The dispute over the Kovykta field — seen as a potential source of energy to China — should be resolved amicably, Deputy Prime Minister Igor Sechin was quoted as saying by Russian news agencies.

‘The user of the resource should understand his responsibility. But we are not talking about crude expropriation. All losses will be taken into account,’ said Sechin, a close ally of Prime Minister Vladimir Putin.

‘The decision in any case will be fair. Everyone will be happy,’ Sechin told journalists in the Siberian town of Nizhnevartovsk, the RIA-Novosti state news agency reported.

Last month, Russia’s state environmental watchdog recommended that the government revoke the license for Kovykta held by the company that operates the field, RUSIA Petroleum, which is owned by Russian-British energy firm TNK-BP.

TNK-BP is 50 percent owned by British oil major BP with the other 50 percent belonging to a consortium of billionaire Russian industrialists.

Kovykta, located 450 kilometers (280 miles) north of the Siberian city of Irkutsk, contains an estimated 2.0 trillion cubic metres of natural gas and is considered a major potential source of gas for energy-hungry China.

In 2007, TNK-BP agreed to sell Kovykta to Russian state-controlled gas giant Gazprom for between 700 and 900 million dollars in a deal seen as part of a Kremlin-backed campaign to tighten state control over energy assets.

However, the deal with Gazprom was never finalised, and analysts said last month’s decision by the state environmental watchdog was aimed at pressuring TNK-BP to lower the price it was asking Gazprom to pay for Kovykta.

Sechin, who oversees Russia’s energy sector, is one of the country’s most powerful officials and was viewed as a key player in efforts to tighten state control over oil and gas assets during Putin’s presidency from 2000 to 2008.
 

Source: http://www.khaleejtimes.com/No_crude_expropriation_BP