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The Times: Russia: ‘a contract with Russia is worth little more than the paper it is written on’

12 December 2006
 
Life is anything but a gas for foreign business interests in Russia, as Gazprom moves closer towards wresting control of Sakhalin-2, the giant Siberian gas project, from Royal Dutch Shell. The news emerges as The Times reports that foreign energy companies will in future not be welcome as owners in Russia’s energy industry, only as subcontractors.

More on Russia

Most broadsheets lead with reports that Shell has made a new proposal in negotiations over Gazprom’s participation in Sakhalin Energy, the company building a $20 billion (£10.2 billion) liquefied natural gas scheme in Eastern Siberia.

It is thought that Gazprom will acquire 50 per cent plus one share of the Sakhalin Energy company, reducing Shell’s stake to 25 per cent, from 55 per cent. Mitsui and Mitsubishi, the current minority investors, would see their stakes reduced further.

In an apparent retreat into isolationism, a spokesman for President Putin said that Russian companies no longer needed foreign help.

The Times comments that Shell’s experience of Putinisation reinforces the sense that a contract with Russia is worth little more than the paper it is written on.

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http://business.timesonline.co.uk/article/0,,8210-2500321,00.html

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