16 Jul 2010 12:44

Total interested in joint exploration projects in Russia with Rosneft

MOSCOW. July 16 (Interfax) - French Total is interested in cooperating with Rosneft on exploration projects in Russia, Total CEO Christophe de Margerie said in an interview with the business daily Kommersant published on Friday.

De Margerie said talks on cooperation with Rosneft, in exploration projects and other areas, remain in the initial stages. Total previously negotiated with Rosneft on joint development of the Tuapse trough and Val Shatsky on the Black Sea shelf. Rosneft ultimately selected Chevron as its partner in that project.

Total was unable to find a buyer for its refinery in Dunkerque, France, so the company is offering its Lindsey refinery in Lincolnshire, UK.

De Margerie said the list of contenders to buy that refinery was confidential. But he commented that although Russian companies have expressed interest in Western refineries, in fact they are not so active abroad, except in Iraq.

There are plenty of investment opportunities in Russia, he said, so there is no reason to seek assets abroad. The situation is different in connection with Iraq. Lukoil has been very active there and Total has negotiated on that subject, so far without results, he said.

De Margerie confirmed that Total had made a proposal to acquire a 20%-25% stake in Yamal LNG. He said one other foreign company might join the project, but said that was not a necessary condition for its participation. The project is NOVATEK's and that company will understand whether bringing in a second foreign partner is more beneficial for them; Total's decision will rely first and foremost on the financing issue, he said.

As for the Shtokman project, Total will only be able book reserves under the project when the final investment decision, marking the start of the project, is made.

De Margerie said natural gas prices would remain low in the coming three-four years, after which they will begin to rise because no new projects will have been launched in that time. That is why it makes sense to invest now, since waiting until prices rise will be too late, he said.

The Shtokman participants are trying to make the project as inexpensive as possible, he said. The contractors could put the project in a difficult situation if they submit bids that are not in keeping with forecasts for the gas market in 2016-2017, he said.

Taxes are also a major issue for the project, since the project participants have no control over that, he said.