MOSCOW, June 23 - French oil major Total (TOTF.PA) might be heading for another landmark deal in Russia as its head prepares to meet Prime Minister Vladimir Putin on Wednesday, along with the chief of Russian gas firm Novatek (NVTK.MM)
"They will discuss forms of cooperation in the Russian market," Putin's spokesman Dmitry Peskov told Reuters. He declined further comment.
The meeting comes just days after Total -- already a partner of Russia's gas export monopoly Gazprom (GAZP.MM) in a $25 billion Barents Sea Shtokman gas project -- hailed a new era in relations with Russian firms following a deal with oil major LUKOIL (LKOH.MM).
Total sold LUKOIL a stake in a Dutch refinery effectively blocking a bid by the largest U.S. refiner, Valero (VLO.N), to enter the region. [ID:nLJ579651]
Analyst say meetings between Putin and heads of big companies are very often a precursor to big deals.
"When such meetings come it means a major deal might be announced either in Russia or abroad," said Oleg Maximov, an oil analyst at Troika Dialog brokerage.
"Sentiment-wise it will be of course positive, because if we are talking about Total being involved in Novatek's field development it would reduce operational, financial and corporate governance risks," he said.
LONG HISTORY
Novatek has a bumpy history of dealings with Russian authorities, but relations have improved dramatically since Total was chosen as partner for the coveted Shtokman, one of the world's largest gas fields, located in the stormy Barents Sea.
"They are simply willing more than the others to cooperate with Russia and the Russian authorities," said Maximov explaining the reasons for Total's success in Russia relative to other global majors.
Novatek and Total have been seeking to team up on projects since signing a cooperation agreement in May 2007.
Total even sought to buy a stake in Novatek, Russia's largest independent gas firm, but instead Novatek's founding shareholders, a group of Russian businessmen, sold a 19 percent stake to Gazprom, the world's largest gas producer.
The stake of the founding shareholders was further reduced last month when they sold 18 percent to Russian businessman Gennady Timchenko, the co-founder of the world's third-largest oil trading firm, Gunvor.
Timchenko in turn sold to Novatek a major gas field in Russia's Arctic -- South Tambei -- with reserves of 1.3 trillion cubic metres or the equivalent of 45 percent of annual global gas consumption.
Sources close to the talks said the field, only three times smaller than Shtokman, could be discussed or even become the subject of a deal on Wednesday.
In February, one of Novatek's founding shareholders, Chief Executive Leonid Mikhelson, told Reuters Novatek was in talks with Total on two possible projects. [ID:nL9188283]
Mikhelson, who will meet Putin on Wednesday alongside Total's Christophe de Margerie, said Novatek could also join one of Total's projects abroad.
Total's exploration and production chief, Yves-Louis Darricarrere, said in May Total would be willing to take new opportunities in Russia.
"They will discuss forms of cooperation in the Russian market," Putin's spokesman Dmitry Peskov told Reuters. He declined further comment.
The meeting comes just days after Total -- already a partner of Russia's gas export monopoly Gazprom (GAZP.MM) in a $25 billion Barents Sea Shtokman gas project -- hailed a new era in relations with Russian firms following a deal with oil major LUKOIL (LKOH.MM).
Total sold LUKOIL a stake in a Dutch refinery effectively blocking a bid by the largest U.S. refiner, Valero (VLO.N), to enter the region. [ID:nLJ579651]
Analyst say meetings between Putin and heads of big companies are very often a precursor to big deals.
"When such meetings come it means a major deal might be announced either in Russia or abroad," said Oleg Maximov, an oil analyst at Troika Dialog brokerage.
"Sentiment-wise it will be of course positive, because if we are talking about Total being involved in Novatek's field development it would reduce operational, financial and corporate governance risks," he said.
LONG HISTORY
Novatek has a bumpy history of dealings with Russian authorities, but relations have improved dramatically since Total was chosen as partner for the coveted Shtokman, one of the world's largest gas fields, located in the stormy Barents Sea.
"They are simply willing more than the others to cooperate with Russia and the Russian authorities," said Maximov explaining the reasons for Total's success in Russia relative to other global majors.
Novatek and Total have been seeking to team up on projects since signing a cooperation agreement in May 2007.
Total even sought to buy a stake in Novatek, Russia's largest independent gas firm, but instead Novatek's founding shareholders, a group of Russian businessmen, sold a 19 percent stake to Gazprom, the world's largest gas producer.
The stake of the founding shareholders was further reduced last month when they sold 18 percent to Russian businessman Gennady Timchenko, the co-founder of the world's third-largest oil trading firm, Gunvor.
Timchenko in turn sold to Novatek a major gas field in Russia's Arctic -- South Tambei -- with reserves of 1.3 trillion cubic metres or the equivalent of 45 percent of annual global gas consumption.
Sources close to the talks said the field, only three times smaller than Shtokman, could be discussed or even become the subject of a deal on Wednesday.
In February, one of Novatek's founding shareholders, Chief Executive Leonid Mikhelson, told Reuters Novatek was in talks with Total on two possible projects. [ID:nL9188283]
Mikhelson, who will meet Putin on Wednesday alongside Total's Christophe de Margerie, said Novatek could also join one of Total's projects abroad.
Total's exploration and production chief, Yves-Louis Darricarrere, said in May Total would be willing to take new opportunities in Russia.
