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Shtokman remains unsettled

The Shtokman field in the Barents Sea is the world's largest offshore natural gas field.

The Shtokman partners once again postpone the final investment decision.

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The three Shtokman partners - Gazprom, Total and Statoil, are not ready to place their money in the development of the huge Shtokman project in the Barents Sea. In Thursday’s meeting in the Shtokman Development AG board of directors, the three companies decided to postpone the final investment decision, the deal regulating key financial aspects of the project.

According to a press release from the SDAG, the three companies agree to “prolong the framework agreement until 1 July”.

The postponement is one of several over the last years. In late December 2011, the company announced that the decision would be postponed until March 2012.

Read also: Another Shtokman delay in the pipeline

The postponements make it increasingly difficult for the company to meet its objective to start production in 2016.

The three Shtokman partners have all underlined that more beneficial tax conditions are needed for a successful lauch of the project. Although a new tax regime for offshore Arctic projects have been announced by federal authorities, no promises have yet been made for the Shtokman project.

Read also: No tax breaks yet for Shtokman

In yesterday’s meeting, the SDAG decided to step up its dialogue with Russian authorities. If that dialogue results in a deal on tax breaks, the project partners will move a big step closer to project launch.