Total to exit Russia shale, Arctic deals

Total will withdraw from an agreement with Lukoil to develop challenging oil and gas plays, the Russian company’s CEO has said.

Russian daily Kommersant cited Lukoil’s Vagit Alekperov and head of Total Exploration and Production Russia Jacques de Boisséson as saying the French company may return to the venture after sanctions on Russia are lifted.

In March 2014, the two companies signed a memorandum of understanding to develop Western Siberia’s Bazhenov shale oil fields, with a reported joint investment of $150 million.

The news comes on the heels of an announcement that Total would relinquish its 25-percent stake in the Shtokman natural gas project to operator Gazprom.

The Shtokman gas and condensate field, located offshore Russia in the Barents Sea, is one of the world’s largest undeveloped gasfields, holding an estimated 3.8 tcm of gas.

The project has been suspended since 2013, when Gazprom and Total decided the shelve the development until needed technological advances were in place.

The EU’s sanctions on Russia, imposed in mid-2014 following the Ukraine crisis, stipulate that member states cannot co-operate with Russia on oil and gas development, singling out Arctic and shale projects as verboten.