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BBC News: Shell boss heads for Russia talks

The boss of Anglo-Dutch energy giant Shell is to fly to Moscow for talks with Russia’s energy minister over a $22bn (£11bn) oil and gas project.

Jeroen van der Veer is expected to meet Viktor Khristenko later this week to discuss the Sakhalin-2 project.

Shell is widely expected to cede control of the venture to Russia’s state-run energy firm Gazprom.

Shell has been under intense pressure from officials keen to regain control of Russian assets, analysts have said.

Japanese partners

Earlier this month Moscow suspended 12 vital water-use permits for Sakhalin-2, after previously revoking environmental approval for the project.

Shell recently restarted talks with Gazprom over a possible swap or sale of assets in the project, which is situated off Russia’s Pacific coast.

Shell currently holds a 55% stake in Sakhalin-2, with Japanese companies Mitsui and Mitsubishi sharing the rest.

Reports have suggested that both Japanese firms are seeking cash from Gazprom in exchange for a slice of their stakes in Sakhalin-2.

Mitsui said talks on the issue were progressing constructively.

Story from BBC NEWS:

Published: 2006/12/18 14:02:12 GMT

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