Total Expects to Keep Same Shtokman Stake

ST. PETERSBURG, Russia - Total SA expects to retain its 25% stake in the Russian Shtokman project once the partners, including state-owned company OAO Gazprom, renegotiate its original terms, said Total's Chief Executive Christophe de Margerie.

When asked whether Total would keep its stake in the project, Mr. de Margerie said: "As far as I know yes, As far as I want, yes."

Gazprom Vice Chairman Alexander Medvedev surprised Total and Statoil earlier this month by saying his company was considering finding new partners for the venture.

The complexity of Shtokman and the emergence of the U.S. as a potential gas exporter has prompted many analysts to question the financial viability of the development, fueling rumors that the whole project is now endangered.

Despite reports that the final investment decision would be announced at the St. Petersburg International Economic Forum, Mr. de Margerie said, "we have no obligation to sign it today, we have until the end of the month." He added the decision should come by the end of this month.

Fresh talks on how the long-delayed Shtokman field should be developed are needed because the economics of the project have shifted in recent years. A gas glut has pushed prices down and what was once an attractive proposal to ship some gas abroad in liquefied form and pipe the rest to local consumers is now far more expensive, analysts have said.

"In the beginning it was 50/50 piped gas and LNG, now it's 100% LNG," said de Margerie.

One of the largest gas fields in the world, Shtokman is located in an extremely challenging Arctic environment in Russia's Barents sea. The field was discovered more than 20 years ago, but the tremendous technical and cost challenges mean that no project to tap the resources have ever been realized.


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