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Shell CEO: In Early Talks With Rosneft, ‘Interested’ In Arctic

By Alexis Flynn: Published July 28, 2011 Dow Jones Newswires

LONDON -(Dow Jones)- Royal Dutch Shell PLC (RDSA.LN) Chief Executive Peter Voser said Thursday the Anglo-Dutch energy giant is in early stage talks with Russia and OAO Rosneft (ROSN.RS) about further opportunities in the country after the recent collapse of a proposed BP PLC (BP)-Rosneft venture.

“We have had discussions with the Russian state and Rosneft and we are exploring opportunities within Russia and outside Russia. These talks are at a very early stage and it would be pure speculation to now talk about potential outcomes. The discussions are ongoing and we will inform the market at the appropriate time on how we are progressing,” said Voser.

He added that the Arctic was a key area of interest for Shell.

“We have decades of Arctic experience and we are obviously interested in the various areas [globally] to further develop our acreage and bring our technology and innovation and skills into that, and it’s clear that this also includes the Russian Arctic, like the Kara Sea and other areas,” said Voser.

Rosneft’s Chief Executive Eduard Khudainatov said last month that the state-owned firm would pick a partner to replace BP in the Arctic projects by the end of 2011.

Rosneft agreed in January with BP to a $16 billion share swap and development of three Arctic offshore licenses, but that deal was blocked by BP’s partners in the TNK-BP Ltd. (TNBP.RS) joint venture.

Shell has in the past ruled out doing a share swap deal similar to the one agreed by BP. However, Russia is now looking at selling a stake of up to 15% in Rosneft as part of an expanded privatization program. A key government adviser said last month Russia wants to hasten the stake sale in the wake of BP and Rosneft’s collapsed deal.

On Thursday, the Economy Ministry said Russia might sell up to 15% of Rosneft next year, as the Russian government moves to cut the state’s role in the economy and raise money to balance the budget.

(Jacob Gronholt-Pedersen contributed to this article.)

Copyright � 2011 Dow Jones Newswires

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