Shell does not want to sign a new contract with Sakhalin Energy

Alexey Gromov, Principal Director on Energy Studies of the Institute for Energy and Finance, commented to the Business FM radio station about Shell's refusal to sign a contract with Sakhalin Energy:

“Given the recent decisions taken by the Russian government regarding the fact that companies from unfriendly countries until the end of this year have not the right to sell their shares in Russian assets, I assume that Shell will not be able to sell its stake in open market conditions. In this situation, I assume that the company will insist that everything be carried out within the framework of international law. Taking into account the fact that Shell considers Russia's decision that the Sakhalin-2 PSA ceases to be a PSA as such by decision of the Russian authorities to be illegitimate, and will seek satisfaction of its interests in the courts. Incidentally, the company's leaders themselves have recently been declaring this. If we talk about the Japanese, who really care about Sakhalin LNG, not only because of the volume of supplies, but primarily because of the prices that are specified in the contracts for LNG supplies to Mitsubishi and Mitsui, the Japanese will remain in the project. They will be asked to keep their shares as they were, it’s just that the shares will no longer be in the PSA, but in the relevant jurisdiction of Russia, as it is now called, Sakhalin Energy LLC, this is the second. And finally, the third: I assume that Shell's share is unlikely to be redistributed among the participants, most likely, it will either be under the state control of the Russian Federation, or will be offered to Gazprom as the dominant shareholder in this project.”