27 Nov 2009 18:45

Zarubezhneft, Total sign Kharyaga agreement

PARIS. Nov 27 (Interfax) - OJSC Zarubezhneft and France's Total signed an agreement on the Russian company to enter the Khargaya production-sharing agreement (PSA) during Prime Minister Vladimir Putin's visit to Paris on Friday.

Nikolai Brunich, Zarubezhneft's general director, and Total CEO Christophe de Margerie signed the document.

A source familiar with the terms of the agreement told Interfax that Zarubezhneft would join the project from January 1, 2010.

The Russian government approved plans to hand a 20% interest in the Kharyaga project to the state-owned Zarubezhneft in the summer and said it would be left to the companies themselves to decide on the terms for the deal.

Total, the project operator, has a 50% interest in Kharyaga, Norway's StatoilHydro has 40% and Nenets Oil Company has 10%.

The Kharyaga PSA, one of just three such agreements in Russia, was signed in 1995. It gives the state an option on a 20% stake.

The head of Total's Russian representation, Pierre Nergararian, said in February 2009 that Zarubezhneft might receive a 20% stake in the project, with 10% coming from Total and the other 10% from StatoilHydro.

The stake was offered to Lukoil in 2010, but the company decided against entering the project.

The Kharyaga field is producing less than 1 million tonnes, but production is projected to rise to 3.1 million tonnes in 2013.