Moscow, 24 July 2012 – TNK-BP announces that the proposal made by TNK-BP top management on 20 July concerning the first stage of the full-field development of the Company’s Rospan gas condensate was not approved by the Board of Directors due to lack of support from BP representatives.
The recommendations for the further development of Rospan were presented by Executive Vice President for Upstream Alexander Dodds. Rospan is the key project in TNK-BP’s gas business development strategy, which was approved by the Board of Directors in September of last year. The full-field development of these license areas would allow the company to increase gas production at Rospan to 16.2 bln cubic meters per year by 2020, which represents a two-fold increase of TNK-BP gas production.
AAR-appointed directors supported management’s proposal, considering the successful execution of the project an important step in strengthening TNK-BP’s position on the global oil and gas market. None the less, management’s proposal did not receive support from BP-appointed directors.
An alternative proposal from BP’s directors was not supported.
TNK-BP management is convinced that the development of the Rospan gas condensate field is fully in line with the interests of TNK-BP and its shareholders and remains a strategically important project for the Company.
Taking into consideration the support of AAR-appointed directors, Company management intends to continue to work with BP representatives to clarify their position on this project. TNK-BP management is hopeful that its proposal will received support from BP representatives, which, in turn, will allow the Company to continue preparations for the start of full-field development of the Rospan gas condensate field.
The full-field development (FFD) of the Rospan license areas envisions the extraction of 273 bln cubic meters of gas, 50 mln tonnes of condensate, 13 mln tonnes of liquefied petroleum gas and 6 mln tonnes of oil. Full-field development of Rospan includes the drilling of additional gas condensate wells, construction of new technical facilities and also the creation of product transportation infrastructure (pipelines and rail loading facilities).
Rospan FFD includes 2 license areas (Novo-Urengoisky and Vostochno-Urengoysky) and consists of 2 phases. The first phases envisions production of 8.6 bln cubic meters per year, while the second phase is to produce 16.2 bln cubic meters per year.
Presently the project is in the pilot development phase with production of approximately 3.5 bln cubic meters of gas and 0.6 mln tonnes of condensate per year.