British oil giant BP plc said Friday its Russian joint venture TNK-BP agreed to sell its entire 62.9% stake of a unit that holds the license for the giant Siberian natural gas field Kovykta and 50% of the unit building a related gasification project to state-controlled gas monopoly OAO Gazprom for $700 million to $900 million. The exact price will be set in three months based on the market.
Either way, it seems BP may be getting a raw deal considering Wood Mackenzie corporate research chief Derek Butter said the price undervalues the stake, which the firm thinks is worth $2.8 billion. However, Russia is being generous, since TNK-BP will have the option to buy a 25% plus one share stake in the field once the companies have finalized a joint investment or asset swap. TNK-BP has invested $500 million in the field but hasn't booked any reserves from it. TNK-BP has been under pressure from Russian regulators who have claimed it's missed production targets and threatened to pull its license.
The Kovykta deal is not the only time Gazprom has acquired reserves at a discount from Western companies. Gazprom also bought control of Royal Dutch Shell plc's liquefied natural gas project on Sakhalin Island at what many considered a bargain price. The moves are part of the Russian government's attempt to take more control over its prolific oil and gas reserves. —Claire Poole
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