Registration document 2007 - Total.com
Registration document 2007 - Total.com
Registration document 2007 - Total.com
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2<br />
Commonwealth of Independent States (CIS)<br />
TOTAL’s production for 2006 was 8 kboe/d, accounting for<br />
0.3% of the Group’s overall production. Production in 2004<br />
and 2005 came entirely from Russia and amounted to<br />
9 kboe/d for each year. Highlights for 2006 included the<br />
start-up of the Shah Deniz project in Azerbaijan.<br />
Azerbaijan<br />
TOTAL’s presence in Azerbaijan dates back to 1996 and is<br />
centered on the Shah Deniz field (10%). After phase 1 of<br />
development of this gas and condensate field was launched in<br />
2003, production from the first well began in December 2006.<br />
The first gas sales to Azerbaijan were made late in 2006.<br />
The South Caucasus Pipeline Company (SCPC), in which TOTAL<br />
holds a 10% interest, <strong>com</strong>pleted the construction of a gas<br />
pipeline to transport gas from Shah Deniz to the Turkish and<br />
Georgian markets. This gas pipeline was gradually brought<br />
onstream and became operational in November 2006.<br />
Construction of the 1,770 km BTC (Baku-Tbilissi-Ceyhan) oil<br />
pipeline, with an operating capacity of 1 Mb/d, began in August<br />
2002 and was <strong>com</strong>pleted in 2006. This pipeline, owned by BTC<br />
Co. (in which TOTAL has a 5% interest), links Baku to the<br />
Mediterranean Sea. The first delivery to Ceyhan (Turkey) was<br />
made in June 2006.<br />
Kazakhstan<br />
TOTAL has been present in Kazakhstan since 1992, where it is a<br />
partner on the North Caspian Sea permit which contains the<br />
Kashagan field. TOTAL holds an 18.52% interest in this permit<br />
after closing the sale of 1.85% to KazMunayGas, the stateowned<br />
<strong>com</strong>pany of the Republic of Kazakhstan, in April 2005.<br />
The Kazakh authorities approved the development plan for this<br />
field in February 2004, allowing work to be done on the first of<br />
several successive phases of development. Infrastructure and<br />
civil engineering work has accelerated and most of the major<br />
contracts regarding the manufacture and construction of both<br />
onshore and offshore facilities have been awarded. The facilities<br />
are currently being evaluated to optimize their dependability while<br />
improving safety. Drilling of development wells was launched in<br />
2004 and continued in 2005 and 2006, with production now<br />
scheduled to begin near the end of 2010. The size of the<br />
Kashagan field may eventually allow production to be increased<br />
to more than 1 Mb/d (in 100%).<br />
The North Caspian permit includes other structures that are<br />
smaller than Kashagan: Aktote, Kairan, Kalamkas and Kashagan<br />
Southwest. These structures are in the appraisal phase. The first<br />
appraisal well on the Aktote structure, drilled in 2004, confirmed<br />
and helped to define this discovery. Appraisal operations<br />
continued in 2005, with the <strong>com</strong>pletion of a 3D seismic<br />
acquisition on the Aktote and Kairan zones as well as the drilling<br />
of the Kalamkas 2 well. In 2006, two new appraisal wells were<br />
drilled on Kalamkas and Kairan. The Kalamkas-3 well was<br />
positive and the results for the Kairan 2 well are being evaluated.<br />
30<br />
Business overview<br />
Upstream - Exploration & Production<br />
TOTAL – <strong>Registration</strong> Document 2006<br />
A long-duration test is expected to start on Kairan 2 during the<br />
first half <strong>2007</strong>.<br />
Russia<br />
TOTAL has been present in Russia since 1989. The Group’s<br />
principal activity is on the Kharyaga field (50%, operator) in the<br />
Nenets territory. The Group’s production was 8 kboe/d in 2006,<br />
<strong>com</strong>pared to 9 kboe/d in 2005 and 2004.<br />
On the Kharyaga field, phase 2 of development was <strong>com</strong>pleted<br />
in 2005, targeting a production plateau of 30 kboe/d (in 100%).<br />
Pre-project studies for phase 3 were carried out in 2006. Late in<br />
2005, TOTAL and the Russian Federation reached an amicable<br />
agreement to resolve a dispute over the interpretation of the<br />
production sharing agreement. As a result, the request for<br />
arbitration in Stockholm was withdrawn. In 2006, the production<br />
sharing contract was implemented normally, with profit oil being<br />
shared among the state and investors.<br />
The preliminary technical results from the Russian Black Sea<br />
partnership led the Group to withdraw from the Shatsky permit in<br />
2004 and the Tuapse permit in 2005.<br />
In 2004, the Group entered into negotiations to acquire 25% of<br />
Novatek, the country’s second leading gas producer. The<br />
transaction was not <strong>com</strong>pleted as the required approval from the<br />
authorities was not obtained. In 2005, TOTAL was pre-selected<br />
by Gazprom, along with four other foreign <strong>com</strong>panies, to<br />
potentially participate in the giant Shtokman gas production<br />
project in the Barents Sea. In October 2006, Gazprom<br />
announced that the project would not proceed under the<br />
proposed contractual framework, since the Russian Federation<br />
no longer wished to share acreage with independent oil<br />
<strong>com</strong>panies. Other contractual arrangements are being studied for<br />
this project.