TNK-BP COO Schrader targets '10 output up 1-2 percent

NIZHNEVARTOVSK, Russia (Reuters) - Russia’s No.3 oil firm TNK-BP expects 2010 hydrocarbon output to rise by 1-2 percent excluding the Slavneft business, chief operating officer Bill Schrader told Reuters in an interview late Friday.

“Our target this year is for growth between 1 and 2 percent (for hydrocarbon output)...excluding Slavneft,” Schrader said.

In 2009, oil and oil equivalent output was 1.69 million barrels per day.

The executive at the company, which is half owned by oil major BP BP.L, also stressed that the joint-venture recorded a profit in 2009 despite a number of business and legal disputes.

“There are rules and regulations you have to follow to operate in this country,” the executive said,

“The rules we have here are understandable and we can operate in this environment profitably and you will see it in the announcement of 2009 results.

TNK-BP is scheduled to release its financial results for 2009 on March 1.


The company is currently involved in a dispute over its East Siberian Kovykta gas field, with Russia’s RosPrirodNadzor environmental watchdog recommending stripping TNK-BP’s license.

Schrader declined to comment on the matter.

The company was involved in a similar dispute in 2007, when it agreed to sell Kovykta to state-controlled gas transport monopoly Gazprom GAZP.MM for around $1 billion in a deal that has thus far failed to materialize.

The following year a dispute erupted between BP and its mainly Russian partners which resulted in the departure of then-chief executive Robert Dudley.

Schrader said this dispute is in the past, and that all shareholders are united behind a single strategy.

“Now we have got a new board, independent directors...I think the company is operating very well and the shareholders dispute is truly in the past,” he said.

“I think the dispute actually brought all parties closer together and 2009’s performance will demonstrate that it probably has made the company stronger.”

In a separate interview on Friday, TNK-BP co-owner German Khan told Reuters his company was seeking either to keep Kovykta or sell the field for around $1 billion.

Khan added that talks with Gazprom were not active and that TNK-BP is “looking for other options.


Schrader also said he is looking forward to working with new chief executive Maxim Barsky, who will join the company in 2011 and continue to pursue TNK-BP’s new strategy of international and domestic expansion adopted after Dudley’s departure.

“There are lots of things to work on both in Russia, around Russia and a number of CIS countries, as well as opportunities internationally,” Schrader said.

TNK-BP plans to invest $1.7 billion in two Siberian projects over the next three years, as well as $180 million in Venezuela.

The company could also form a strategic partnership with PKN PKNA.WA in order to manage the Polish company's Mazeikiu refinery in Lithuania.

“Our business is healthy now and we are looking for opportunities for growth,” Schrader said.

Reporting by Ekaterina Golubkova, writing by Alfred Kueppers; Editing by Ron Askew