Gazprom and Shell put differences aside with new cooperation pact

RUSSIA’s state-run gas firm Gazprom and Royal Dutch Shell yesterday signed an agreement to work together – despite an acrimonious dispute over the Sakhalin-2 field.

The two gas giants have now agreed to cooperate on exploring for oil in western Siberia and Russia’s Far East, as well as on distribution projects in Europe.

Only four years ago Russia forced Shell to cede control of its $22bn (£14bn) field, Sakhalin-2, to Gazprom. Shell was pressured about environmental issues and budget overruns until it agreed to give up most of its stake, leaving it with 27.5 per cent. But now the two firms are back on good terms.

As part of the deal Shell has agreed to let Gazprom share some of its projects abroad if it is allowed to help develop the third and fourth stages of the Sakhalin project.

Gazprom deputy chief executive Alexander Medvedev said: “We are happy to invite foreign partners to develop our upstream reserves, but only if in exchange we get the access to their first class projects somewhere in the world. We do know Shell has good assets, which could be of interest for us.”

Peter Voser, chief executive of Shell, said: “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.”