BP to Withdraw from Sakhalin-5 Gas Project

BP is to withdraw from the Sakhalin-5 gas project in Russia, the company has confirmed. It is now working with partner Rosneft to handle its withdrawal from the project.

"During recent meetings of the Elvary Neftegaz shareholders and board, BP confirmed its intention to exit the joint venture," the Dow Jones newswire reports BP as saying last Friday. "There are many reasons for this decision, including the challenging economics of the discovered resource in the KV [Kaigansky-Vasuykansky] block."

BP currently holds a 49 per cent stake in the Sakhalin-5 gas prospect with Rosneft holding a 51 per cent stake. The two companies began exploration on the area between 2004 and 2009.

Rosneft had previously indicated that BP intended to withdraw from the project, saying the company had lost interest in the project. 

"BP is not interested in this project and we have made no secret of that," chief executive of Rosneft Eduard Khudainatov said. "We are very interested. And we will not offer this project to anyone else."