FT: Sanctions scupper Total/Lukoil venture

France’s Total on Monday said its joint venture with Russia’s Lukoil, to explore shale oil in western Siberia, had ground to a halt as a result of western sanctions.

The comments by , Total’s chief executive, are the clearest sign that the latest round of sanctions against Russia over Ukraine will put a brake on the Kremlin’s plans to develop the country’s shale oil resources – which had been envisaged as a key driver of new production in the next five to 10 years. “The Lukoil joint venture is definitely stopped,” said Mr de Margerie. “But it hadn’t started so it doesn’t have any impact [on Total].”

The latest set of sanctions announced two weeks ago by the US and EU restrict western financing and technology to various Russian energy projects, including shale. Russia’s shale reserves are enormous, estimated by the US Department of Energy at 75bn barrels.

Total is also developing the $27bn Yamal liquefied natural gas project with Russian natural gas producer Novatek, and China’s CNPC.
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