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#12 - JRL 7059
YUKOS chief says Russian oil underestimated

HOUSTON, Feb 11 (Reuters) - The head of Russia's number two oil producer, YUKOS <YUKO.RTS>, said on Tuesday the country's proven oil and gas reserves were underestimated.

YUKOS Chairman and CEO Mikhail Borisovich Khodorkovsky also said he believed rival Gazprom's <GAZPPE.RTS> virtual monopoly on Russia's natural gas supply -- the world's largest -- would be curtailed, although such efforts would be difficult to achieve.

"This is a very sensitive political question and the government is having a hard time going for it," Khodorkovsky told a Cambridge Energy Research conference here.

Energy giant Gazprom has emerged as the key natural gas exporter to Europe, with supply contracts to 20 countries across the continent. With the construction of new pipelines, Russian gas is expected to reach as far west as Britain in the next few years.

Khodorkovsky said red tape from outdated Russian laws had meant no new definitive estimates of Russian oil reserves had come out in eight years.

Estimates for proven crude oil reserves would likely climb to about 150 billion barrels once new studies were carried out, he said.

"And we expect that (Russia) will have production of 9 (million) to 10 million barrels per day and will keep it at that level for 30 years," he said.

Russia's crude oil and gas condensate output rose in Jan.2003 to 8.07 million bpd from 7.23 million bpd in Jan. 2002.

Natural gas production could reach 600 billion-700 billion cubic meters annually for more than 50 years, he said.

Khodorkovsky's comments came hours after UK oil major BP Plc <BP.L> announced a $6.75 billion deal with Russian partner TNK <NZGZ.RTS> to kick-start its growth prospects.

The deal would increase BP's daily oil and natural gas output by a massive 16 percent and boost its presence in the world's second largest oil exporting country.

The British firm would take a 50 percent stake in an enlarged company made up of Russia's fourth biggest oil company TNK and its affiliate Sidanco, in which BP already holds a 25 percent stake.

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