Russia: TNK-BP weighs options for next growth phase

TWO YEARS after its formation, TNK-BP has grown to be the country's second-biggest oil company, with production of 1.6m barrels a day. But TNK-BP cannot stay near the top of the Russian oil hierarchy unless it is allowed to explore and develop large new fields. TNK-BP was formed in August 2003 when BP pooled its Russian and Ukrainian oil assets with those of Tyumen Oil, a company owned by Russia's Alfa Group and Access/Renova. BP's $6.3bn investment in the merger was unique in Russia, where oil majors have not yet acquired large blocks of equity in domestic oil producers. Most of TNK-BP's fields are mature and wells yield more water than oil. Application of advanced technology has helped the