TNK-BP Won't Cut Jobs, Plans to Implement New Uvat Project

TNK-BP reckons upon generation of revenues required for fulfillment of all its financial liabilities, German Khan, Executive Director of TNK-BP, said at a briefing.

Mr. Khan holds that "there is no critical oil price, because at least three parameters must be taken into account in the overall context -- oil price, dollar/ruble exchange rate, and inflation."

"A certain structure of these three parameters makes oil production cost-efficient and economically expedient. For this reason, even at a price of $9 per barrel and an exchange rate of 50 rubles per dollar we can remain stable and viable," he explained.

"In current conditions, we will be able to maintain oil production at the level of 2008 with local drops within 1% and ensure revenues sufficient for fulfilling all our credit commitments and paying wages to employees and taxes to the regional budget," he added.

Mr. Khan noted also that the main emphasis will be placed on maintenance of oil production in mature field. "We have certainly curtailed our investment activities and will do our best to maintain the current production activities and volume in mature fields. This oil production volume generates the required cash flow, which is important to maintain in the current situation," the Executive Director of the company stressed.

"We are implementing the Uvat project, a new project in the Tyumen Region, in the framework of our agreements with the Administration of the Tyumen Region. We are going to open a new oil province in the southern part of the Uvat region in mid February and increase our oil production by approximately 2 million tons in this region," specified Mr. Khan. As the first step toward opening this new oil province, the company will complete construction of a 284-km long pipeline, which will connect a number of oil fields in the southern part of the Tyumen Region. In the Nizhnevartovsk Region, the company will continue its exploration and drilling works in mature fields and suspend operations in least efficient areas, the Executive Director said.

TNK-BP will refrain from massive layoffs.

"We have no plans to cut jobs or lower production significantly," said Khan.