TNK-BP has signed a farm-out agreement with Petra Energia for the acquisition of a 45% stake in 21 blocks in the Brazilian Solimoes Basin.

The 21 oil and gas exploration blocks, majority owned and operated by HRT O&G, covering an area of approximately 48,000 km2, are located in the Amazon's Solimoes basin. According to a Degolyer & MacNaughton reserves audit report, the blocks bring today for the company a net prospective and contingent resource of 783 Million barrels of oil equivalent (BOEs).

These include 11 discoveries, where oil and gas were tested. Initial production from the fields in the Solimoes basin is expected in 2012.

According to the signed farm-out agreement, the value of the transaction will depend on the future performance of the asset. HRT will remain the operator of the Solimoes project, with TNK-BP playing a more active role during the development and production stages.

The closing of the transaction will be subject to final agreement between TNK-BP and HRT concerning operations, approval from TNK-BP and HRT boards of directors, as well as approval from Brazilian federal regulators.

Michael Fridman, executive chairman of the board of TNK-BP, reiterated the company’s delight to have successfully completed negotiations with Petra Energia regarding the farm-out agreement for the Solimoes concession in Brazil.

According to Fridman, negotiations on this project are still ongoing and a number of additional agreements have to be negotiated with the Solimoes operator and majority partner, HRT. Management hopes to have these agreements finalized before the end of August and submit the entire investment for Board approval by September, said Fridman.

TNK-BP is Russia’s third largest oil company, 50% held by BP and 50% held by the AAR Consortium (Alfa Group, Access Industries, and Renova). TNK-BP accounts for approximately 16% of Russia’s production (including its share of Slavneft). SEC proved reserves (life of field basis) were 8.794 billion boe as of December 31, 2010.
 
TNK-BP is a leading Russian oil company and is among the top ten privately-owned oil companies in the world in terms of crude oil production. The company was formed in 2003 as a result of the merger of BP’s Russian oil and gas assets and the oil and gas assets of Alfa, Access/Renova group (AAR).
 
The shareholders of TNK-BP also own close to 50% of Slavneft, a vertically integrated Russian oil company.

19th July 2011