By Ed Crooks in London and Catherine Belton in Moscow
Published: October 16 2008 23:33 | Last updated: October 16 2008 23:33
Gazprom, the state-controlled Russian gas group, is threatening to pull out of a deal to buy a stake in a vast east Siberian gas field from TNK-BP, BPs Russian joint venture, saying the stake is likely to be worthless.
The threat reflects the financial pressure on Gazprom, which is being forced to focus on its essential investments in relatively short-term projects.
Gazprom agreed to buy TNK-BPs 63 per cent stake in Kovykta, a field in eastern Russia, in June last year as part of a settlement to resolve a dispute over the licence for the field.
It agreed to pay $700m-$900m (515m-662m) for the stake, and also signed a memorandum of understanding with BP to set up a $3bn joint venture to develop projects inside and outside Russia. The deal was seen as an important step for BP in securing its presence in Russia, the country with the worlds biggest hydrocarbon reserves. The UK company has faced persistent problems in Russia, and this year waged a bitter fight over TNK-BP with the Alfa-Access-Renova group of Russian tycoons, its partners in the venture.
Kovykta is estimated to hold more gas than the entire proved reserves of Canada or Kazakhstan, and is a potentially important source of gas supply for Asian countries such as China and South Korea in the second half of the next decade.
However, Gazprom believes that its value is highly uncertain, given the long-term nature of the development, and also thinks the licence for the field is likely to be taken away from the TNK-BP-led consortium that runs it.
Yuri Trutnev, Russias natural resources minister, yesterday suggested the field was not producing enough gas to meet the consortiums licence obligations the issue at the heart of last years dispute.
One Gazprom executive told the Financial Times the company was dubious about paying hundreds of millions of dollars for a potentially worthless asset.
Gazprom and BP said the collapse of the Kovykta deal would not necessarily end their plans for broader co-operation.
The credit crunch and the fall in oil prices are forcing Gazprom to focus on the development of gas production and infrastructure in Russia with projects that will show results more quickly.
It is also facing a subtle change in the political landscape, in which its grip on Russias gas industry has been challenged following the appointment of Igor Sechin, chairman of rival Rosneft, as deputy prime minister in charge of the energy sector.
EDITORS CHOICE
Gazproms expansion hopes in doubt – Oct-16
Editorial Comment: Russian rescue – Oct-15
Moscow dictates rescue of oligarchs – Oct-14
Strained relations thaw over TNK-BP – Sep-04
Gas deal seals Moscow-Berlin entente – Oct-02
Copyright The Financial Times Limited 2008
Royal Dutch Shell conspired directly with Hitler, financed the Nazi Party, was anti-Semitic and sold out its own Dutch Jewish employees to the Nazis. Shell had a close relationship with the Nazis during and after the reign of Sir Henri Deterding, an ardent Nazi, and the founder and decades long leader of the Royal Dutch Shell Group. His burial ceremony, which had all the trappings of a state funeral, was held at his private estate in Mecklenburg, Germany. The spectacle (photographs below) included a funeral procession led by a horse drawn funeral hearse with senior Nazis officials and senior Royal Dutch Shell directors in attendance, Nazi salutes at the graveside, swastika banners on display and wreaths and personal tributes from Adolf Hitler and Reichsmarschall, Hermann Goring. Deterding was an honored associate and supporter of Hitler and a personal friend of Goring.
Deterding was the guest of Hitler during a four day summit meeting at Berchtesgaden. Sir Henri and Hitler both had ambitions on Russian oil fields. Only an honored personal guest would be rewarded with a private four day meeting at Hitler’s mountain top retreat.
IN JULY 2007, MR BILL CAMPBELL (ABOVE, A RETIRED GROUP AUDITOR OF SHELL INTERNATIONAL SENT AN EMAIL TO EVERY UK MP AND MEMBER OF THE HOUSE OF LORDS: 
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A head-cut image of Alfred Donovan (now deceased) appears courtesy of The Wall Street Journal.
