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Dec 2001 Sakhalin-2: Jeroen van der Veer says Shell demanded Gazprom ‘fly the Shell flag’ on top Gazprom building: 5 yrs later Shell flew the white flag

ROYAL DUTCH/SHELL GROUP OF COMPANIES: Investor Relations Presentation

By Philip Watts, Jeroen van der Veer,Judy Boynton, Walter van de Vijver, Harry Roels and Paul Skinner: Tuesday, December 18, 2001, New York City. (60 pages every paged marked “Confidential”)


MR. WATTS:  On the Russian side, specifically regarding Sakhalin, I was there in July with the CEOs of Mitsui and Mitsubishi, visualizing what it will be like. We are doing serious work on the engineering. There are two aspects to it. One is the gas market to Japan or Korea; second is the situation in Moscow on the PSAs and how quickly they will come out. I am personally reasonably encouraged with the way things are going. As you know, it is coming into focus on the marketing side. On the Russian scene the issue of the PSA is at the front of the leaders’ minds in Russia. Jeroen and I were in Zapolenoya at the signing in 1997 of the alliance with Gazprom.

MR. van der VEER: A condition for signing was they fly the Shell flag with the pecten from the top of the Gazprom building, and they did it. After that, the development of the project went slower. That was because of the Russian crisis, and a lot of things slowed down because of the energy prices. There was a change in the regime and Gazprom was closed as well. The good thing is that throughout that period we maintained very good relations. We have good relations with the new leadership and Zapolenoya is still very much on their and our minds, albeit later than we hoped.

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