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In comparison with the Sakhalin 1 and Sakhalin
2 projects, BP has not gone through a PSA [Product Sharing Agreement].
Do you think this has helped to improve the speed and efficiency
of the project so far?
Yes, it has certainly helped towards the development of the project.
When we were entering the market we noted that other projects like
Sakhalin 3 were stalled out in negotiations and thus we made a decision
to go ahead without a PSA. At the same time, our partnership with
TNK included a great deal of licenses that were non-PSA, so we decided
to act first instead of waiting for the PSAs to be handed out by
the Ministry of Energy. In retrospect, this decision allowed BP
to progress at a faster pace.
What is your estimate of the potential reserves in the Sakhalin
5 block?
Obviously we would not be exploring here if we did not think there
was the potential for features or clusters of features that will
offer high volumes of oil and gas. The first well that we dilled
is a first insight into the potential of the area, yet we will have
to do some more drilling before we can fully determine the size
of reserves.
Although the block is being developed in partnership with Rosneft,
all the funding is coming from BP. Do you think that this is fair?
BP is financing the exploration phase, yet this money will be reimbursed
by Rosneft from production earnings in the future, and we have established
faire arrangements if we go to development. So we are both satisfied
with the agreement - it is a constructive working relationship,
whereby Rosneft can secure exploration licenses and we can provide
funding and technology for them. So their local knowledge together
with our technology and funding is the basis for our partnership
which will certainly evolve and further develop in the future.
Gazprom has recently announced intentions to
merge with Rosneft. So how are you positioning yourself with Gazprom
if there is a change in management within Rosneft?
I would not say that we are positioning ourselves; we are willing
to work with whoever is our partner. Ultimately we will wait and
see what happens and at what pace the merger progresses. If Russia
decides that its two state companies should be one, then that is
a question for Russia to decide. Meanwhile, we will continue to
work to the best of our abilities with our partners.
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Is BP Sakhalin in discussions with Gazprom for
the development of the northern area beyond the Sakhalin 5 block?
We have not had any discussion with Gazprom on this issue. I know
that TNK-BP has frequent discussions with Gazprom about numerous
projects, and although there might be certain direct discussions
with Gazprom for new projects, they are not specific to Sakhalin.
At my level there has been no involvement of Gazprom to date.
Regarding Sakhalin 3, Mr. Brodsky [General Manager of Sakhalin
Projects] has suggested that the block could potentially be broken
up into 3 different areas. Would this be an attractive option for
BP?
I prefer not to comment on Sakhalin 3. It seems as though it will
come up for a new tender, and if there is an opportunity for us
to look at it, then we will certainly take that seriously. We are
interested in all acreage possibilities in Sakhalin, but we will
just have to wait and see what happens. We have not been in any
discussions with the Ministry or with Rosneft on this issue so far.
What is your preference: pipeline or LNG [Liquid Natural Gas]?
Sakhalin 5 is predominately perceived as a liquids reserve, so
it probably is not going to be a question for us to answer, but
we will see... We always get surprises when we drill wells and if
we have a gas project at the end of this we will make that decision
at that point.
After working in the Caribbean and the North Sea, what is your
impression of the Russian culture?
The differences are fascinating - I have found the Russian people
to be very interesting, engaging, warm and friendly, and this opportunity
has allowed me to develop some very strong friendships. It has certainly
been a pleasure to work in Sakhalin.
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INTERVIEWS : 
Interview
with Mr. Jens Pace,