Total Increases Share in Novatek

Total SA has today increased its stake in Novatek by 2 per cent to 14.09 per cent, at a cost of $800 million. 

The French major has plans to raise its stake in the independent Russian gas company to 19.4 percent within three years.  Total first bought into Novatek in March, paying $4 billion and valuing the company at around $40 billion.

The acquisition bolsters Total's Russian portfolio which includes stakes in the Shtokman field, the Kharyaga field located in the Nenets Autonomous Region, the Khvalynskoye gas and condensates field and a stake in the Yamal LNG project with Novatek.

Novatek, the biggest Russian competitor to state owned Gazprom, supplies approximately 13 per cent of Russia's domestic gas.

Speaking today in London, Chairman of Novatek's management committee, Leonid Mikhelson, said that the company was in talks to acquire up to four partners to handle marketing and plans to double its annual gas output by 2020,

"We need a partner who brings marketing capacities to (sell) our gas to customers and under current negotiations there could be four partners," he said.

Novatek produced a total of 38.6 billion cubic metres of gas in the first nine months of this year, an increase of 45 per cent on the first nine months of 2010.

It said it expected its annual gas production to almost double from its current level of 53 billion cubic meters to over 110 bcm in 2020.

Mikhelson said that Novatek would also be prepared to consider an offer by Qatargas, which earlier this week said it was interested in taking a stake in Novatek's Yamal LNG project.

"We are ready to dispose of a 29 percent stake in Yamal and have been in discussions with the Qataris and would be ready to consider an offer."

Mikhelson said that the company was not only looking for partners to invest into Novatek but also itself looking to buy stakes outside Russia.

"Because of the Yamal LNG project we are also looking at investments outside Russia on the marketing side."