By Douglas Busvine
MOSCOW, Dec 11 (Reuters) – Oil major Shell
An accord whereby Shell would keep a blocking stake of at least a quarter in the world’s largest liquefied natural gas project was reached on Friday at talks between Shell CEO Jeroen van der Veer and Gazprom’s
Gazprom had no immediate comment, while a Shell spokesman confirmed that a meeting had taken place.
“I can confirm that Shell Chief Executive Jeroen van der Veer met Gazprom head Alexei Miller and Energy Minister Viktor Khristenko in Moscow on Friday to discuss Sakhalin-2-related issues,” the spokesman told Reuters.
“The discussions were positive but their contents remain confidential.”
The understanding comes after months of pressure from Russia’s Natural Resources Ministry and its environmental regulator, which have accused Shell of ecological violations in project work on the remote Far Eastern island of Sakhalin.
Industry analysts suspect the official campaign was designed to secure better terms for Russia, which has no equity stake in Sakhalin-2 under a production-sharing agreement struck in the early 1990s.
Work on the Sakhalin-2 project, which will supply an LNG processing facility with a capacity of 9.6 million tonnes per year, is mostly complete but threats of licence withdrawals, fines and litigation are disrupting development work.
A doubling of estimated costs at Sakhalin derailed an earlier deal under which Shell would have swapped a one-quarter stake in Sakhalin for an interest in Gazprom’s onshore Zapolyarnoye field.
ASSETS PLUS CASH?
Now, sources familiar with the matter say, Gazprom will swap oilfield assets and possibly make a cash payment for a controlling stake of over 50 percent in Sakhalin-2. Anglo-Dutch Shell now owns 55 percent and is the project’s operator.
Asked about whether a cash payment would be added to the asset swap involving Zapolyarnoye, one industry source said: “That was the original deal, but deals change.”
In the transaction, Shell’s project partners — Japan’s Mitsui & Co <8031.T> and Mitsubishi <8058.T> — would reduce their stakes, which are currently 25 and 20 percent respectively.
Another industry source has said that the Japanese companies may sell 10 percent each, thus enabling Gazprom to secure majority control.
Mitsui said it was checking the Reuters report, while Mitsubishi was not immediately available for comment.
One Moscow-based investment banker told Reuters last week that Gazprom was poised to secure a majority in Sakhalin.
“It’s likely to follow the general trend of state companies getting control,” the banker said, adding he expected a final resolution to the long-running conflict in the first quarter of 2007.
The project will continue to operate on the basis of a production-sharing agreement, an arrangement whereby project costs are first defrayed before revenues accrue to the Russian state. “The PSA stands,” the industry source said.
© Reuters 2006. All rights reserved.
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.
