Russia's Gazprom and Norway's StatoilHydro ASA signed an agreement regarding Phase 1 of development for the Shtokman gas and condensate field, located near the Barents Sea.

StatoilHydro will receive a 24% stake in a special purpose company established for designing, financing, constructing and operating the facilities provided for Phase 1. France's Total SA has a 25% stake, while Gazprom will retain 51%. Phase 1 stipulates production of 23.7 billion cubic meters of natural gas per year, with the first shipments of gas going out in 2013 — around the time Russia is expected to run into supply problems. Shtokman's reserves are estimated at 3.7 trillion cubic meters of gas. Sevmorneftegaz, a subsidiary of Gazprom, holds the license to search for, explore and produce gas and gas condensate in the Shtokman field.

On Oct. 1, the oil and gas division of Norsk Hydro ASA and Statoil merged, giving the government a 62.5% stake, with the rest trading on the Oslo Stock Exchange. — Baz Hiralal

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