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Daily Telegraph: Wise Shell learns to read Russian: Shell signs asset swap with Russian gas giant

Daily Telegraph: Wise Shell learns to read Russian: Shell signs asset swap with Russian gas giant

“Events at Yukos have proved that it is better to invite the Russian wolf to your table than let it blow your house down and eat your family”

Friday 8 July 2005

City comment

Edited by Neil Collins

(Filed: 08/07/2005)

Rudi Giuliani was the man who rose to the occasion when the World Trade Centre was collapsing, and by curious co-incidence he was in town yesterday to address the senior executives at Shell.

Curiously, he felt unable to say anything on the subject of the day to the journalists assembled to hear the rather better news from his hosts. Jeroen van der Veer, Shell’s chief executive, understandably lacked the stomach to prolong the press conference called to unveil a shrewd asset swap with Russia’s state-owned Gazprom.

The deal effectively swaps a stake in a big pool of Russian oil for one in a much bigger prospect; selling today’s proven oil for many more of tomorrow’s barrels, if you like.

Shell seems to be getting the better half of the deal (although Mr Van der Veer certainly wouldn’t claim so publicly, given the sensitivity of an increasingly autocratic Russian president). For analysts, it’s an encouraging sign Shell is starting to make up the ground lost to BP in Russia, while (sensibly) allowing the Kremlin to take a major stake in one of the Motherland’s biggest projects.

Events at Yukos have proved that it is better to invite the Russian wolf to your table than let it blow your house down and eat your family. After ushering Gazprom’s chairman to his car, the increasingly impressive Van the Man surprised everybody by returning for some proper questions rather than merely reading a prepared statement, proving just how far glasnost at Shell has come in the last year.

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