TNK-BP Confident on Ukrainian PSA Bid

TNK-BP, a joint venture between Russia's TNK and British BP, has said it is confident about securing a production sharing agreement (PSA) for the Yuzivska field with the Ukrainian government.

Speaking in Kiev yesterday, executive director of TNK-BP German Khan said both companies involved in the venture brought a specific expertise to the country which strengthened their bid.

"We're full of optimism. We want to win, as we have advantages," the Kiev Post reports him as saying.

Mr. Khan, TNK-BP said these advantages include the joint ventures knowledge of the Ukrainian gas market as well as BP's expertise in shale gas and other gas technologies.

The venture's focus, he said, would be on exploration and production on the Black Sea Shelf. He ruled out any chance of TNK-BP exploring for coal-bed methane in Ukraine.

He said the company was in discussions with the government about the exact nature of the investment and its implications.

"We're consulting the government to understand what primary tasks are set for the investor: the short-term task is to replenish the budget or the long-term tasks - to obtain additional gas stocks," he said.

A production sharing agreement with the government may help TNK-BP to recoup after massive profit losses in the past two years, totalling $68 million and $23 million in 2010 and 2011 respectively. The losses had motivated the company to cut its administrative staff in Ukraine by half , the company said last week.