In this Shell game, Gazprom wins

Posted By Carolyn O'Hara Tuesday, December 12, 2006 - 12:55 PM Share

The Guardian is reporting that Russia's monster energy company Gazprom — with the full weight of the Kremlin behind it — has "forced" Shell to hand over its stake in the world's largest liquefied gas project in eastern Russia.

[S]enior politicians in Moscow had no doubt Shell was being harassed into reducing its 55% stake in Sakhalin-2 [the gas project] to something close to 25% through relentless pressure from ministries.

The IHT is slightly more diplomatic (or naive), reporting that Shell "offered" to sell Gazprom a major stake. But it's clear that a good deal of pressure came down on Shell. Last year, when talks on a proposed sale stalled, Russian authorities became suspiciously interested in possible environmental damage by the company. They threatened to shut Shell's operations down, as well as work by other foreign energy companies.

If you didn't think that the Russians were known for being enthusiastic advocates of environmental conservation, well, you'd be right. It doesn't take a neo-Kremlinologist to read between the lines here.

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