Are you sure?

Russia to transfer stake in Total's oil unit to state

The Russian government plans to transfer a stake in an oil project led by Total SA to a state-owned company, said OAO Lukoil, which had planned to join the exploration venture.

Total and its partners, including Norway\'s Norsk Hydro ASA, are developing the Kharyaga oil field in the Timan-Pechora province in northern Russia. The Nenets regional administration and Nenets Oil Co. sent the Energy Ministry a request to give 20% of Kharyaga to a Russian company, a ministry spokesman, Yevgeny Trufanov, said yesterday by phone. „The right will be given to Russian state-owned companies,” Gennady Krasovsky, the head of Lukoil investor relations, said yesterday in London in a meeting with reporters. He didn\'t specify the companies. Lukoil plans to compete with Russia\'s state-owned OAO Gazprom and Rosneft for fields in eastern Siberia and the Timan-Pechora province, Krasovsky said. Russia is increasing control over projects with foreign investors to control prices and costs.

Gazprom last year agreed to buy a 50% stake in Royal Dutch Shell Plc-led Sakhalin-2 project in the Far East, the largest foreign investment in Russia. OAO Zarubezhneft, a Russian state-owned oil producer, may get the stake in the Kharyaga project, Kommersant newspaper reported this week. Russian companies have an option to buy 20% of the project, Sergei Mingareyev, Total\'s Moscow-based director for government affairs, said on June 2. Kharyaga, based in the Nenets region, is Total\'s largest project in Russia where the French company holds 50%. Norsk Hydro owns 40% of the project and Nenets Oil Co. 10%. Kharyaga is pumping about 22,000 barrels oil a day. The Russian government has criticized Total for violations in the field development. The partners\' license to extract oil at Kharyaga will be reviewed in late February as the authorities consider whether the permit should be revoked. (Bloomberg)