Total moves $4 billion further into Russia

Total Chairman and Chief Executive Officer Christophe de Margerie and Leonid Mikhelson, Novatek’s Chairman have made an agreement expected to go through in the summer potentially worth $4 billion. The […]

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By Tom Gibson

Total Chairman and Chief Executive Officer Christophe de Margerie and Leonid Mikhelson, Novatek’s Chairman have made an agreement expected to go through in the summer potentially worth $4 billion.

The memorandum of cooperation makes Total the main international partner on the Yamal LNG project with a 20% share and also gives them a 12.08% share in Novatek.

This figure may extend to 19.40% within the next 36 months.

The merger means Total will have access to an equity production of 120,000 barrels per day.

Chairman, Mr Margerie said: “This agreement adds to the close cooperation built with Gazprom since 2007 on the Shotkman project. In becoming the first international investor to participate in the development of the giant gas resources of the Yamal Peninsula.”

Novatek is the largest independent gas producer in Russia and supplies approximately 10% of the domestic market. Its 2010 production reached 37.8 billion cubic meters of gas per year.