Total Doesn't Work on Proper Way in Russia

Russia?s Natural Resources Ministry said on Thursday, that it was unsatisfied by the progres of work of French oil major Total, which operates the Kharyaginsk oil and gas field in country?s Nenets region.

Total operates sites II and III at the deposit in the Siberian Yamal-Nenets autonomous region in northwest Siberia through its Russian arm, Total Razvedka Razrabotka Russia.

?There remain substantial discrepancies between the underlying project documents for developing the Kharyaginsk deposit, and the actual activities of Total Razvedka Razrabotka Russia,? the ministry said, quoted by RIA Novosti.

Natural Resource Ministry officials say that Total is producing oil at an efficiency level of under 70 percent, causing a shortfall of 20-30 percent against the program agreed with state oil-pipeline company Transneft for crude transit. The French company also plans to burn off 70 percnet of the excess natural gas from the field, instead of pumping it back into the deposit or finding an alternative use for it, which will cause substantial pollution, the ministry said.

A production sharing agreement on the Kharyaginsk deposit between the Russian government, the local administration, and Total?s Russian arm, was signed in 1995, and came into force on January 1, 1999, for a term of 20 years. Project participants are Total (50 percent), Norwegian company Hydro (40 percent), and Russia?s Nenets Oil Company (10 percent). So far the project has received investment of $450 million, with another $800 million expected for the next phase.