Source AP ©

BP to lose license to giant Kovykta gas field

A senior environmental official said Friday that BP PLC was likely to lose its license to develop a giant Siberian gas field that could be used to supply Asian markets.

Oleg Mitvol, the deputy head of Russia's environmental watchdog, Rospriorodnadzor, said he expects the license to be revoked as state regulators met to determine whether BP had been under-producing at the field and should therefore lose the rights to develop the 2.1 trillion cubic meters field.

Mitvol cited draft minutes from the meeting which recommend that BP's permit be pulled for failing to meet a 9 billion cubic meter per year production target. BP has countered that it was only meant to meet local demand, which is far lower.

The meeting comes against a backdrop of rising state control in the oil and gas industry: In December state gas monopoly JSC Gazprom took control of the Sakhalin-2 liquefied natural gas development on the Pacific Coast, elbowing Royal Dutch Shell PLC into a minority position, amid a series of environmental checks.

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