Gazrom and Total Sign Shtokman Deal
Russia's Gazprom and Total signed an agreement Friday that will give the French company a major role in developing the huge Shtokman gas field.
Contrary to expectations, Total president Christothe de Margerie said the deal will allow Total to book some of the reserves of the field, which is under the Barents Sea and estimated to contain as much as 3.7 trillion cubic meters of gas.
The agreement signed Friday gives Total a 25% stake in an operating company that would be created to plan, finance and build the first stage of the project. A separate company, 100 percent owned by Gazprom, holds the actual license to the field.
Gazprom, which is state-controlled, has said that foreigners would be hired only as contractors for Shtokman, meaning they would have no direct exposure to revenues or ability to book a part of the field's reserves as they would if they had an equity stake.
But on Friday, de Margerie said Total will be able to book 25% of the reserves.
"It's a technicality but, yes, we can book reserves," he told reporters after the signing. "In as far as we are taking risks, and when you take risks you can book reserves."
In announcing the deal Thursday, Miller said one or several foreign partners could get a further 24 percent stake in the operating company. In addition to Total, OAO Gazprom has been in talks with Norway's Statoil and Norsk Hydro, and U.S.-based ConocoPhillips .
Miller said pipeline deliveries from the field would begin in 2013 and that the project would produce its first liquefied natural gas in 2014. The first phase envisages annual production of 23.7 billion cubic meters of gas per year, he said, but it was not immediately clear how production would be split between pipeline gas and LNG.