Russia may allow TNK-BP to keep its licence for the lucrative Kovykta gas field should the company agree to develop the project with state-run Gazprom, a government minister said.
Natural Resources Minister Yuri Trutnev said he wanted to avoid revoking the licence from TNK-BP as such a move would send a negative signal to investors in the Russian resource sector.
"Revoking the licence would cause the company to lose significant investments and, as a result, a deterioration in the investment climate," Trutnev said in the Norwegian capital Oslo.
"We are trying to do everything possible to resolve the situation without revoking the licence."
A decade-old dispute over Kovykta, an eastern Siberian field with enough gas to meet world demand for eight months, has raised concerns among investors wary of the Kremlin's track record of expropriating assets from private business.
Russian officials have long argued that TNK-BP be stripped of Kovykta for failing to meet its licence terms. Environmental watchdog RosPrirodNadzor threw its weight behind this argument with a February ruling on the case.
Trutnev himself said last week that Russian legislation demands the licence be withdrawn, while also acknowledging the negative effect such a decision would have on the investment climate in Russia.
TNK-BP, half-owned by BP, says it cannot bring output to levels stipulated by its licence because Gazprom holds a monopoly on Russian gas exports, effectively closing the Chinese market to Kovykta's 2 trillion cubic metres of reserves.
TNK-BP agreed in 2007 to sell Kovykta to Gazprom for about $1 billion but the deal collapsed due to disagreements over the price.
With its huge reserves, Kovykta falls into the category of strategic field, meaning Gazprom could theoretically acquire it without competition were the licence to be stripped from TNK-BP.
But Russia's foremost energy official, Deputy Prime Minister Igor Sechin, said in March that TNK-BP should be compensated for costs incurred developing Kovykta and that there would be no "blatant expropriation" of the asset.
An end to the stalemate seemed closer when Viktor Vekselberg, one of four Russia-connected billionaires who control the other 50 percent of TNK-BP, said the company had agreed to sell Kovykta to state holding company Rosneftegaz.
The sale, at a price of between $700 million and $900 million, was due to be completed by the end of 2010, Vekselberg said. Rosneftegaz holds stakes in Gazprom and oil sector leader Rosneft.
Trutnev said it was in Russia's interest to start production at Kovykta, which still needs billions of dollars of investment to reach peak production. The minister said an agreement between TNK-BP and Gazprom would be a way to resolve the situation.
"From the beginning, there were discussions about joint development of the project with Gazprom," he said. "We are not getting involved in negotiations between the companies but we consider this to be a way out.
"It's important to us that this deposit is developed."