Royal Dutch Shell Plc  .com Rotating Header Image

The Wall Street Journal: Crude & Dagger

EXTRACT: Royal Dutch Shell ceded control of the Sakhalin-2 energy project to the state-run behemoth Gazprom and agreed to pay Russia’s government a huge, variable dividend tied to the price of oil. At a time of increased anxiety over supplies that has had energy prices shooting up, Shell and others have had little alternative but to play ball with a sharp-elbowed Moscow. Russia boasts some of the world’s biggest untapped energy reserves.

THE ARTICLE

By TIM ANNETT

British investigators probing the polonium-triggered demise of a former Russian agent think they have their man. But bringing the suspect to justice could further chill relations between Moscow and the West and inspire the Kremlin to tighten its grasp on the country’s vast energy reserves.

U.K. authorities said they would seek the extradition of Andrei Lugovoi from Russia to face charges in connection with the radioactive poisoning death of the former Soviet agent Alexander Litvinenko. The saga carried all the markings of a Cold War espionage drama, capturing international attention and whipping up anxiety that the isotope that felled Mr. Litvinenko could hurt others. Withering away in a London hospital bed, Mr. Litvinenko claimed that he had been targeted by the Kremlin for his criticisms of President Vladimir Putin, and exiled billionaire Boris Berezovsky said the victim had said from his death bed that he suspected that Mr. Lugovoi, a former KGB agent, had poisoned him when the two men met at a London hotel late last year. The Kremlin has denied any role in Mr. Litvinenko’s death, and Mr. Lugovoi maintained his innocence, dismissing the extradition request as politically motivated, according to Russian media. Russia made it clear that it had no intention of turning Mr. Lugovoi over to the British, saying such a move would contradict its laws.

Relations between the countries were already sour. Russia accused four British diplomats of spying last year, and the Kremlin is furious that Britain provided refuge to Mr. Berezovsky, who hastened to the U.K. seven years ago in order to escape a money-laundering investigation that he says was politically motivated. And though it might not be directly related to the Litvinenko development, Russia’s environmental watchdog said today that BP’s license to develop a huge Siberian gas field could be yanked within a matter of days if the project doesn’t meet production guidelines. Moscow has been eager to expand its control over foreign energy projects within the country. Royal Dutch Shell ceded control of the Sakhalin-2 energy project to the state-run behemoth Gazprom and agreed to pay Russia’s government a huge, variable dividend tied to the price of oil. At a time of increased anxiety over supplies that has had energy prices shooting up, Shell and others have had little alternative but to play ball with a sharp-elbowed Moscow. Russia boasts some of the world’s biggest untapped energy reserves.

With all those petrodollars pumping into its economy, property and stock prices in Russia have been soaring moonward, and yesterday Mr. Putin suggested that the Kremlin dump some of its windfall into the stock market. Economists were near universal in condemning that idea, arguing that it would open up a whole new channel through which Russia’s government might tamper with commerce. But as long as energy prices remain high, Moscow appears likely to continue to flex its muscles. And though Mr. Putin is scheduled to leave office next year, it seems he will continue to cast a long shadow over his country. Reuters reported that Boris Gryzlov, leader of the United Russia party, introduced what he called “the Putin plan,” ideas culled from Putin addresses that would be fashioned into a sort of manifesto for the party in coming parliamentary elections, and that Mr. Putin would continue to function as a “national leader” after he steps down. Some have even called for Russia’s constitution to be revised to allow the enormously popular leader to serve longer, and Mr. Putin himself has said that it is “premature for me to come out with political last wills and testaments.”

May 22, 2007 5:03 p.m.

 

royaldutchshellplc.com and its sister websites royaldutchshellgroup.com, shellenergy.website, shellnazihistory.com, royaldutchshell.website, johndonovan.website, shellnews.net and shell2004.com are all owned by John Donovan. There is also a Wikipedia article.

0 Comments on “The Wall Street Journal: Crude & Dagger”

Leave a Comment

%d bloggers like this: