BP to sell its share in Siberian gas field

Oil company BP's Russian joint venture plans to sell its share in a huge Siberian gas field to state-owned Rosneftegaz after years of official pressure,a shareholder in the joint venture told a Russian news agency Tuesday.

Businessman Viktor Vekselberg was quoted by RIA-Novosti as saying that the TNK-BP joint venture will sell its share in the Kovykta field for up to $900 million, and the deal could be finalized by late 2010.

"No extreme measures wil be taken, so the general tension is over," Vekselberg was quoted as saying.

As the Kremlin launched a barrage of probes against TNK-BP in recent years, ranging from labor checks to tax claims, BP PLC accused the Russian owners, including Vekselberg, of using corporate raider tactics to try and wrest conrol of the joint venture.

Last month, Vekselberg told Russian President Dmitry Medvedev that the probe into Kovykta's license agreement only harms the investment climate in Russia.

TNK-BP, which owns 62.9 per cent of the project, said it invested $664 million in developing Kovykta, one of the world's largest undeveloped gas fields which contains about 2 trillion cubic meters of gas reserves.

TNK-BP came under heavy official pressure in 2007, when government regulators said it was not meeting production targets at the giant gas field in Siberia and threatened to withdraw its license.

TNK-BP originally planned to send Kovykta's gas to China and South Korea but these plans were hampered when Gazprom became Russia's monopolist gas exporter in 2006.

The company tried to sell it to Gazprom for about $1 billion, but the deal was never completed.