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Shell becomes Gazprom’s partner on Russia’s Arctic shelf

April 09, 2013, 10:32 UTC+3

On Monday the sides signed the relevant memorandum

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Russia’s gas giant Gazprom found a strategic partner in the fight for Russia’s Arctic shelf against Rosneft that actively develops its alliance with ExxonMobil. In retort the gas monopoly secured support of Anglo-Dutch oil giant Shell. On Monday the sides signed the relevant memorandum. In partnership mechanisms Gazprom has fully borrowed the scheme well-tested by Rosneft a foreign investor gets one third in the project and in exchange let the Russian investor into its fields abroad.

On Monday during Russian President Vladimir Putin’s visit to the Netherlands Gazprom CEO Alexei Miller and Royal Dutch Shell Chairman Jorma Ollila signed a memorandum on joint exploration and development of Russia’s Arctic shelf and deep sea drilling abroad, the Kommersant business daily wrote. According to Russia’s Natural Resources Ministry, companies plan to develop the Severo-Vrangelevsky field in the Chukchi Sea and the Severo-Zapadny field in the Pechora Sea. Gazprom does not own licenses for these deposits yet, but Russia’s federal agency for subsoil use (Rosnedra) is expected to issue them until May 1.

Under the memorandum Shell will get a 33.3 percent stake in the Russian project and will undertake basic expenditures on geological surveying. If a final agreement is signed, Gazprom will get a similar stake and undertake obligations in the partner’s offshore projects, possibly Shell’s projects in South Africa.

Kommersant recalled that in Russia Gazprom and Shell have already acted as partners on the Sakhalin-2 oil and gas development project, which incorporates the country’s only LNG plant with the annual throughput of 10 million tonnes.

Shell confirmed its loyalty to Gazprom, declining to create an alliance with Russia’s state oil giant Rosneft that in 2011 after disruption of a global cooperation agreement with BP had searched to replace the latter in the deal and the sides had conducted talks. At present, the partner, in fact, should help Gazprom to resist gas ambitions of Rosneft that were loudly declared soon after Deputy Prime Minister in Vladimir Putin’s Cabinet Igor Sechin had become president of the state-run company last May.


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