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The Wall Street Journal: Shell, Rosneft Sign Cooperation Deal For Gas and Oil Production, Refining

Wall Street Journal image of Shell CEO Jeroen van der Veer

By BENOIT FAUCON
July 9, 2007 8:10 a.m.

LONDON — Royal Dutch Shell Monday said it has signed a cooperation deal with Rosneft for oil and gas production and refining in Russia and abroad.
 
The agreement comes after the recent loss of control of a Sakhalin project by Shell and after similar cooperation deal between BP PLC and OAO Gazprom. It underpins how Russia is still seeking the participation of foreign investors as minority partners in Russia, as well as their help abroad after unwinding deals signed with them in the 1990s.

In a statement, Shell said the agreement, signed in Moscow by Rosneft President Sergey Bogdanchikov and Shell Chief Executive Jeroen van der Veer, provides the opportunity for joint projects in oil and gas exploration, production, refining and marketing.

“It sets the basic principles of strategic cooperation between the two major international energy companies and lays the foundation for a long-term cooperation between Shell and Rosneft both in Russia and elsewhere,” it added.
 
Commenting on the agreement, Mr. Bogdanchikov said: “The agreement reached today will allow our companies to seriously widen the scope and geography of our work.” “There is no doubt that cooperation between Rosneft and Shell will be beneficial not only from commercial perspective — it is equally important to share experience and technologies,” he said.

Mr. Van der Veer said: “Russia is a strategic growth area for Shell and we are committed to developing our business in cooperation with Russian companies across the entire range of the energy business.”

Earlier this year, Shell lost control of its Sakhalin II oil and gas project to Gazprom after months of pressure by environmental authorities. Shell said it remains committed to investing in Russia.

Last month, BP’s Russian joint-venture TNK-BP Holding sold its stake to Gazprom but also struck a cooperation deal with the Russian state-owned gas company. Apart from Russia, Shell has also signed an agreement with the international arm of state-run Qatar Petroleum to pursue global projects together.

Write to Benoit Faucon at [email protected]

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