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Moscow halts Shell's Sakhalin oil and gas project

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Moscow halts Shell's Sakhalin oil and gas project

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As the Kremlin tightens its control over Russia’s energy industry, the country’s Resources Ministry has cancelled the ecological approvals it previously gave for Royal Dutch Shell’s huge oil and gas project on the Pacific Sakhalin islands saying there were granted illegally.

Some analysts believe this could be part of an attempt by Moscow to get a stake in the project on better terms. State-run Gazprom has been trying to move in on the Shell-led operation, which is the biggest foreign investment in Russia. Sakhalin is one of Russia’s richest petroleum provinces, with as much oil and gas as the North Sea.

Shell’s venture is the most advanced. Reportedly ministry may also revoke operating permits for Exxon Mobil of the US and France’s Total. Back in May, the Natural Resources Ministry urged Shell, Exxon and Total to cede more control of their ventures to Russian companies.