Gazprom joins Sakhalin-2 oil, gas project

Gazprom joins Sakhalin-2 oil, gas project

Russian natural gas monopoly Gazprom has joined the Sakhalin-2 oil and gas project by pledging to acquire a 50 percent stake plus one share in the project, Gazprom chief executive Alexei Miller said on Thursday.

Gazprom will acquire its share in the project, worth 7.45 billion U.S. dollars, by partially buying the stakes of three foreign shareholders of Sakhalin Energy — Royal Dutch Shell, Mitsui and Mitsubishi — under a protocol signed on Thursday, Miller was quoted as saying by the Interfax news agency at a meeting between Russian President Vladimir Putin and representatives of Russian and foreign companies.

Putin assured foreign investors that the Russian leadership is ready to meet them halfway, and that there have already been such cases.

“We did all to meet you halfway, and settled all problems,” he said.

Putin said he was pleased that “solutions satisfying everybody” have been found on the Sakhalin-2 project. “I want to thank the partners for this flexible approach,” the president said.

Early this month, Shell proposed new terms for Gazprom’s entry into the project, namely that the gas monopoly acquire the greater part of the project capital by buying interest from Shell, Mitsui and Mitsubishi.

The chairman of the Gazprom board of directors, Russian First Deputy Prime Minister Dmitry Medvedev, said Gazprom would take hold of half the project and pay for it either solely with cash or with cash and assets.

Shell subsidiary Shell Sakhalin Holdings owns a 55 percent stake in the Sakhalin Energy Investment Company, operator of Sakhalin-2. Mitsui subsidiary Mitsui Sakhalin holdings owns 25 percent interest and Mitsubishi subsidiary Diamond Gas Sakhalin a 20 percent stake n the Investment Company.

Sakhalin-2 is a project to develop the Piltun-Astokhskoye oil field with total reserves of about 150 million tons of oil and the Lunskoye gas field, which contains about 500 billion cubic meters of gas.

Source: Xinhua

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