THE SHELL LEAKS FILES: 28 SEPTEMBER 2026
SLF-2007-071
The Sakhalin Papers LXI: The Kremlin Deal — $7.45 Billion and the Day Shell Agreed to Give Up Control
On 21 December 2006, after months of environmental enforcement, permit uncertainty, cost disputes and negotiations with Gazprom, Shell and its Japanese partners signed a protocol inside the Kremlin. Gazprom would pay $7.45 billion for 50 per cent plus one share of Sakhalin Energy. Shell’s 55 per cent interest would be halved. President Vladimir Putin described Gazprom’s entry as a corporate decision and, at the same meeting, said the project’s fundamental problems could be considered resolved. The timing generated immediate allegations that regulatory pressure had been used as commercial leverage. Shell did not adopt that interpretation. Nor did any court identified in this archive adjudicate such a bargain. What the documents do establish is unusually stark: the ownership dispute, the project-budget dispute and the environmental crisis converged on the same day.
Archive reference: SLF-2007-071
Collection: The Sakhalin Papers
Principal authenticated record: Royal Dutch Shell plc Form 6-K filed with the US Securities and Exchange Commission, December 2006; Royal Dutch Shell plc Annual Report and Form 20-F 2007
Corporate environmental record: Shell Sustainability Report 2006
Government and institutional record: contemporaneous Kremlin statements; later House of Commons Foreign Affairs Committee report
Contemporaneous reporting: The Guardian, Wall Street Journal, Bloomberg, Radio Free Europe/Radio Liberty, Oil & Gas Journal
Later judicial context: Export Credits Guarantee Department v Friends of the Earth [2008] EWHC 638 (Admin)
Additional contemporary record: Shell’s January 2007 response to the Donovan account, subsequently preserved by Legal 500
Evidence standard: transaction terms are treated as corporate facts; Russian environmental allegations as allegations; descriptions of administrative pressure are attributed to journalists or Parliamentary findings; the coincidence of regulatory and commercial events is not treated as proof of a secret quid pro quo.
