News // Economy
Total to take its final investment decision on Caspian Absheron by the end of 2017
23 February 2017 , 18:00Neftegaz.RU604
Total is to take its final investment decision on development of the Absheron gas field, in the Azeri sector of the Caspian Sea, by the end of this year, the French company's senior vice president for Europe and central Asia, Michael Borrell, told on February 22, 2017.
The 1st development well will be drilled at the end of 2017, he said.
Production would be about 150mn ft³/day, or about 1.5bn m³/yr, for delivery to the local market, although the 350bn m³ field is capable of producing more. There is also condensate.
While Total has held discussions with the government about allowing exports, these have not produced a result, Borrell told, so the company is focusing on the $1 bln 1st phase only.
Reflecting the difficult geology of the Caspian, the 1st well drilled into the reservoir in the 1990s found nothing commercial and the operator Chevron relinquished it.
Under a new production-sharing agreement in 2009, Total drilled a 2nd well, 5 km away and the other side of a fault, and that was successful, he told delegates.
Subject to a FID this year on Absheron, first gas could be produced as early as 2019, said Borrell.
He also spoke about the 16.6mn mt/yr Yamal LNG, in which it is a 20% direct stake holder and a 12% stakeholder through its 20% stake in Novatek.
When the Russian company was hit by sanctions the project depended on Chinese and Russian lenders for financing.
The 1st cargo is to load in the 2nd half of this year, and the 2nd and 3rd trains will come on stream in succeeding years.
The 1st tanker in the dedicated fleet, named Christophe de Margerie after the former Russophile CEO of Total, is undergoing ice testing now and can go at 18.5 knots through water and 5.5 knots through ice, he said.
The cargoes will mainly go to Asia but in winter they will go Zeebrugge either for offloading into a storage tank or directly on to standard, cheaper tankers.
He said that the project had higher transportation costs than other projects but it was still profitable.
Total is not directly involved in the other LNG project in Yamal, called Arctic LNG, which is also operated by Novatek but which will use different gas reservoirs and has yet to take any investment decision.
Novatek is working on ways to lower the engineering costs, such as using a gravity base system, rather than sinking the thousands of heat-insulated piles that support the Yamal LNG project.
Borrell told that Total was focusing on Yamal LNG 1st, and waiting to get that going, before thinking about Arctic LNG.
Novatek finance chief Mark Gyetvay said last month in Vienna his company hopes to take final investment decision this year on the Arctic LNG project.
Borrell told that while sanctions had also frozen its Bazhenov shale oil production project, the company intended to stay and invest in Russia, and discounted the implications of the sale of its stake in Kharyaga.
It just made more sense to have Zarubezhneft operating it, he said.
10:11 17.10.2017Novatek, Eni and Total submit bids for 1st Lebanese license round
15:29 16.10.2017Japan plans $10 billion investment in Asian LNG sector
18:00 10.10.2017Indian PM Modi thanks Putin for Rosneft's $12.9 billion investment
17:50 09.10.2017Guinea: Total reinforces its exploration in West Africa
13:25 05.10.2017Iran and Russia signed 2 oil contracts
12:57 27.09.2017Caspian Offshore Construction LLP: Kazakhstan Quality Guarantee