Credit crunch forces embarrassing climbdown on resource nationalism.
Russia has been forced into an embarrassing climbdown on resource nationalism, as the credit crunch has left it unable to invest in the development of its assets.
In a surprise move, Russian prime minister Vladimir Putin invited Royal Dutch Shell to help develop two new oil and gas fields on Sakhalin Island, just three years after the government forced the company to cede majority control in the Sakhalin 2 project to state-controlled group Gazprom.
In its biggest resource nationalism drive in 2006, the Russian government forced Shell to sell its stake in the project to Gazprom for $7.5bn (£4.5bn). The Anglo-Dutch group retained a 27.5pc stake, with Gazprom holding 50pc plus one share. Mitsui owns 12.5pc of the project and Mitsubishi 10pc.
According to IMF and World Bank estimates, the oil and gas sector generated more than 64pc of Russia's export revenues in 2007.
However, as commodity prices plunged last year the country's economy has gone into a sharp reversal and Russia needs external funding and expertise to develop its oil and gas reserves.
Last week, the World Bank said that it expected the Russian economy to shrink 7.9pc in 2009.
In the last major meeting of his tenure as Shell chief executive, Jeroen van der Veer and incoming chief executive Peter Voser held discussions with Mr Putin in Moscow over the weekend, where they were told that involvement in the Sakhalin 3 and Sakhalin 4 projects was "highly possible".
This follows the signing of an exploration joint venture last week between Total and Russia's largest independent gas producer Novatek, which could eventually lead to the French group being chosen to partner with the Russian group in Shtokman, one of the largest gas prospects in the world.
The agreement, however, was informal and there was no confirmation that Shell would own a stake in the projects.
Shell also signed a co-operation deal with Russian shipping firm Sovcomflot to develop shipping infrastructure for the transport of liquefied natural gas.
In a surprise move, Russian prime minister Vladimir Putin invited Royal Dutch Shell to help develop two new oil and gas fields on Sakhalin Island, just three years after the government forced the company to cede majority control in the Sakhalin 2 project to state-controlled group Gazprom.
In its biggest resource nationalism drive in 2006, the Russian government forced Shell to sell its stake in the project to Gazprom for $7.5bn (£4.5bn). The Anglo-Dutch group retained a 27.5pc stake, with Gazprom holding 50pc plus one share. Mitsui owns 12.5pc of the project and Mitsubishi 10pc.
According to IMF and World Bank estimates, the oil and gas sector generated more than 64pc of Russia's export revenues in 2007.
However, as commodity prices plunged last year the country's economy has gone into a sharp reversal and Russia needs external funding and expertise to develop its oil and gas reserves.
Last week, the World Bank said that it expected the Russian economy to shrink 7.9pc in 2009.
In the last major meeting of his tenure as Shell chief executive, Jeroen van der Veer and incoming chief executive Peter Voser held discussions with Mr Putin in Moscow over the weekend, where they were told that involvement in the Sakhalin 3 and Sakhalin 4 projects was "highly possible".
This follows the signing of an exploration joint venture last week between Total and Russia's largest independent gas producer Novatek, which could eventually lead to the French group being chosen to partner with the Russian group in Shtokman, one of the largest gas prospects in the world.
The agreement, however, was informal and there was no confirmation that Shell would own a stake in the projects.
Shell also signed a co-operation deal with Russian shipping firm Sovcomflot to develop shipping infrastructure for the transport of liquefied natural gas.
Source: The Daily Telegraph
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