TNK-BP allocates $1.7B to Uvat, Verkhnechonskoye upstream developments

TNK-BP today announced the results of a meeting of the Board of Directors of TNK-BP Limited, the ultimate holding company of the TNK-BP group of companies which took place February 12. The meeting was chaired by Mikhail Fridman, Executive Chairman of the Board of Directors of TNK-BP. 

The Board discussed TNK-BP’s performance in 2009 and noted that the company had demonstrated strong performance in all areas thanks to aligned teamwork, efficient operations and cost management initiatives. Production year-on-year grew by 2.9% and amounted to 1.69 million barrels of oil equivalent per day. TNK-BP continued to improve its performance in the area of health, safety and environment with oil spills reduced by 11% and the average rate of associated petroleum gas utilization amounting to 84.4%. 

The Board endorsed investment projects for a total of more than US$1.8 billion to be spent in 2010-2012. Out of this amount, US$1.7 billion is allocated for two major Upstream projects: full field development and creation of regional infrastructure in Eastern part of the Uvat group of fields and further development of the Verkhnechonskoye oil field in East Siberia. 

In Downstream, members of the Board supported investment of US$137 million in the diesel hydrotreater unit at the Saratov refinery. This investment is part of the US$1.3 billion fuel quality programme endorsed by the Board in October, 2009, and aimed at bringing the fuel produced by the company in line with new technical regulations. 

The Board considered a number of inorganic opportunities which are in line with the company’s growth strategy. Members of the Board endorsed the company’s participation in the joint venture between National Petroleum Consortium LLP and Petroleos de Venezuela (PDVSA), the state oil company of Venezuela, to appraise and develop the JUNIN 6 block in Venezuela and to release the funding of US$180 mln to support these activities in 2010-2012. 

Management informed the Board on the status of completing the deal to acquire Vikoil, a company engaged in retail and wholesale distribution of oil products in Ukraine. The Board confirmed the strategic interest to develop business in Ukraine and the company’s plans to build up retail and marketing capabilities. 

“We are pleased with TNK-BP’s results in 2009. Strong leadership and inspired teamwork brought excellent results on all fronts of our operations. The company put on stream two new production centres in Uvat and Verkhnechoskoye which made a material contribution to its production levels, “said Mikhail Fridman, Executive Board Chairman of TNK-BP, “The Board is confident of the management’s ability to fulfill new challenging tasks and endorsed these investments to promote major projects which will help to build our long-term future. We supported a number of international initiatives which comply with our strategic intent to transform TNK-BP into a world—class oil and gas company with a diversified asset portfolio.”

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