Total in Siberia shale oil joint venture with Russia's Lukoil

May 23, 2014 12:00 AM

French energy giant Total said that it has signed a deal with Russia's second biggest oil firm Lukoil to explore and develop shale oil deposits in western Siberia.

Total will hold 49 percent and Lukoil 51 percent of the joint venture, which would begin assessing the feasibility of developing the shale oil potential at the Bazhenov area in western Siberia, the French group said in a statement.

It said exploratory drilling will begin 2015 after seismic evaluations are conducted.

The announcement came while the West and Russia are locked in their worst standoff since the Cold War over the crisis in Ukraine.

"Total's entry into the Bazhenov play, one of the world's largest shale oil formations, reinforces our position in non-conventional hydrocarbons where the group has developed significant experience with its numerous projects," said Total's chairman and chief executive Christophe de Margerie.

"Our international expertise leveraged with Lukoil's experience in the region provides a balanced partnership and an excellent basis from which to appraise the huge potential of this Western Siberian play."

The two groups are expected to invest between $120 and 150 million over two years during the exploration phase, Lukoil chief executive Vaguit Alekperov was quoted as saying.

Russia is believed to hold the world's biggest reserves of shale oil in east Siberia.

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