Total's Russian Stakes
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OAO Novatek and Total SA have signed a Heads of Agreement establishing the framework for joint cooperation in exploring and developing Novatek's Termokarstovoye gas condensate field. The Agreement was signed by Leonid Mikhelson, Chief Executive Officer of Novatek, and Christophe de Margerie, Chief Executive Officer of Total, during a recent meeting in Moscow.
The Agreement provides for the establishment of a joint venture through the acquisition, by Total, of a 49% participation interest in Terneftegas LLC, a wholly-owned subsidiary of Novatek and holder of the license for geological exploration and production of gas and gas condensate at the Termokarstovoye field. Under the terms and conditions of the Agreement, the joint venture has two years to complete exploration works and prepare a field development plan, with a final investment decision to proceed forward with the Project taken in 2011.
The closing date for the transaction is subject to the final approval obtained from the Federal Anti-Monopoly Service.
According to Novatek's CEO, Leonid Mikhelson, "We welcome Total's participation in the Project. Their technological capabilities will complement our experience developing complex geological assets and facilitate the effective development of the remote Termokarstovoye field."
"Total is very pleased to become Novatek's partner in the Russia arctic region, which presents exciting development and production opportunities," said Christophe de Margerie, Chief Executive Officer of Total. "This agreement with Novatek consolidates the strategy that Total aims to implement in the Russian gas sector."