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Last Updated: Monday, 21 May 2007, 14:26 GMT 15:26 UK
Threat to BP's Siberian gas field
BP logo outside petrol station
BP owns a 50% stake in TNK-BP
BP's Russian unit, TNK-BP, may have to halt production at a large Siberian gas field by the end of this month, Russia's environment agency has warned.

The agency told Reuters it seemed "obvious" that an inspection in the next few days would say TNK-BP was not complying with production obligations.

Both TNK-BP and UK energy giant BP have declined to comment.

Analysts say the move is just the latest attempt by the Kremlin to gain control of Russia's energy supplies.

Possible legal fight

Russian authorities claim TNK-BP is not producing enough gas from the Kovykta field.

They say that under the licence terms, Kovykta should have been producing nine billion cubic metres of gas per year by 2006, rather than the less than 2.5 billion cubic metres actually being processed.

TNK-BP has repeatedly countered that it currently cannot produce any more as the local region does not require additional supplies, and that a plan to build a pipeline to China was blocked by Moscow.

The firm, which is equally owned by BP and Russian group Alfa Access Renova, earlier this month won the right to challenge in court the threat to its Kovykta licence.

Yet the deputy head of the Russian environment agency, Oleg Mitvol, said he was not concerned by the possible legal challenge.

"They [TNK-BP] have yet to win the case and I hope the court takes a just decision," he said.

Analysts say the Kremlin wants state-run gas firm Gazprom to gain a majority stake in the Kovykta field on cheap terms.

Last year Gazprom secured a majority stake in a similarly large Russian oil and gas field formerly led by fellow UK energy firm Shell.

Shell and its partners granted Gazprom control of the Sakhalin 2 project off Russia's far east coast after Russian authorities repeatedly refused to grant them the necessary environmental certificates.

The Kremlin rejects any claims that it is using underhand tactics to gain state-control of Russian energy supplies.

Gazprom grabs Sakhalin gas stake
21 Dec 06 |  Business
TNK-BP settles $1.4bn Russia bill
10 Nov 06 |  Business
Russia launches probe at TNK-BP
09 Nov 06 |  Business
Sakhalin operator 'breaking law'
25 Oct 06 |  Business
Bumper oil prices lift BP profits
08 Feb 05 |  Business
BP fined over offshore gas leak
16 Nov 04 |  Scotland

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