Royal Dutch Shell Group .com Rotating Header Image

Daily Mail: Russia fuels foreign oil firms’ fears

Lucy Farndon,
19 September 2006

RUSSIA flexed its muscles again, adding to fears that foreign oil firms will be sidelined as its prize oilfields are developed.

Its Natural Resources Ministry has revoked environmental permits allowing Royal Dutch Shell’s consortium to proceed with its £11bn Sakhalin-2 gas project.

Meanwhile, the Kremlin-supported gas monopoly Gazprom is tipped to elbow in on BP’s joint venture TNKBP. Local reports suggest that the three Russian shareholders are planning to sell their 50% stake in the project to Gazprom, forcing BP into an unwelcome partnership.

Russia is not the only country giving favoured treatment to its stateowned enterprises. Burren Energy, the third largest UK independent oil company, which operates in Turkmenistan and Congo, said it had become very tricky to gain access to the fields with proven reserves.

Burren boss Finian O’Sullivan, who is moving from chief executive to president to focus purely on finding new opportunities, said: ‘National oil companies are being given the opportunities and it is very difficult for foreign oil companies to invest.’

By wielding the huge financial power from its oil assets, ‘Russia has gone from being the plague of the community of G8 nations to being in control of the G8,’ he added.

Shell (up 12p to 1740p) says it is ‘confident there are no valid grounds’ for its Sakhalin permit to be revoked and warns this could lead to delays in the project, which has been marred by cost overruns.

BP (up 6p to 579p) suffered another setback to its Thunder Horse field in the Gulf of Mexico after discovering faults with its subsea equipment.

It had hoped to commence production in 2005, but was blown off course by Hurricane Dennis. Yesterday it warned production will not begin until the second half of 2008.

• Despite having downgraded its production estimates earlier in the year, Burren Energy (up 16½lp to 914½l;p) still managed to grow underlying earnings by 59%.

It has kept a lid on costs and benefited from a 38% rise in the price it gets for oil to $60.48 a barrel.

First-half pretax profit climbed from £52m to £85m, with the interim dividend raised from 2½p to 4p. Chief operating officer Atul Gupta takes over as chief executive. and its sister non-profit websites,,,,,, and are owned by John Donovan. There is also a Wikipedia feature.

Comments are closed.

%d bloggers like this: