By Torrey Clark
March 30 (Bloomberg) — Royal Dutch Shell Plc expects to cede control of the Sakhalin-2 project in Russia’s Far East to state-run OAO Gazprom by the end of the year as the two sides hash out the details of the $7.45 billion deal.
“Work is progressing well on the details,” said Maxim Shoob, a spokesman for Shell in Moscow. “We always expected the deal to be closed by the end of 2007.”
Gazprom Deputy Chief Executive Officer Alexander Medvedev said in December the company would join the project in February and pay for the stake by the end of the first quarter of 2007.
Officials from Gazprom are visiting the project’s sites on Sakhalin Island and helped develop a plan to fix environmental problems, including illegally felling trees.
Gazprom’s press service confirmed the deal would close by the end of the year. Neither Shoob nor Gazprom would comment on the payment schedule.
The three Sakhalin-2 shareholders, Shell, Mitsui & Co. and Mitsubishi Corp., each agreed to sell half their stakes to Gazprom last year as environmental regulators hounded Shell, the project operator.
To contact the reporter on this story: Torrey Clark in Moscow at [email protected] .
Last Updated: March 30, 2007 03:25 EDT