France's Total in shale deal with Russia's Lukoil

Published on NewsOK Modified: May 23, 2014 at 8:28 am •  Published: May 23, 2014
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PARIS (AP) — French energy company Total SA is hooking up with Russia's largest private oil company to explore and develop a huge Siberian shale oil field, despite Western sanctions and anger over the Kremlin's role in Ukraine's crisis.

The deal signed Friday with Russia's Lukoil draws new attention to French economic ties with Russia, and the French government's reluctance to punish Moscow too heavily.

Total says in a statement that the two will set up a joint venture to develop the Bazhenov oil formation in western Siberia, believed to hold some of the world's largest shale oil deposits. It says Lukoil will have 51 percent of the venture and Total 49 percent.

The statement gives no value for the deal, which had been under negotiation for months. The ITAR-Tass news agency quotes Lukoil CEO Vagit Alekperov as saying the companies will invest $120 million to $150 million.

The deal highlights a divide within Europe over how to handle Russia. France and other European countries with big Russian trade and energy connections have been cautious, while Britain, the United States and Poland have toed a tougher line.