Total's license to extract oil at its Kharyaga field, its biggest Russian project, will be reviewed Friday by the country's subsoil resources agency as the government tightens pressure on foreign-led projects.
Total's reserves at the field are not backed up by expert assessments, Pyotr Sadovnik, the deputy head of the agency, told reporters Thursday. The French company must prove its reserves "during 2007" rather than at end of this year as previously required, Sadovnik said.
The findings from the review will be sent to the Industry and Energy Ministry, which oversees the country's three production sharing agreements, including Total's, Sadovnik said. The agency can only revoke the license if the government first cancels the PSA.
Total, Shell and ExxonMobil face calls from Russia to cede some of the privileges, such as tax breaks, that they enjoy under production sharing agreements granted in the 1990s when Russia needed foreign capital. The foreign-led ventures have become anomalies in Russia as President Vladimir Putin increases state control over the energy industry.
Putin told French President Jacques Chirac in September that threats to Total's license were "exaggerated."
Kharyaga, with an output of about 22,000 barrels per day, is Total's foothold in the Russian oil and gas industry. Total in October lost a bid to join state-run Gazprom's $20 billion Shtokman gas field and lost a court case to secure 52 percent of state-run Rosneft's $3 billion Vankor oil and gas fields in eastern Siberia.
In 2004, Total failed in a bid to buy 25 percent of Novatek, the country's second-biggest gas producer.
Government officials have criticized production-sharing agreements for benefiting foreign companies at the expense of the Russian state, which shares in the profit only after investors recoup their costs.
Kharyaga's prospects were called into question in September when Natural Resources Ministry official Sergei Fyodorov accused Total of inflating costs at the field and producing too little oil.
MoscowTimes
Total's reserves at the field are not backed up by expert assessments, Pyotr Sadovnik, the deputy head of the agency, told reporters Thursday. The French company must prove its reserves "during 2007" rather than at end of this year as previously required, Sadovnik said.
The findings from the review will be sent to the Industry and Energy Ministry, which oversees the country's three production sharing agreements, including Total's, Sadovnik said. The agency can only revoke the license if the government first cancels the PSA.
Total, Shell and ExxonMobil face calls from Russia to cede some of the privileges, such as tax breaks, that they enjoy under production sharing agreements granted in the 1990s when Russia needed foreign capital. The foreign-led ventures have become anomalies in Russia as President Vladimir Putin increases state control over the energy industry.
Putin told French President Jacques Chirac in September that threats to Total's license were "exaggerated."
Kharyaga, with an output of about 22,000 barrels per day, is Total's foothold in the Russian oil and gas industry. Total in October lost a bid to join state-run Gazprom's $20 billion Shtokman gas field and lost a court case to secure 52 percent of state-run Rosneft's $3 billion Vankor oil and gas fields in eastern Siberia.
In 2004, Total failed in a bid to buy 25 percent of Novatek, the country's second-biggest gas producer.
Government officials have criticized production-sharing agreements for benefiting foreign companies at the expense of the Russian state, which shares in the profit only after investors recoup their costs.
Kharyaga's prospects were called into question in September when Natural Resources Ministry official Sergei Fyodorov accused Total of inflating costs at the field and producing too little oil.
MoscowTimes
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