11:03 GMT29 October 2020
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    The French Total S.A. and the Russian Zarubezhneft oil companies have agreed to alter shares of production at Russia's Kharyaga oilfield in favor of Zarubezhneft, a joint press release said Thursday.

    MOSCOW (Sputnik) — Total is set to retain a 20 percent share of production at the oilfield after transferring 20 percent to Zarubezhneft, which will control 40 percent of production and become the field's operator, the statement said. Norway's Statoil will retain 30 percent and the Russian Nenets Oil Company will retain 10 percent of production as part of the production sharing agreement change.

    "The deal is of interest to Zarubezhneft given our existing participation in Kharyaga, a field we know very well. Our strategy focuses on the development of fields with difficult reservoirs… We plan to increase cost efficiency at Kharyaga by leveraging this experience and extracting synergies, thereby creating additional value for the project stakeholders and the Russian Federation," the company's General Director Sergey Kudryashov said in the statement.

    While the deal is financial, Zarubezhneft has not used leverage to expand its share, a company source told RIA Novosti, without specifying the cost.

    Production sharing agreement alterations require government approval, however, reduced foreign shares may not warrant review by the government's Commission on Monitoring Foreign Investment, according to the commission head Armen Khanyan.

    The Kharyaga production sharing agreement aims to develop two objects of the oil field in Russia's northern Nenets Autonomous Area. The geologically complex field produces 1.5 million tons of oil yearly, having raised some $3 billion for the Russian government since operations began in 1999.

    Total, Zarubezhneft
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