Analyst: British Petroleum might finance development of Sakhalin-5 oil and gas field

Analysts believe that one new condition of cooperation between Rosneft and British Petroleum in developing the Sakhalin-5 oil field could be British Petroleum's financing further development and preparation for extraction of the field. Broker Credit Service' Maxim Shein said 'Rosneft would like it if British Petroleum covered financing including preparing for extraction which would begin not earlier than 2010.'

At the same time, Shein does not rule out the possibility that when the field is ready for extraction a tender for a license on extracting could be organized. He also said 'it is possible, however, that Rosneft could receive a guarantee on extraction rights.'

As reported earlier by the Agency for Conflict Situations, the state oil company Rosneft and British Petroleum are preparing a new agreement on developing the Sakhalin-5 field. According to Rosneft's Dmitry Panteleyev the companies 'are negotiating new conditions for cooperation.' He did not comment further. Rosneft says the Sakhalin-5 field has approximately 783 million tons of oil and 432 billion cubic meters of natural gas. Maximum yearly extraction is expected to reach 26 million tons of oil and 22 billion cubic meters of natural gas. The companies are expected to spend USD 149 billion on developing the field, which could yield an income of USD 357 billion.

On May 28, 1998 Rosneft and British Petroleum-Amoco signed a charter agreement creating an alliance to develop the Sakhalin field. Rosneft owns a 51% stake in the venture, BP-Amoco 49%.

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