Royal Dutch Shell and Russia's Gazprom have signed a co-operation agreement that will see them exploring for more oil together in western Siberia and the far east of Russia.
As part of the deal, Shell has agreed to let Gazprom share some of its overseas projects in return for Shell being allowed to develop the third and fourth stages of the Sakhalin project in Sakhalin Island, Russia. Sakhalin 3 alone contains 1.4 trillion cubic metres of gas.
Shell pioneered the development of liquefied natural gas in Russia as operator of Sakhalin 2, only to be pressured by the Kremlin to cede a majority share to Gazprom following a bitter dispute at the end of 2006.
The co-operation agreement therefore marks a significant step in the improvement of relations between the two companies.
Commenting on the agreement, Alexey Miller, chairman of Gazprom, said: “This agreement is a vivid example of the mutually beneficial development of strategic partnership between the world’s largest energy companies. Ahead of us, we have new large-scale projects and growing joint presence in new markets.”
Peter Voser, Shell’s CEO, added: “This underscores the strong partnership our companies have built in recent years. 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.”
With Gazprom keen to increase its presence on the international stage, it is thought that future deals between the two companies could even take the form of asset swaps.
The arrangement will also allow Gazprom to reduce its dependence on selling gas via pipeline to Europe, where demand is falling, and help it to target emerging markets; as well as enabling Gazprom to better develop its technical expertise.
Shell already has agreements in place with other overseas oil companies, including China National Petroleum Corporation.
Headquartered in The Hague, Shell has operations in more than 90 countries with businesses including oil and gas exploration and production; production and marketing of liquefied natural gas and gas to liquids; manufacturing, marketing and shipping of oil products and chemicals and renewable energy projects.
