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Gazprom reported to get stake in Sakhalin-2


Gazprom reported to get stake in Sakhalin-2


Royal Dutch Shell has reportedly agreed to give up control of its Sakhalin-2 project to Russian state gas monopoly Gazprom. This follows months of pressure from Moscow which has accused Shell of ecological violations.

The chief executives of both companies met last Friday and Reuters quotes industry sources as saying that Shell has agreed to cut its 55% to a blocking share of at least a quarter.

Sakhalin-2 is Russia’s biggest single foreign investment and the only one entirely in foreign hands.

The new ownership of the vast oil and gas project would consist of Gazprom, Shell and the Japanese companies Mitsui and Mitsubishi.

Sakhalin-2 has a estimated reserves of 45 billion barrels. Cost overruns mean the budget has risen to 17 billion euros.

Analysts and investment fund managers say that Shell’s experience in Russia proves the Kremlin has slammed the door on foreign investors who want control of strategic projects and they warn that other investors would do well to take notice.

In the last three months, Russia’s Natural Resources Ministry and Prosecutor General’s Office have used threats of administrative measures and licence withdrawals to put growing pressure on Shell and other major foreign investors, including Exxon Mobil and BP.

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