TNK-BP WILL SET UP NEW HOLDING COMPANY BY YEAR'S END-CEO DUDLEY

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MOSCOW, September 1 (RIA Novosti) - TNK-BP will set up a new holding company by the end of this year, the President and Chief Executive of the Russo-British oil giant, Robert Dudley, said in an interview with the Vedomosti newspaper Thursday.

According to Mr Dudley, third parties are now completing the evaluation of the assets that will be brought into the new holding company. TNK-BP is going to register it in Tyumen, a large industrial center in western Siberia, and will have to once again consult with the Russian government

and the Anti-Trust Ministry.

Initially, the holding will include TNK (the Russian acronym standing for the Tyumen Oil Company), SIDANKO and ONAKO. Other companies will join in later on. Their assets will be evaluated to see how the proportion of each individual group in the holding company's overall value. Minority shareholders then will be offered to exchange their shares for a stake in the holding. The offer will be made before the end of this year or in the first quarter of 2005, at the latest, Mr Dudley said.

TBK-BP's assets are being evaluated by four independent companies. DeGolyer&MacNaughton is auditing the reserves, which is the key asset; Deloitte is making a formal evaluation; PriceWaterHouseCoopers is providing consulting services in taxation-related issues; and White&Case is acting as a legal consultant, the TNK-BP chief said.

The new holding company will be formed in keeping with a comprehensive plan to restructure the Russo-British petroleum giant, Mr Dudley said. According to him, the planned overhaul is aimed at streamlining TNK-BP's corporate structure, specifically by slashing the number of the legal entities incorporated, as well as at consolidating the stakes of the minority shareholders in TNK-BP's subsidiaries and at increasing the transparency and efficiency of governance.

Speaking about TNK-BP's plans for the immediate future, the corporation's CEO said that its key priority would be to develop a number of deposits in the Tyumen region and to carry out several projects in western Siberia. According to Mr Dudley, TNK-BP's strategy consists in boosting and optimizing the recovery of oil from proven reserves.

TNK-BP was set up in September 2003 by merging the Russian groups TNK and Sidanko with BP's oil and gas assets in Russia and Ukraine.

TNK-BP is Russia's third largest oil company, and ranks among the world's top ten private oil producers. The Russo-British corporation owns five oil refineries in Russia and Ukraine and over 2,200 gasoline stations operating under the brands TNK and BP.

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