Total, the fifth largest international integrated oil and gas company, and IDT Corporation have announced that Total will acquire a 50% stake in IDT's American Shale Oil, LLC (AMSO) subsidiary.
Under the terms of the agreement, Total and IDT will jointly develop a research and demonstration program to produce and commercialize shale oil utilizing a new in-situ technology on AMSO's federal leasehold in western Colorado. Total will provide a majority of the funding during the research, development and demonstration (RD&D) phase of the project, and technical assistance throughout the life of the project. AMSO will continue to manage operations during the RD&D phase of the project. Total will assume management responsibilities during the subsequent commercial phase. The transaction is subject to customary closing conditions and is expected to close during the first quarter of this year.
AMSO is one of three holders of 10-year leases granted by the U.S. Bureau of Land Management to assess, test and demonstrate the potential for commercial shale oil production in western Colorado. Once AMSO has demonstrated that its technology is economically viable and environmentally acceptable, it will have the opportunity to expand its lease to 5,120 acres for commercial development. The rights covered by the commercial preference lease are estimated to contain multi billion barrels of recoverable shale oil.
"Our investment in AMSO furthers our commitment to developing unconventional hydrocarbons," said Yves-Louis Darricarrere, Total's E&P President. "Given the magnitude of oil shale resources we believe that this project has an important long-term potential for global energy markets. AMSO has a strongly skilled technical team, as well as interesting original ideas. We look forward to working with them to develop sustainable and environmentally responsible extraction and processing technologies."
"We are extremely pleased to partner with Total, one of the largest and most technologically sophisticated oil and gas companies in the world," said Howard Jonas, IDT's Chairman and AMSO's Chairman and CEO. "Total complements our team's technical capabilities with unparalleled expertise and depth in a variety of petroleum research and production disciplines. We particularly value their dedication to finding an approach to oil shale production that respects the unique environment of western Colorado."
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