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Bloomberg: EBRD PULLS OUT OF TALKS ON SAKHALIN-II PROJECT FINANCING

(The following is a release issued by EBRD and it was received via electronic mail. The release has not been confirmed by the sender.)

Aug. 7 — By mutual agreement with OAO Gazprom and the other shareholders of the Sakhalin Energy Investment Company, it has been decided that the EBRD will not resume negotiations on financing the Sakhalin II project.

The EBRD withdrew from active consideration of the project in January because there was a significant change of shareholding of SEIC and the new shareholders were reviewing financing plans. In informal discussions with the EBRD since then, it became clear that in light of the timetable envisaged by the shareholders, the financing from the EBRD was not feasible. Gazprom, the majority shareholder, and the other shareholders of the SEIC have reached an advanced stage in the negotiations for the financing of Sakhalin II and now expect to reach financial closure in the next few months.

Gazprom and the EBRD now consider that it is preferable to focus on cooperation in other projects – such as promoting sustainable energy – where the experience and expertise of the EBRD can add significant value to Gazprom and Russia.

Kh (Lo)
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Last Updated: August 7, 2007 06:10 EDT

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