Total hopes to receive funds from the Gulf

Paris: Total hopes that funds from countries in which Total is active, in particular Gulf countries, will invest in the French oil major, Total chief executive Christophe de Margerie said yesterday.

"We have a strategy to diversify our shareholder base," de Margerie told reporters on the sidelines of an oil conference.

"We would like funds to come from countries where we have long-term relationships. This is why, besides China, we would like to have equivalent partnerships coming from certain Gulf countries."

Total said last week that a state-owned Chinese investment fund has been buying shares in Total in recent months.

De Margerie declined to name the fund but said the stake amounted to around 1.3 per cent, adding Total was "happy" with the move.

Boost

Total said the Chinese investment will help streng-then its presence in the country.

de Margerie described the move as a 'win-win situation'. French business daily Les Echos identified the investor as state fund SAFE, without saying where it got the information.

In comments to journalists during the International Oil Summit in Paris, de Margerie said Total "knows well" the fund, whose participation the French company would like to limit to around three per cent.

"We want to develop our activities in this country. All that helps strengthen our relations in the corporate or business field goes in the right direction." While he disapproves of China's handling of Tibet, de Margerie was quoted as saying by the daily Liberation in an interview published yesterday that the entire country, not just its leaders, suffers from the protests.

In separate comments to the oil summit in Paris, he said it is 'urgent' for policy makers to address increasing demands for oil with restricted supply. "Elasticity might be a problem in the West, but definitely in the East where they have not had access to energy before," he said.

"When we will have to face this problem of not sufficient energy and demand I don't know," he said. But without new policy measures "it will certainly not be in the long term."

His comments were echoed by Malcolm Brinded, head of exploration and production at Royal Dutch Shell.

Challenge

"Meeting the demand challenge is a challenge," he said.

Oil prices steadied near $111 a barrel yesterday after jumping to a new record in the previous session on an unexpected drop in US crude inventories.

With gasoline supplies shrinking and the northern hemisphere summer approaching - when demand, while weaker than last year, will be stronger than it is now - consumers may have to wait until later in the year for price relief.

The decline in crude stockpiles pushed light, sweet crude for May delivery up $2.37 to settle at a record $110.87 a barrel on the New York Mercantile Exchange on Wednesday.

It rose as high as $112.21 a barrel during the floor session, surpassing the previous trading record of $111.80 set last month.

Service contract: Iraq deals almost ready

Total's discussions for a contract in Iraq's energy sector are being finalised, the head of the oil major said yesterday.

"I know discussions are being finalised, but I don't have a date for an announcement. This is up to the Iraqi authorities," Total chief executive Christophe de Margerie said on the sidelines of an oil summit in Paris.

"These are contract services. This is necessarily a transitory stage, not a proper way to work over the long term," he said, confirming Total was negotiating for the development of the West Qurna field along with US group Chevron.

Earlier this month, an Iraqi government adviser said Baghdad would pay as much as $2.5 billion to five oil companies to increase the country's oil output by nearly a quarter. BP, Royal Dutch Shell and ExxonMobil are also said to be close to signing two-year technical support contracts, which will give international companies a head start in their efforts to bid for future oil contracts.