News and Document archive source
copyrighted material disclaimer at bottom of page

NewsMinewar-on-terrorrussia — Viewing Item


Putin buys shell bp to control oil and gas { November 2006 }

Original Source Link: (May no longer be active)
   http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2006/12/22/cnbp22.xml

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2006/12/22/cnbp22.xml

After Shell, Russia now turns on BP

By Edmund Conway
Last Updated: 1:14am GMT 22/12/2006

The Kremlin has moved decisively to take back ownership of Russia's oil-and-gas assets, taking effective control of Royal Dutch Shell's Sakhalin-2 project and issuing a chilling warning to BP about its future in the country.

President Putin personally oversaw the signing of a deal in which Shell will hand over control of Sakhalin to Gazprom, while a key Kremlin official warned BP that it has no choice but to accede to Russian demands with its latest project, or face crippling sanctions. Shell and its Japanese partners accepted a $7.45bn (£3.8bn) cash payment for a stake of 50pc plus one share in the project in the far north-east which was until yesterday the biggest single foreign investment in Russia.

Experts hailed Shell chief executive Jeroen van der Veer for securing a good price, but the sale will dramatically reduce the com-pany's reserves. It is particularly troubling for Shell since it was recently embroiled in a scandal over the accounting for its reserves, which led to the departure of previous chief executive Sir Philip Watts.

One analyst had warned that taking cash rather than barrels of oil for Sakhalin would be a "worst case scenario".

But a spokesman said: "This is an acceptable outcome for Shell and ends a period of uncertainty."

Under the Sakhalin deal, Shell will halve its stake from 55pc to 27.5, while Mitsui and Mitsubishi will see their shares cut to 12.5pc and 10pc respectively. The Anglo-Dutch group will continue to contribute to management and will act as a technical adviser to Sakhalin, which is the biggest liquefied natural gas project in the world.

Gazprom chief executive Alexei Miller said: "We, as the main shareholder of the project, will do everything to launch it as soon as possible."

Shell had come under mounting pressure to sell its stake to the Russians, with regulators criticising the company for its environmental and accounting record, and threatening to delay the project.

Now that the project has transferred into Russian hands, these obstacles are expected to disappear, and the resources minister Yuri Trutnev indicated as much last night, saying that the companies should "make the project the best in terms of environmental protection".

All eyes will now turn to BP's Russian joint venture, TNK-BP, which is already coming under increased scrutiny from the Kremlin.

In the latest episode, the head of the federal subsoil agency RosNedra, Anatoly Ledovskikh, has said that TNK-BP must accommodate Gazprom's refusal to let it build a pipeline into China.

"This is not an objective reason to change the licensing agreement... I very much hope that TNK-BP and Gazprom reach an agreement. They have no choice," he said.

The Sakhalin deal was hammered out over the course of three meetings in Moscow between Mr van der Veer and Mr Miller. The two companies had previously mulled plans for Gazprom to take 25pc of Sakhalin in return for a share of its Zapolyarnoye field. But with the Kremlin angry about cost overruns at the project which meant it would not receive as much revenue as expected, Gazprom later won the government's backing to aim for a larger stake.


1999-terror-fsb
aug-2004-crashes
chechnya
civil-liberties
dissent
feb-2004-subway-blast
may2002-attack
oct-2002-seige
oil-tycoon-arrested
school-hostage-siege-2004
tyranny
5 killed in suicide attack russia { December 9 2003 }
After economic meltdown now booming
Apartment 1999 blast battle for cash
Blast kills two checnya
Blast rocks russian hospital { August 1 2003 }
Bomb kills 10 in moscow { August 31 2004 }
Brits espionage in russia through ouncil offices { January 14 2008 }
Bush found trust deep in putins soul
Bush russia visit big deals
Campaign coverage law muzzles russian reporters { September 6 2003 }
Capitalism with a stalinist faces
Explosion kills 32 in russia
Kremlin targets jewish tycoons { October 31 2003 }
Kremlin using industry takovers for political business { November 19 2006 }
Mobile phones switch off encryption 24hrs
Nato hassles russia
New caspian oil pipeline bypasses russia { May 25 2005 }
New russia pm aims for reshuffle slimmer team
Oil baron blasts putin for market upheaval
Parliament approvial of strict rules on public protests
Putin buys shell bp to control oil and gas { November 2006 }
Putin cracks down
Putin praises fsb fighting terror { February 1 2003 }
Russia agents flood uk in cold war levels
Russia blamed for missing explosives
Russia developing new nuclear missile
Russia pledges to finish iran reactor { May 17 2004 }
Russia ready to strike anywhere around the world
Russia restricts abortions { August 24 2003 }
Russia spies in US at cold war levels
Russian alqaeda link
Russian born american replaces khordokovsky
Russian gas blast roll rising
Russian intelligence accused pipeline sabotage { December 1 2003 }
Terrorist acts organized by russian secret services
Uk cops foil plot kill putin
Ukraine russia reach gas deal
Who is guilt moscow explosions

Files Listed: 38



Correction/submissions

CIA FOIA Archive

National Security
Archives
Support one-state solution for Israel and Palestine Tea Party bumper stickers JFK for Dummies, The Assassination made simple