Russia seeks to seize control of Sakhalin
Friday 26 May 2006
The threat concerns the Sakhalin-2 project, the largest direct foreign investment in Russia, and a venture that will result in the world's biggest liquefied natural gas plant in the far east of Russia. Shell has a 55 per cent stake in the $10bn (£5.3bn) project while two Japanese firms own the other two stakes. The Russian government has a revenue-sharing arrangement with the consortium but is known to be keen to get a direct stake in the project as Moscow seeks to bring more strategic energy reserves under the Kremlin's control.
President Vladimir Putin has already urged Shell to honour a promise it apparently made to surrender a 25 per cent stake in the project in exchange for a share of a Siberian gas field.
Yesterday the pressure intensified when the Natural Resources Minister said it supported radical advice it had received from the country's Academy of Natural Science urging it to take a 51 per cent stake in three different revenue-sharing projects including Sakhalin-2.
"The Academy suggests boosting the presence of Russian companies in these consortiums to 51 per cent as one of the measures to boost efficiency," it said.
The other two projects were the Sakhalin-1 oil and gas venture, in which Exxon has a 30 per cent stake, and a large oil extraction operation in Russia's far north in which Total is involved.
The ministry said it intended to act on the academics' recommendation and to write to other government ministries to "correct the situation".
Shell declined to comment but is known to have incurred the Kremlin's wrath due to massive cost overruns on Sakhalin-2, which have prompted the Anglo-Dutch firm to ask the government to allow it to double its investment to $20bn.
There were also reports that the Natural Resources Ministry intended to take legal action against Total, a company the authorities believe is mismanaging its Russian investments, and to initiate detailed investigations into the efficiency of Shell and Exxon.
When revenue-sharing projects such as Sakhalin-2 were launched in the 1990s, Russia was relaxed about giving foreign firms large stakes in big oil and gas projects, but under Vladimir Putin that policy has changed and Russian, often state-controlled, firms usually take a 51 per cent stake.
The Natural Resource Ministry's threat came on a day when Mr Putin told a summit of EU leaders the West could count on Russia as a reliable energy partner.
World's most lethal spider found under a bunch of bananas
Rumours that the star wants to move on to pastures new
TV presenter Fiona Bruce seemed a bit startled by the find during the filming of Antiques Roadshow
Comedian says he 'never laughed as hard as I have writing with Rik'
- 1 Sick elderly man makes 'complete turnaround' after emotional reunion with dog
- 2 Star Wars memorabilia dubbed 'bit of plastic' by Antiques Roadshow's Fiona Bruce valued at £50,000
- 3 Isis fighters 'crucify' 17-year-old boy in Syria
- 4 Ebola cruise ship ‘in utter panic’ as Mexico and Belize refuse to let it dock
- 5 Death of northern white rhino leaves just six of endangered animals left in the world
Cameron is warned 'no possibility' of UK reducing immigration and that bid to bring in quota on migrant workers would be illegal
Sorry Judy Finnigan – Ched Evans is no less sickening than an alleyway rapist
Residents should throw a street party and mix with immigrant neighbours, councils told
Workers 'could be forced to pay £5 a week' to get benefits
Russell Brand threatened with arrest after filming outside Fox News headquarters
Amal Alamuddin calls for the return of the Elgin Marbles from Britain: 'Injustice has persisted for too long'
iJobs Money & Business
£60,000 - £80,000: Saxton Leigh: Our client is an leading Asset Manager based...
£27000 - £32000 Per Annum: Clearwater People Solutions Ltd: Our large charity ...
£50000 - £55000 per annum + bonus + benefits: Ashdown Group: IT Relationship M...
Highly Attractive Salary : Austen Lloyd: NOTTINGHAM - BRILLIANT FIRM - You wil...