Our Arctic Neighbors: Russians unhappy with Total in Nenets region

Russian authorities are dissatisfied with the consortium that is developing the Kharyaga oil field in the Nenets Autonomous Okrug — operator Total, StatoilHydro and the Nenets Oil Co. Total announced that there would be no profits from the field this year, according to a release from the Nenets administration April 29.

“The representatives of the Russian side are not happy with the work of French oil company Total, which is the operator of the Kharyaga PSA (Production Sharing Agreement),” Nenets Gov. Igor Fyodorov said. The issue was discussed recently in a meeting at the Russian Energy Ministry, he added. The governor’s office plans to form an inspection team that will conduct monthly monitoring of the volumes of oil produced at Kharyaga. It will also assess operating costs and the work of contractors hired by Total, the release said.

The Russian government is also pushing for a cut in 2009 spending on the Kharyaga project, according to Oilru.com. The Kharyaga consortium has adopted a budget of $403.6 million for this year. The terms of the production sharing agreement stipulate that Russian federal authorities must partly reimburse the field partners’ spending.

Meanwhile, in late April Lukoil-ConocoPhillips joint venture Naryanmarneftegaz and Russian oil company Eurasia Drilling announced that they were laying off 1,000 of their employees in the Nenets region, news agency Regnum reported. Eurasia Drilling is moving its regional headquarters from Nenets to Usinsk in Russia’s Komi Republic.

—Sarah Hurst