Gazprom snaps up TNK-BP gas field

Gazprom has won the rights to the giant Siberian gas field previously owned by a unit of TNK-BP, BP's Russian joint venture.

Gazprom was reported to have paid $773m (£475m) for the Kovykta field, which boasts enough reserves to cover the world's gas needs for eight months, and which will allow the Russian gas export monopoly to strengthen its links with the all-important Chinese economy.

The auction for the rights followed TNK-BP's decision last year to file to bankrupt Russia Petroleum, its Kovykta unit, after failing to win clearance to export gas from the field to China.

Earlier, in 2007, TNK-BP agreed to sell the field to Gazprom for around $1bn, but the transaction fell through amid disagreements over the price.

Responding to the sale, VTB Capital oil and gas analyst Lev Snykov said, at $773m, Gazprom had won the rights "virtually for free".

"The value will be crystallised as soon as Gazprom reaches a more distinct agreement with China but it will definitely be more than they paid for [the field]," he said.