OREANDA-NEWS. February 28, 2011. TNK-BP released the results of the independent audit of its reserves as of the end of 2010. This represents the eighth annual external audit of the company’s reserves since its creation in August 2003, reported the press-centre of TNK-BP.

Under SEC methodology on a life of field (LOF) basis, TNK-BP’s total proved reserves were 8.794 billion barrels of oil equivalent.

The addition of 0.854billion barrels of total proved reserves constitutes a total proved SEC (LOF) reserve replacement ratio of 134%. The average SEC LOF reserve replacement ratio over the past seven years amounted to 140%.

This substantial increase in reserves was underpinned by petrophysical studies at oil fields in the Orenburg region, by active exploration and measures taken to support reservoir pressure at the Urnenskoye and Ust-Tegusskoye oil fields (in the Uvat group in the south of the Tyumen region), and also at the Verkhnechonskoye field in East Siberia. Favourable market conditions also contributed to the high reserves replacement ratio.

The latest audit also confirms that as of December 31st 2010, under the PRMS (formerly SPE) criteria, TNK-BP’s total proved reserves were 13.069billion barrels of oil equivalent. This represents a total proved PRMS reserves replacement ratio of 322% in 2010.

This reserves growth was achieved thanks to an increase in the oil recovery factor, resulting from efficiently maintaining reservoir pressure and engineering studies at the Verkhnechonskoye, Urnenskoye and Ust-Tegusskoye oil fields.

The increase was also supported by a rise in gas and condensate reserves at Rospan in connection with the signing of a long-term agreement with Gazprom and by development plans at the Novo-Urengoyskoye and Vostochno-Urengoyskoye fields.

Furthermore, testing and intensive drilling in the Orenburg region, as well as increased drilling activity at the Samotlor and Nyagan oil fields, have all contributed positively to the growth in reserves.

Beyond the proved PRMS reserve additions, about 572million barrels of non-proved oil reserves were added through exploration and appraisal activities, marking another successful year of resource renewal.

Francis Sommer, Executive Vice President Technology, TNK-BP, said:

“Achieving a SEC LOF reserves replacement ratio of 134% directly results from excellent teamwork and the application of innovative technology. These technologies have allowed TNK-BP to substantially increase production at Orenburg, to maintain good production levels in Samotlor, and also to realise production and efficiency growth at the company’s new projects.”

Notes to editors:
TNK-BP is Russia’s third largest oil company, 50% owned by BP and 50% owned by AAR (Alfa, Access Industries, Renova). TNK-BP also owns close to 50% of another Russian oil and gas company, Slavneft. TNK-BP accounts for approximately 16% of Russia’s production (including its share in Slavneft). The company’s upstream operations are located in West and East Siberia and the Volga-Urals region. TNK-BP owns and operates five refineries in Russia and Ukraine, and retails through a network of 1,490 stations. The Board of TNK-BP Ltd. consists of four representatives from each of the two shareholder groups and three independent directors.

The independent firm of DeGolyer and MacNaughton conducted the audit to criteria stipulated by both the United States’ Securities and Exchange Commission (SEC) and the SPE/WPC/AAPG/SPEE Petroleum Resources Management System (PRMS).US SEC regulations establish a stricter set of standards governing classification of reserves under management. Particularly, US SEC sets a different standard for Proved Reserves that requires a demonstration of continuity of production. TNK-BP quotes total proved reserves to SEC criteria, applied to the economic life of the field. Petroleum Resources Management System “PRMS” (formerly SPE) methodology provides a fairer reflection of the total resources available to be managed over the whole life of the field. PRMS guidelines rely to a large extent on continuity of reservoir geology rather than production.

Historical reserves replacement ratios for TNK-BP, reported on an SEC life of field basis are: 2004—127%; 2005—149%; 2006—129%.; 2007—179%; 2008 – 82%; 2009 – 177%.

Production and reserves figures quoted in this press release reflect TNK-BP numbers without the company’s 50% share in Slavneft.