The Guardian: BP upbeat on Russian prospects: “The early promise of the venture has also put pressure on BP rival Shell, which was hit this year after it overstated its reserves.” (ShellNews.net)

Reuters

Tuesday September 14, 2004

BP's Russian oil venture, TNK-BP, is maintaining crude production growth targets for 2004 to 2007, the company said yesterday. It added that it was also keeping to its growth forecast of 12% for 2004 and about 7% per year until 2007.

BP shares rose 0.5 % initially then fell 0.3% to 507.75p. Dealers said this was due to concerns over the impact of Hurricane Ivan, though the group emphasised the hurricane was not expected to affect its operations.

BP announced a $6bn-plus investment last year to form the 50-50 joint venture, TNK-BP, which is Russia's third largest oil producer behind Lukoil and Yukos. The link-up has boosted BP's access to the burgeoning Russian energy sector, a priority for oil majors looking for new fields as older ones dry up.

The early promise of the venture has also put pressure on BP rival Shell, which was hit this year after it overstated its reserves.

"TNK-BP seems to be hav ing a great deal of success in converting its plans into realisable gains in terms of production," said Teather & Greenwood analyst Zac Phillips, who rates BP a buy.

The company is also trying to simplify its corporate structure. It said it was considering consolidating its three existing Russian companies - TNK, Onako and Sidanco - into a single Russian holding company.

"Operationally, TNK-BP looks very sound," said ING analyst Angus McPhail, who kept a buy rating on BP stock.

BP shares have gained about 15% in value since the start of 2004.

http://www.guardian.co.uk/business/story/0,,1303774,00.html