Reuters: Shell may need to pay cash for Sakhalin swap-Gazprom
“Russian gas giant Gazprom said on Wednesday that Shell might have to pay it cash as part of an asset swap after the oil major doubled the project’s cost estimates in July to $20 billion.”
Wednesday 21 Sept 2005
BEIJING, Sept 21 (Reuters) – Russian gas giant Gazprom (GAZPPE.RTS: Quote, Profile, Research) said on Wednesday that Shell (RDSa.L: Quote, Profile, Research)(RDSa.AS: Quote, Profile, Research) might have to pay it cash as part of an asset swap after the oil major doubled the project’s cost estimates in July to $20 billion.
Gazprom agreed in July to swap a 50 percent stake in its Siberian gas field Zapolyarnoye for a 25 percent stake in the Shell-led Sakhalin-2 liquefied natural gas (LNG) project off Russia’s far east coast.
Shell had been expected to be compensated through a package of cash and other assets.
But asked by Reuters if the cost overrun made it more difficult for Shell to ask for cash, Alexander Medvedev, the head of Gazprom’s export arm Gazpromexport, said: “It will be difficult. It will be probably the vice-versa picture.”
Shell has raised the cost estimate for Sakhalin-2, one of its flagship projects, due to rising metals prices, a weak dollar and Russian inflation. It also delayed some production dates for both LNG and crude.
“Subjectively the value of the asset declined… but for us the economics of the project are still good enough,” Medvedev told reporters in Beijing.
Gazprom said at the time that the revision diminished the value of Sakhalin, but had not said since whether it wanted to change the swap deal, which analysts had said was unequal since the Sakhalin project was more advanced than Zapolyarnoye.
The Sakhalin group, which also includes Japan’s Mitsui & Co. (8031.T: Quote, Profile, Research) and Mitsubishi Corp. (8058.T: Quote, Profile, Research), is building the world’s largest LNG plant with a planned capacity of 9.6 million tonnes a year.
Gazprom has long been trying to make its way into Sakhalin-2 as it would give the firm its long-awaited entry into the booming LNG business. Last week it formed a shortlist for choosing a partner in a separate $20 billion Arctic gas project big enough to supply the U.S. market for half a century.
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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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A head-cut image of Alfred Donovan (now deceased) appears courtesy of The Wall Street Journal.
