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Will an Emboldened Russia Hurt Shell and Chevron?

Screen Shot 2014-03-04 at 17.39.57Extracts from an article by Reuben Brewer published on 23 March 2014 by The Motley Fool under the headline: Will an Emboldened Russia Hurt This Major Industry?

Russia is a complex beast and is often hard for Western nations to understand. The latest bit of world drama that the country has caused is, effectively, making Crimea part of Mother Russia again. It’s a move that could lead to sanctions against this giant, natural resource-rich nation. This whole event could cause more pain than you may expect in the international oil and gas space. Chevron inked a $10 billion deal with Ukraine to explore for shale gas in late 2013. Royal Dutch Shell made a similarly sized agreement with the country in early 2013. Both deals have 50-year terms. Clearly, Russia taking over part of Ukraine is a less than auspicious start to these deals, which have another five decades or so left to go. Shell isn’t sitting pat; the company pulled out of talks over an offshore gas drilling deal early this year. While that helps to reduce the company’s exposure to a region in turmoil, the 50 year shale drilling contract keeps Shell on the firing line.

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