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Bloomberg: Shell CEO Wants Gazprom as Sakhalin-2 Partner; Stake Undecided

By Stephen Voss and Brian Sullivan

Oct. 5 (Bloomberg) — Royal Dutch Shell Plc would welcome state-run OAO Gazprom as a partner in its Sakhalin-2 project in eastern Russia, Shell Chief Executive Officer Jeroen van der Veer said. Gazprom’s equity share has yet to be decided.

“At this moment, all the partners are foreign partners, so we think it is quite sensible to have Gazprom as a partner in the project,” Van der Veer said in an interview in Irving, Texas, today. “We have been very consistent; we really welcome Gazprom as a partner in the Sakhalin project, we think that is the logical way.”

Shell, western Europe’s largest oil and gas company, and Russia’s Gazprom agreed in July last year to a swap that would give Gazprom a 25 percent stake in the project in return for giving Shell 50 percent of another project in Siberia. That was before Shell announced a cost overrun on the Sakhalin project, which Russian authorities have said they are reviewing.

Asked how large a stake Gazprom should have, Van der Veer said: “That is exactly the point of discussions; one needs to have discussions to agree under which terms that will take place.”

The Shell-led venture will hold discussions with Russian authorities “in the coming weeks” on environmental objections that threaten to delay or halt the Sakhalin-2 oil and gas project, he said.

To contact the reporters on this story: Stephen Voss in London at [email protected] Brian Sullivan in Irving, Texas or at [email protected]

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