OilVoice - Total Transfers a 10% Interest in Russia’s Kharyaga Field to Zarubezhneft

Total Transfers a 10% Interest in Russia’s Kharyaga Field to Zarubezhneft

Friday, November 27, 2009

Total E&P Russie, a wholly-owned subsidiary of Total S.A., announces the transfer of a 10% interest in the Kharyaga oil field to state-owned Zarubezhneft of Russia. A memorandum of understanding (MOU) signed in 1999 at the same time as the Kharyaga production sharing agreement (PSA) stipulated that a Russian partner would take a stake in the project.

Total is operator of phases 2 and 3 of the Kharyaga field, which is located in the Nenets Autonomous District. The development of phase 3, which received the go-ahead in December 2007, will increase output to 30,000 barrels per day (b/d), compared to 20,000 b/d in 2008.

“This new collaboration with Zarubezhneft gives an additional boost to Total’s projects in Russia,” said Yves-Louis Darricarrère, President, Total Exploration & Production. “The addition of Zarubezhneft as a partner in the Kharyaga field will further strengthen relations between Russian oil companies and Total.”

Another partner in the field, Norway’s Statoil, is also transfering a 10% interest to Zarubezhneft.

Under the agreement, Total will continue to operate Kharyaga with a 40% interest, along with its partners Statoil (30%), Zarubezhneft (20%) and Nenets Oil Company (10%).

Total Exploration & Production in Russia
Total has been present in Russia since 1989. It holds a 25% interest in the first phase of the Shtokman project, alongside Gazprom (51%) and Statoil (24%). Front-end engineering design (FEED) is being performed prior to a final investment decision in 2010.

In the first phase of development, the field will produce 23.7 billion cubic meters of natural gas annually, of which approximately 50% (7.5 million metric tons per year) could be exported as liquefied natural gas.

In late June 2009, Total announced that it had signed heads of agreement with Novatek to acquire a 49% stake in its wholly-owned subsidiary Terneftegas, with Novatek retaining a 51% interest. The Russian Federal Antitrust Service approved the deal in October 2009.