MOSCOW, Jan. 21 (UPI) -- French energy company Total said it may transfer half of its stake in a Russian operation to a national player, but maintained a strong interest in the region.
Total said it reached an agreement to transfer 20 percent of its stake in a production sharing contract for the Kharyaga operation in Russia to state-controlled oil company Kharyaga. Kharyaga would take a 40 percent stake and serve as the operator, subject to approval from Russian regulators.
The French energy company said the project near the Arctic north of Russia has produced around 110 million barrels of oil and generated $3 billion in revenue for the country since the start of operations in 1999. Average production from the two development regions within the Kharyaga oil field is around 30,000 barrels of oil per day.
Arnaud Breuillac, Total's president of exploration and production, said the transfer to the state-controlled company would allow the French supermajor to stay involved in the region.
"Russia remains a key country for the group," he said in a statement. "This transfer represents a new stage in the life of Kharyaga."
The transfer comes as Russia's export-based oil economy faces pressure from the energy sector downturn. The national currency, the ruble, is devalued against other currencies and the economy as a whole is plagued by low growth and high inflation.
Total described development of Kharyago as "technically challenging" in part because of the complex geology in the northern region of Russia.
"The deal is of interest to Zarubezhneft given our existing participation in Kharyaga, a field we know very well," General Director Sergey Kudryashov said in a statement. "Our strategy focuses on the development of fields with difficult reservoirs."