Russian gas giant Gazprom sees no need to develop the giant Kovykta gas field in the near future, a company executive told a news conference today. "From the point of view of long-term balance we don't see how gas from Kovykta can be used," Reuters quoted Viktor Timoshilov as saying. UK supermajor BP's Russian venture, TNK-BP, said last week its unit that controls Kovykta had filed for bankruptcy following a failure by TNK-BP to sell the field to the Russian government. Kovykta, which TNK-BP has controlled for about 15 years, had been meant to supply China before Moscow started asserting control over natural resources and made Gazprom a gas export monopoly.
Russian officials have repeatedly threatened to withdraw the Kovykta licence from TNK-BP for low production volumes. BP and its partners have argued that output targets for Kovykta set by the Russian government became too onerous after it was unable to supply China, because Russian demand did not make up the shortfall. TNK-BP agreed to sell Kovykta to Gazprom for around $1 billion to cover its investment costs but the deal has never been finalised and talks have been suspended, as Gazprom's finances became stretched because of the financial crisis and unclear prospects of gas exports to China.
Kovykta is classified as a strategic field and under the current legislation only companies majority owned by Russian capital can develop it. Deputy Prime Minister Igor Sechin said last month he expected a gas pricing deal with China by September and analysts have said it could be good news for the future of Kovykta as it is the closest field to Chinese borders. Timoshilov said Gazprom would cope without Kovykta to supply China: "We don't have issues with resource base in this region".
