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NOVATEK and Total Get Along
After the French company Total tried to buy a blocking package in the Russian independent natural gas producer NOVATEK in 2004, the companies have reached an agreement on joint production. NOVATEK and Total E&P Activities Petrolieres announced the signing of a protocol on Friday. NOVATEL chairman Mikhail Lozovoi stated that the board of directors of the company and Gazprom, a major shareholder in NOVATEK with 19.9 percent of its stock, have approved the agreement. Another source in the company noted, however, that it is a “framework” agreement and “so far only a declaration of intentions.” The Russian Federal Antimonopoly Service refused to approve the deal with Total in 2004.
NOVATEK offers the French a rapidly-growing resource and production base. It has proved reserves of 651 billion cu. m. in 2006 and a production replacement coefficient of 194 percent between 2004 and 2006. In 2006, its utilization factor was 23 years. Total is experience with difficult geological conditions and unique technology. Gazprom selected it as its partner for the first phase of development of the Stockman project. It is also participating in the development of the Kharyaga under a product-sharing agreement. NOVATEK will gain broader possibilities to work abroad through its association with Total, and Total will receive greater access to the Russian market. NOVATEL began its first project abroad, on the Egyptian continental shelf, only recently.
Total spokesperson Patricia Marie said that working groups of specialists will be formed now to determine the most promising regions in Russia and abroad to work in and other technical questions. The companies are not expected to share existing assets, nor are their joint projects expected to be extensive. NOVATEK stock rose 1.03 percent on MICEX after the announcement of the agreement, and there were no transactions with it on RTS.
www.kommersant.com
All the Article in Russian as of Oct. 22, 2007
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