PARIS (AFX) – Francois Rafin, director of TotalFinaElf’s Russian operations, said the company plans to raise its production investments in the country in coming years.
Although Rafin did not provide details of the group’s investment schedule, projects being considered for the next decade could see a significant rise in investments in Russia.
“Of the 9-10 billion Euros invested by the company each year, of which two-thirds are for exploration and production, some US$100 million are invested in Russia” currently, Mr Rafin said in an interview with Agence France-Presse.
“Our goal is to become a producer of hydrocarbons in Russia,” he said, adding that in 2002, TotalFinaElf was the largest buyer of Russian oil and oil products, acquiring some 40 million tonnes or one-fourth of the country’s total exports.
However, he said higher production costs in Russia could limit investments, as profitability would be more sensitive to any declines in oil prices.
TotalFinaElf does not intend to announce a deal as large as the US$6.75 billion investment in Russia announced by British Petroleum last week, Mr Rafin said.
Among the company’s projects in the region, TotalFinaElf has taken a 52% stake in the company operating the Vankor field in Siberia.
“This is an operation that is being finalised. We hope to proceed to the first exploration phase, and if a decision is made to develop the field, it will require 2-3 billion that will be provided with our partners,” he said.
The company is also continuing to explore a partnership with Yukos for exploration of deep offshore areas of the Black Sea, and is participating in the early stages of development of the Stokman natural gas field, where the first phases will need US$10 billion, Mr Rafin said.
“We hope that this (Stokman) partnership will take firm shape with the creation of an industrial company with Gazprom and Rosneft. We hope to be the leader among the international companies in this project,” he said.
TotalFinaElf’s major operation in Russia is the Kharyaga, an average-sized field where output rates reached 12,000 barrels per day in 2002. The company hopes to raise this output to 30,000 barrels per day in 2003.