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Shell to sign Russian Arctic deal with Gazprom Neft, Kremlin reveals

Royal Dutch Shell is poised for a fresh attempt at Arctic oil exploration through a deal with Russia’s Gazprom Neft, the Kremlin revealed on Thursday night.

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 Emily Gosden
By 7:54PM BST 04 Apr 2013

The companies are preparing to sign an agreement that will cover joint offshore drilling in the Russian Arctic as well as shale oil projects onshore in Western Siberia, it said.

The agreement will be announced next week when Russian President Vladimir Putin visits the Netherlands, where the Anglo-Dutch company is headquartered.

Gazprom Neft is the majority-owned, oil-focused arm of gas giant Gazprom, which is in turn majority-owned by the Russian state.

The deal comes just weeks after Shell was forced to delay its high-profile exploration campaign in the Alaskan Arctic for another year after a series of setbacks blighted its campaign in 2012.

The US Interior Secretary Ken Salazar said Shell had “screwed up” last year and has set a series of criteria the company must meet before it will be allowed to resume.

Shell has made no secret of its desire to expand further in Russia, where it already collaborates with Gazprom at the giant Sakhalin gas project offshore in the sub-Arctic of Eastern Siberia.

Last summer Shell chief executive Peter Voser said: “From a strategic point of view we are open to further investments in Russia and therefore are looking at opportunities either [in] oil or LNG. We have talked with the various players. Those talks include Gazprom.”

Russia has been courting international energy giants to help it exploit its vast oil and gas reserves, changing its tax regime to try to encourage inward investment.

State oil giant Rosneft has struck a series of deals with the likes of ExxonMobil, Statoil and ENI for Arctic exploration and last month confirmed it was also now looking at projects with BP, its 20pc shareholder.

Oil companies meanwhile are keen to secure access to the Arctic, where much of the world’s untapped oil reserves are believed to lie.

Gazprom Neft declined to comment, while Shell was not immediately available for comment.

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