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The Guardian: BP sells Russian assets for $1bn: "There is controversy over drilling near Sakhalin, an island off Russia's east coast, since Shell started developing an offshore field there close to where whales feed.": Thursday 22 Dec 2005

Terry Macalister
Thursday December 22, 2005
The Guardian
 
BP has sold the first significant slice of its Russian holdings since it bought TNK three years ago. The sale price of about $1bn (574m) is twice what it paid for the assets. The company insisted the move did not signal any waning of interest in Russia, which has been a major contributor to BP's overall production growth.

The assets sold include a 75% stake in TNK-Sakhalin which has rights to explore the Lopukhov field with estimated reserves of 733m barrels. There is controversy over drilling near Sakhalin, an island off Russia's east coast, since Shell started developing an offshore field there close to where whales feed. BP's holding has been sold for an estimated $400m to Sibneft, a Russian oil group owned by state-controlled Gazprom. BP also sold four other subsidiaries to privately-owned Russneft for around $600m. These include Saratovenftegas, which produces 42,000 barrels of oil equivalents a day with reserves of up to a further 136,000 a day.

In addition BP is selling the Orsk refinery and more than 100 petrol stations in Orenberg, Siberia, plus a lubricant firm.

"TNK-BP is pleased that we have been able to make this sensible adjustment to our inherited portfolio of assets," said Robert Dudley, chief executive of TNK-BP.

Fadel Gheit, analyst with Oppenheimer & Co brokerage in New York, said: "Now BP has had time to assess all the operations [after buying TNK] it makes sense for it to keep the best ones and dispose of those which don't provide so much value."


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