MarketWatch: Gazprom: Sakhalin cost overrun hits Shell asset swap plan
“Russian state gas monopoly OAO Gazprom said Friday it will revise downward its valuation of a 25% stake it intends to acquire in the Royal Dutch/Shell-led Sakhalin-2 project, in light of cost overruns announced Thursday.”
Posted 16 July 2005
MOSCOW (MarketWatch) — Russian state gas monopoly OAO Gazprom (GSPBEX.RS) said Friday it will revise downward its valuation of a 25% stake it intends to acquire in the Royal Dutch/Shell-led (RD, SC) Sakhalin-2 project, in light of cost overruns announced Thursday.
Under the swap deal signed earlier this month, Gazprom will buy a stake of as much as 25% plus one share in the Sakhalin-2 project, an oil and gas venture located off Russia’s Pacific coast. In return, it agreed to cede to Shell a 50% stake in a massive Siberian gas field. The difference in value between the two assets is to be settled for a sum of cash to be determined in the future.
Shell said Thursday that costs in the second phase of the Sakhalin-2 project may double to $20 billion, and first liquefied natural gas deliveries may be delayed by six months to mid-2006.
“The amount of capital investment in the Sakhalin-2 project and the timeframe for the first LNG deliveries are key factors that determine the value of assets in this project,” Gazprom Deputy Chief Executive Alexander Medvedev said in a press release. These two factors “will undoubtedly lead to a downward revision in the value of Shell’s Sakhalin-2 assets.”
The Sakhalin-2 project has already signed contracts to supply gas to Asia and North America. Mitsui & Co. Ltd. (MITSY) and Mitsubishi Corp. (8058.TO) also have stakes in the project.
Rising metals prices and the devaluation of the U.S. dollar over the past two years have raised costs for oil and gas projects around the world. When Sakhalin-2’s board declared the second phase of the project commercial in May 2003, costs were estimated to total $10 billion.
Company Web site: http://www.gazprom.ru
-Contact: 201-938-5400
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Royal Dutch Shell conspired directly with Hitler, financed the Nazi Party, was anti-Semitic and sold out its own Dutch Jewish employees to the Nazis. Shell had a close relationship with the Nazis during and after the reign of Sir Henri Deterding, an ardent Nazi, and the founder and decades long leader of the Royal Dutch Shell Group. His burial ceremony, which had all the trappings of a state funeral, was held at his private estate in Mecklenburg, Germany. The spectacle (photographs below) included a funeral procession led by a horse drawn funeral hearse with senior Nazis officials and senior Royal Dutch Shell directors in attendance, Nazi salutes at the graveside, swastika banners on display and wreaths and personal tributes from Adolf Hitler and Reichsmarschall, Hermann Goring. Deterding was an honored associate and supporter of Hitler and a personal friend of Goring.
Deterding was the guest of Hitler during a four day summit meeting at Berchtesgaden. Sir Henri and Hitler both had ambitions on Russian oil fields. Only an honored personal guest would be rewarded with a private four day meeting at Hitler’s mountain top retreat.
IN JULY 2007, MR BILL CAMPBELL (ABOVE, A RETIRED GROUP AUDITOR OF SHELL INTERNATIONAL SENT AN EMAIL TO EVERY UK MP AND MEMBER OF THE HOUSE OF LORDS: 
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