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TNK-BP Adds 460MM BOE to Oil, Gas Resources in ’08

AFX News Limited

Tuesday, January 27, 2009

Russian oil firm TNK-BP , half-owned by oil major BP, said on Monday it added 460 million barrels of oil equivalent to its estimated resources in 2008 due to geological exploration alone.

TNK-BP, Russia’s third-largest oil producer, published the information about the addition to its possible, probable and proved resources in a corporate bulletin on its Web site, www.tnk-bp.com. A TNK-BP spokeswoman said the company would publish the results of its annual reserve audit shortly, probably before the end of this month.

Russian Energy Ministry data showed TNK-BP last year produced around 69 million tonnes (506 million barrels) of oil and 10 billion cubic meters of gas (60 million barrels of oil equivalent) — a total 566 million barrels of oil equivalent.

The addition to the possible, probable and proved resources referred to in the bulletin have no direct bearing on the company’s reserves replacement ratio, which is calculated only from proved reserves — a narrower gauge of a company’s potential for extracting oil.

TNK-BP replaced its oil and gas reserves by 179 percent in 2007, the fifth consecutive year it added more to reserves than it produced. In 2006, it replaced 129 percent, compared to 137 percent in 2005, 127 percent in 2004 and 133 percent in 2003.

Analysts pay close attention to the reserves replacement ratio of oil companies for signs the firm is able to sustain production growth in the future.

As of the end of 2007, TNK-BP’s total proved reserves stood at 8.225 billion barrels of oil equivalent, under the U.S. Securities and Exchange Commission’s methodology on a life-of-field basis.

Under the less stringent criteria of the Petroleum Resources Management System, formerly known as the Society of Petroleum Engineers, total proved reserves stood at 9.982 billion barrels of oil equivalent, representing a replacement ratio of 297 percent.

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