BP'S Robert Dudley Comments On Company's Projects In Russia
23 Apr 2003

BLOOMBERG Robert Dudley, vice president of BP Plc and chief executive of TNK-BP, made the following comments on the company's projects in Russia. TNK-BP is being set up to pool BP's Russian assets with those of Tyumen Oil Co.'s owners to create Russia's third-largest oil producer. Dudley also commented on AO Yukos Oil Co.'s plan to merge with OAO Sibneft. Yukos announced today it will buy Sibneft to create the world's No. 6 publicly traded oil company. Dudley spoke at Russia's upper house of parliament. On the plans for Yukos Oil Co. and Sibneft's merger: "The merger will be tremendous" for Russia. "It will create one of the world's largest oil companies." On the price of crude oil needed for production to be profitable: We are looking at "a price of $18 per barrel. If the price falls, production will be non-economic with current tax" rates. On what Russia needs to attract foreign investment: "The most important thing to attract investment is a stable fiscal regime." Otherwise, "it will be very difficult to attract investment. Stability is what's needed." On TNK-BP's plans for the Kovykta gas field in East Siberia: Dudley said earlier this month BP may invite Gazprom, the world's biggest natural gas producer, to participate in a $5 billion project to tap the field close to the Chinese border. "Kovykta is a very large project. First step for it to be economic is to find the market. "If the gas doesn't go to China, it would sit there for decades. The project "would cost billions. "I would be in favor of a production-sharing agreement on this project. In any other case it would be difficult to talk to creditors." On plans to build a gas pipeline to Nakhodka on Russia's Pacific coast: "Another market is to build a long pipeline to Nakhodka to produce liquefied gas. But it would be difficult to compete with Indonesia" and other gas-supplying countries. On whether BP would integrate the half of Russian oil producer Slavneft owned by Tyumen into TNK-BP: "BP and TNK do not have an agreement on what this 50 percent of Slavneft means for the new company. We are waiting for a proposal from TNK."

CTF Holdings Ltd.

Alfa Group Consortium is one of Russia’s largest privately owned financial-industrial conglomerates, with interests in oil and gas, commercial and investment banking, asset management, insurance, retail trade, telecommunications, media, technology, as well as other industrial-trade and special-situation investments.

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