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Shell, Gazprom to Combine Beyond Russia

By JAMES HERRON

LONDON—Royal Dutch Shell PLC and Russian gas giant OAO Gazprom signed an agreement on Tuesday that will deepen their existing partnership within Russia and see them work together outside Russia for the first time, Shell said in a statement.

The agreement promises “further development of bilateral cooperation in exploration and production of hydrocarbons in western Siberia and the far east of Russia [and] cooperation in the downstream oil products business in Russia and Europe, as well as Gazprom participation in Shell upstream projects outside of Russia,” Shell said.

The pact was signed in Moscow by Gazprom Chief Executive Alexey Miller and Shell CEO Peter Voser. It will give Gazprom “new large-scale projects and growing joint presence in new markets,” said Mr. Miller.

“This underscores the strong partnership our companies have built in recent years,” said Mr. Voser. Gazprom and Shell are already partners in the Sakhalin-2 liquefied natural-gas export project in Russia’s far east, although Gazprom’s entry only came about after sustained pressure from the Russian government for Shell to cede control of the project.

“We are happy to invite foreign partners to develop our upstream reserves, but only if in exchange we get the access to their first class projects somewhere in the world,” said Gazprom Deputy Chief Executive Alexander Medvedev on Monday. “We do know Shell has good assets, which could be of interest for us.”

Under former Chief Executive Jeroen van der Veer, Shell discussed participating in the development of huge energy resources in the remote Yamal Peninsula, which are seen as vital to Russia’s ability to meet future demand for natural gas.

“Russia is an important area for new energy development for Shell and I expect it will play a big role in meeting the world’s growing demand for oil and gas in the years ahead,” said Mr. Voser.

WSJ ARTICLE

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