Russia‘s state-controlled natural gas monopoly has wrested control of the country’s largest single foreign investment from Shell, taking a majority stake in the Sakhalin-2 project for USD 7.45 billion in a deal that consolidates the Kremlin’s command over national energy resources. The agreement, announced at a Kremlin meeting on 21 December between President Vladimir Putin, executives from OAO Gazprom and Royal Dutch Shell PLC along with CEOs from Japanese shareholders, comes after months of mounting pressure from Russian regulators. Under the deal, Shell, Mitsui & Co. and Mitsubishi Corp. will halve their stakes in the USD 22 billion development on the Pacific island of Sakhalin and Gazprom will pay cash for a 50%-plus-one share in the project. That puts Gazprom in the driver’s seat of Russia‘s first LNG development, which is poised to be a key supplier to growing markets in Asia and North America. Shell said in a statement that it would retain a 27.5% stake and “continue to significantly contribute to the (consortium’s) management and remain as technical adviser.”
