Royal Dutch/Shell stepped up its presence in Russia yesterday by approving a $1bn (£625m) investment in a large oilfield in western Siberia.
The go-ahead for the development of the Salym field follows the oil giant's approval earlier this year of the $10bn Sakhalin project and is further evidence of growing Western investment in oil-rich Russia.
BP has already paid $6.25bn for a half-stake in Russia's third-biggest oil producer TNK and on Monday there were reports that Exxon-Mobil and Chevron Texaco are vying to take a stake in the giant Russian oil major being created through the merger of Yukos and Sibneft, which is part-owned by Chelsea football club's new billionaire owner Roman Abramovich.
Shell said it had decided to proceed with the Salym investment even though it has been unable to conclude a production sharing agreement for the field which would have limited its tax liability.
The move followed threats by local Russian authorities to withdraw the Salym licence because Shell was failing to meet exploration targets. The field has reserves of up to 880 million barrels.
On Monday Shell criticised the Russian authorities for delays in striking a deal on the Salym field, saying it could harm the country's appeal to outside investors. But yesterday a spokesman said it had "complete confidence" that the licence issue would be resolved.
Walter van de Vigver, chief executive of Shell Exploration and Production, said: "The decision to proceed with the Salym fields is an important step forward in the development of Shell's presence in Russia, a country of high strategic importance for the group."
Russia is already the world's second largest oil exporter after Saudi Arabia and contains the world's largest reserves of natural gas.
The chief executive of Yukos, Mikhail Khordorkovsky, is currently locked in a row with President Vladimir Putin after one of his allies was arrested in July and charged with theft of state property.
Yukos denied that a deal has been reached with either Exxon Mobil or ChevronTexaco about taking a stake in the Salym field.Reuse content