PARIS (Dow Jones Newswires), May 24, 2010
Total plans to develop the huge Shtokman natural gas field in the Barents Sea remain on track, with a final investment decision expected in 2011, Arnaud Breuillac, the company's senior vice-president for Continental Europe and Central Asia, said in an interview.
"Shtokman is not being further delayed," Breuillac said, dismissing rumors that the project was facing further postponement due to the gas price weakness after lengthy earlier delays.
The consortium holding rights to the field has decided to split its development, with a final decision on the natural gas extraction in March 2011 and a decision on liquefying the gas "around nine months after the natural gas part, by end 2011," Breuillac said.
"There is no disadvantage in developing gas production first and then liquefying it in a second stage," he added
Shtokman, which is one of the world's largest natural gas fields, is being developed by Shtokman Development, a consortium in which Russia's oil and gas major Gazprom owns 51%, StatoilHydro 24% and Total 25%.
Shtokman Development's Chief Executive Yuri Komarov resigned earlier this year and will be replaced by a Gazprom executive. Breuillac declined to give the name of Komarov's successor.
Shtokman's reserves are estimated at around 3,800 billion of cubic meters of natural gas and 37 million tons of gas condensate.Total expects LNG from Shtokman to be produced from 2017, Breuillac said
The existence of unconventional gas won't deter Total from conventional natural gas sources, notably in Russia and Central Asia such as Shtokman, Breuillac said.
"A company like Total needs a balanced portfolio in all its projects and even though one has to weigh up the value of shale gas, this complements our development opportunities in the Commonwealth of Independent States region," Breuillac said.
Total bought a 25% stake in U.S.-based company Chesapeake Energy in early January, which is specialized in shale gas extraction, for $2.25 billion, and is exploring a potential shale gas field near Montelimar, in southern France.
Total's shale gas ventures won't affect the company's focus on big (conventional natural gas) projects, Breuillac said.
The current weakness of natural gas prices and the drop in demand won't have an impact on Total's natural gas investments decisions either, Breuillac said.
As for Turkmenistan, the group is maintaining its efforts to convince the government there to open its on-shore fields to foreign integrated oil and gas companies such as Total.
"This will still take time and our interest is not diminished," Breuillac said, adding that Total and the Turkmen government plan some "studies in common."
Copyright (c) 2010 Dow Jones & Company, Inc.
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