Russia may stake claim on Sakhalin

24-08-2006

Russia may slim oil giant Shell's investment opportunities in a major liquefied natural gas project.

The natural resources ministry said it was chewing over its options on the Sakhalin-2 project, the largest direct foreign investment in Russia.

Sakhalin-2 aims to establish the world's biggest liquefied natural gas plant in the far east of Russia.

Shell controls 55 per cent in the £5.3 billion concern. Two Japanese firms own the other two stakes.

Although the Russian government has a revenue-sharing arrangement with the group, analysts said Moscow wanted more control over strategic energy reserves.

Russian president Vladimir Putin has called on Shell in the past to stick by promises to surrender a quarter stake in the project for a share of a Siberian gas field.

The Academy of Natural Science urging has urged the Putin administration to take a 51 per cent stake in Sakhalin-2.

Russia is the world's second biggest oil exporter.

Exxon has a 30 per cent stake in Sakhalin-1, a $10 billion plus project which aims to produce 250,000 barrels per day later this year.

Mr Putin yesterday told the EU that access to Russia's state energy interests should be met with a corresponding share in the EU markets.

At a news conference he said EU partners must take reciprocal steps before he would allow them into "the holy of holies" of the Russian economy.

The EU is the world's second largest energy market and depends on Russia for over a quarter of its gas supplies.


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