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Total says Shtokman uneconomic at today's gas prices
By NJ Watson Russia's huge Shtokman gasfield would be uneconomic at today's gas prices, Total's chief executive said yesterday. Speaking to reporters at the WGC, Christophe de Margerie said Gazprom and its partners in the project, Total and Norway's StatoilHydro, have a good idea of how they would develop the field, but have yet to calculate the scheme's probable cost. "That's what we have to do over the next 12 months," he said. Although the final investment decision on the technically complex and costly project would not depend on today's gas price – as the project would take five years to develop – it is "definitely" not economic at $3/m Btu, he said. Shtokman – being developed by a company in which Gazprom holds 51%, Total 25% and StatoilHydro 24% – is estimated to contain 3.8 trillion cubic metres of gas and more than 37m tonnes of condensate. But despite its scale, the Arctic field's remoteness and hostile operating environment have stymied progress. The Russian government is understood to be considering developing other, onshore, gasfields in the gas-rich Yamal peninsula first. And, according to de Margerie, Russia is also keen to involve international oil companies (IOCs) in Yamal; two weeks ago, prime minister Vladimir Putin invited IOCs to the area, which holds some 70% of Russia's known gas reserves. De Margerie added that Putin had told the French major that it would be a good partner for future phases of Shtokman.
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