 2009 had been supported at a scheduled meeting of the Board of Directors of TNK-BP Limited, the ultimate holding company of the TNK-BP group of companies.
The 2009 Business Plan holds TNK-BP production broadly flat on 2008 with capital expenditure for the year of $3.3bn. In 2009, the company plans to produce 600 million barrels of oil equivalent for the year. This will be achieved by a range of measures but primarily by the extended use of technologies for efficient exploitation of existing fields and an increased contribution from recently commissioned new fields such as Verkhnechonskoye, Kammenoye and Uvat.
The Board noted that for full year 2008, the company remains on track to deliver its best year since inception in terms of operating and financial performance, despite the rapid deterioration of the business environment in the fourth quarter.
The Board also reviewed progress of the top management and governance transition currently underway inside TNK-BP, pursuant to the agreement reached between shareholders in September. However, there was no discussion or nomination of any individual candidate as the company’s next permanent CEO. Despite recent speculation, this item was never on the agenda for consideration at the meeting.
Interim CEO Tim Summers noted:”From management’s viewpoint, this was a successful and helpful meeting. The Board supported management’s proposals for the Business Plan and investment levels for 2009 and this allows us to be very clear on our objectives and priorities. In a tougher business climate, it is important that we focus on clear-cut priorities from the first day of the new year.”
Notes to Editors:
TNK-BP is Russia’s third largest oil company, 50% owned by BP and 50% owned by AAR (Alfa, Access Renova). TNK-BP’s shareholders also own close to 50% of another Russian oil and gas company, Slavneft. TNK-BP accounts for approximately 16% of Russia’s production (including its share of Slavneft). SEC proved reserves (life of field basis) were 8.225 billion boe as of December 31, 2007. The company’s upstream operations are located in West and East Siberia and the Volga-Urals region. TNK-BP owns and operates five refineries in Russia and Ukraine, and retails through a network of stations working under the BP and TNK brands.
From 2003 to date, TNK-BP has delivered industry-leading performance on a number of key metrics, including a proved reserve replacement rate (138%) and an average annual production growth rate of 8.3%. Cash distributions to shareholders have totaled more than $22bn, while taxes, duties and excise paid in Russia to state budgets at all levels from 2003 through end 2008 will exceed $90bn.
Changes in TNK-BP’s management team are taking place pursuant to the provisions of the MOU signed by TNK-BP shareholders in September 2008. Other changes currently being progressed under the MOU include changes to the Boards of Directors and corporate charters of TNK-BP Management (TBM) and TNK-BP Holding (TBH), as well as changes to the TNK-BP Shareholder Agreement between BP and AAR.
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