OREANDA-NEWS. July 09, 2009. The Russian-British consortium TNK-BP may increase its investment program again. In mid June, the Board of Directors of the company decided to allocate an additional US400 million for capital investments, reported the press-centre of TNK-BP.

TNK-BP informed yesterday that possible growth of investments will be discussed at the next meeting of the Board of Directors scheduled for to July 24. “I think we will consider an increase of investments by US 100 million, which is fairly much,” said Viktor Vekselberg, Executive Director of TNK-BP, to the information agency RIA Novosti. Thus, the investment program of the consortium will grow by 20% up to US 3.5 billion.

Timothy Summers, Chief Operating Officer of TNK-BP, explained in late June that the investment program of the company was drawn up with an assumption that its size may be changed according to the market situation. Yesterday, TNK-BP detected positive dynamics of oil prices and decided to allocate additional funds for capital investments.

“The initial investment program of TNK-BP was not large and amounted to approximately US 3 billion. Implementation of current projects requires considerable funds, and the sooner they are invested, the faster is their return. Oil prices were rising in the last several months, and the company decided to increase its investment program by 20%,” said Valery Nesterov, analyst of Troika Dialog to Vremya Novostei. According to him, the investment program of Lukoil, which resembles TNK-BP in several parameters, is twice as large and amounts to approximately US 7 billion. “If a company wishes to maintain or even increase its production, it has to maximize its capital investments,” presumed the analyst.

Other Russian oil companies did not follow the steps of TNK-BP. “We are not going to increase our investment program yet,” said representatives of Lukoil, where several budget versions were worked out according to oil prices. Now the company is adhering to the base version. Representatives of Rosneft explained to Vremya Novostei that the current situation on the market is positive, but the company is not going to change the size of its capital investments (which is US 8.5 billion). Gazprom Neft, too, has no intention to extend its budget. Early this year, the company even shrank its investment program, but in May its Board of Directors decided to leave its size at the last year level equal to 88 billion rubles (approximately US 2.75 billion).

“The market situation is favorable now and allows oilmen to think about additional investments. However, the market is still very unstable. If oil prices fall tomorrow, the companies will likely have to curtail their investment programs,” said Mr. Nesterov.