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Interfax: Putin: proceedings against Total no reason to “panic”

Sep 25 2006 9:03AM

COMPIEGNE, France. Sept 25 (Interfax) – Russian President Vladimir Putin on Saturday confirmed that the Russian government had “grievances” against French oil company Total concerning its operations at a Russian oil field but added, “there is nothing that should cause any panic.”

Putin was speaking to reporters in Compiegne after talks with French President Jacques Chirac and German Chancellor Angela Merkel.

On Friday, Putin told a reporter in Paris before talks with Chirac that “rumors on the withdrawal of the license from the company are greatly exaggerated.”

The Russian Natural Resources Ministry earlier initiated proceedings against Total, claiming a violation of the license agreement by the company during the development of the Kharyaga field, which implies that the company would be fined.

Kharyaga, which lies in the Khanty-Mansi autonomous district, is being developed under a production sharing agreement (PSA), the parties to which are Total, which holds a 50% stake in the project, Norwegian company Hydro (40%), and the Nenets Oil Company (10%).

There are two more projects in Russia based on PSAs.

One of them is Sakhalin 1, whose participants are Exxon Neftegaz Limited, a subsidiary of U.S.-based Exxon Mobil Corporation (30%), Russian oil company Rosneft (20%), India’s ONGC (20%), and Japan’s SODECO (30%).

The other project is Sakhalin 2, where British-Dutch company Royal Dutch Shell holds a 55% stake, and Japan’s Mitsui and Mitsubishi have shares of 25% and 20%, respectively.

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