March 2006-TNK-BP in Major Dispute Over Gas Field
One of TNK-BP's most valuable assets was the Kovykta gas field in eastern Siberia. The license to develop Kovykta was held by Rusia Petroleum, 62.89 percent owned by TNK-BP and previously controlled by Sidanco. TNK-BP wanted to develop the gas for Asian markets, and Gazprom (the Russian government-owned natural gas company) said the gas should be developed for Russia. There was speculation that Rusia Petroleum's license for the field would be revoked. The Natural Resources Ministry accused TNK-BP of producing too little gas at the field. TNK-BP argued it could not produce the 9 billion cubic meters per year stipulated in the license since Gazprom had blocked construction of a pipeline to China, and local demand was insufficient. TNK-BP had been lobbying for years for the license to be amended.