Russia’s state-controlled natural gas monopoly has wrested control of the
country’s largest single foreign investment from Shell, taking a majority
stake in the Sakhalin-2 project for USD 7.45 billion in a deal that
consolidates the Kremlin’s command over national energy resources. The
agreement, announced at a Kremlin meeting on 21 December between President
Vladimir Putin, executives from OAO Gazprom and Royal Dutch Shell PLC along
with CEOs from Japanese shareholders, comes after months of mounting
pressure from Russian regulators. Under the deal, Shell, Mitsui & Co. and
Mitsubishi Corp. will halve their stakes in the USD 22 billion development
on the Pacific island of Sakhalin and Gazprom will pay cash for a
50%-plus-one share in the project. That puts Gazprom in the driver’s seat of
Russia’s first LNG development, which is poised to be a key supplier to
growing markets in Asia and North America. Shell said in a statement that it
would retain a 27.5% stake and “continue to significantly contribute to the
(consortium’s) management and remain as technical adviser.”
