PRESS: Total to quit hard-recovery oil JV with Russia’s Lukoil

MOSCOW, Jun 25 (PRIME) -- France’s Total, which had left a Shtokman field project with Gazprom, plans to leave a joint venture (JV) with Russian oil major Lukoil for the production of hard-to-recovery oil, business daily Kommersant reported Thursday citing Lukoil CEO Vagit Alekperov.

Lukoil will compensate Total’s spending on licenses for the sites of the Bazhenov oil formation. “We have agreed that we will continue work on our own,” Alekperov told the business daily, adding that Total may return to the project after Western sanctions are lifted.

Jacques de Boisseson, head of Total in Russia, confirmed to business daily that the company wants to restart cooperation with Lukoil as soon as the sanctions are lifted.

In 2014, total purchased three licenses for sites in the Khanty-Mansi Autonomous District and contributed them to the JV with Lukoil, while the latter contributed its Galyanovsky site to the venture. The companies intended to invest U.S. $120–150 million in geological exploration of the field in two years.

The project became a problem for Total in the summer of 2014, after the sanctions were imposed. Sources close to the JV told Kommersant that the Bazhenov formation’s resources are formally not shale, but foreign companies are still prohibited to develop them.

“The sides want to keep the licenses, but only Lukoil may work there, so it is logical that the company will buy them. But the JV may formally continue to exist,” a source told Kommersant.

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