Stake on the Future
09 Sep 2004
Attempts at introducing extra duties on energy carrier export showed once again that the market is psychologically "mature" for reverse re-orientation to domestic sales. Of course, constantly growing oil prices encourage the export-oriented approach in the extracting majors. However, the highest success rates are demonstrated by those targeting long-term operations, rather than momentary profit today. Perhaps, by its development rate, Russo-British TNK-BP may be called a successful player in the Russian petroleum market. The company launched a series of new promising projects that used to be regarded as difficult to implement during the first year of its existence alone. We mean, first of all, development of the Uvat group of fields in the south of the Tyumen Region. So far this task - to develop several dozens of oil-bearing sections scattered in impassable tundra where there are no roads or electricity or pipelines - seemed to have been impracticable. However, experience accumulated by Russian and British oil workers, in combination with the cutting-edge technologies, significant resources and assistance on the part of regional administration, enabled TNK-BP to embark on the project's implementation. Total investments that will be raised for the Uvat Group development and will account for a considerable share in the Tyumen budget will amount to $ 2.3 billion during 20 years. The corporate development rates enabled to get down to a large-scale corporate reconstruction, which is aimed at creation of a holding to become the operations center for the entire TNK-BP in the Tyumen Region. Management estimates that these measures will greatly enhance the company's appeal for Russian and foreign investors, will help to adjust production costs, to elaborate the single tax policies and to improve corporate manageability. The record amount of $1 billion will be annually invested by TNK-BP into its development and upgrading of existing assets. The purchase of 56% in Rospan gas-extracting enterprises has been announced recently. Rospan owns deep-lying New Urengoy and East Urengoy gas and condensate fields in the Yamal Nenets Autonomous Area. The company extracts more than one billion cubic meters of gas and 300,000 tons of condensate annually. Rospan's reserves are estimated at 950 billion cubic meters of gas. Premium engine oil production on the basis of the Ryazan refinery is fully transferred under control of TNK-BP. The idea is that these products may account for up to 10% of the CIS market. Source: Izvestiya
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