France’s TotalEnergies has agreed to exit the Kharyaga production sharing agreement in Russia by passing its 20% stake to the project’s operator, state-run Zarubezhneft.
When the transaction has been formally approved by Russian regulatory authorities, Zarubezhneft will hold a 90% shareholding in the project, with locally owned Nenets Oil having the remaining 10% interest.
Zarubezhneft’s interest will also include the 30% stake transferred by Equinor, following the Norwegian company’s decision in May to quit the PSA.
Kharyaga is an onshore field development in northern Russia and one of three production sharing projects in the country.
The two others — Sakhalin 1 and Sakhalin 2 — operate significantly larger offshore oil and gas deposits near Sakhalin Island in Russia’s far east.
Based on the latest available information from the Russian Energy Ministry, Kharyaga produced at a rate of about 32400 barrels per day of crude earlier this year, with the asset being heavily depleted after being in production for more than 20 years.
In early 2016, TotalEnergies agreed transfer operatorship of the development to Zarubezhneft, which had been looking to expand its presence in Russian upstream projects in Russia after having previously focused on assets outside Russia, in particular Vietnam.
In 2015, while the French company was still operator, Kharyaga reported oil production of about 30,4000 bpd.
Earlier this year, TotalEnergies booked a $4.1 billion impairment charge following its decision to withdraw from its holdings in Russia in ersponse to Russia’s invasion of Ukraine.
Most of the charge was related to the company’s investment in the Novatek-led Arctic LNG 2 project, in which it holds a 10% interest.
At present, TotalEnergies still holds a direct shareholding of more than 19% in Russia’s largest independent gas producer, Novatek, and a 49% stake in the Terneftegaz oil producing venture with Novatek.
- Technip Energies and Saipem to exit Russia’s Arctic LNG 2 project
- EU sanctions bite: Chinese yards to halt work on Russian Arctic LNG 2 modules
- 'Very manageable': Pouyanne plays down TotalEnergies' financial exposure to Russia
- Kremlin threatens criminal prosecution to investors dumping Russian subsidiaries
- ExxonMobil joins Western oil and gas company exodus from Russia amid Ukraine crisis