The French Total will withdraw from a joint venture with LUKOIL to develop areas with hard-to-recover oil. Earlier it became known about the company’s withdrawal from the project to develop the Shtokman field.

Head of LUKOIL Vagit Alekperov (Photo: Ekaterina Kuzmina / RBC)

Total’s withdrawal from projects to develop areas with hard-to-extract oil, Kommersant reports citing the head of LUKOIL, Vagit Alekperov. According to him, the Russian company will compensate Total for the costs of acquiring three licenses for areas with difficult-to-recover oil from the Bazhenov formation.

Alekperov and the head of Total in Russia, Jacques de Boisseson, noted that Total will be able to return to the project after the sanctions are lifted.

Licenses for the development of three blocks (Tashinsky, East Kovensky and Lyaminsky) in the Khanty-Mansiysk Autonomous Okrug were acquired by Total in the first half of 2014, even before the introduction of European sanctions against Russia. LUKOIL and Total were going to invest $120–150 million in the project over two years.

According to the publication’s source close to the joint venture between LUKOIL and Total, formally the resources of the Bazhenov formation are not shale (that is, the project was not formally subject to sanctions), but “foreigners are still prohibited from working there.”

Earlier, Vedomosti reported that Total would transfer to Gazprom 25% in the Shtockman Development AG company, which is developing the Shtokman gas condensate field, located in the center of the shelf zone of the Russian sector of the Barents Sea. In terms of proven natural gas reserves, this field is today one of the largest in the world. Its reserves in the C1+C2 category are about 3.8 trillion cubic meters. m of natural gas and about 37 million tons of gas condensate.

Total will give LUKOIL a share in the project for the production of tight oil