Russia’s heist of Shell’s $20 billion oil project makes it a pariah state for foreign investors – just like the EU.
Foreign energy companies will be welcome in future as subcontractors but not as owners in Russia’s energy industry, the Kremlin signalled yesterday as Gazprom moved closer towards wresting control of Sakhalin-2, the giant Siberian gas project, from Royal Dutch Shell.
The Russian gas giant confirmed that Shell had made a new proposal in negotiations over Gazprom’s participation in Sakhalin Energy, the company building a $20 billion (£10.2 billion) liquefied natural gas scheme in Eastern Siberia.
Here’s how they did it (WSJ, $):
Connoisseurs of Russian black humor can appreciate the methods used to wrest control of the Sakhalin-2 project from the Dutch-British energy giant. In recent months, local authorities went after the company for “unauthorized tree felling” and other environmental and labor violations — finding about 100 in all.
Last week, the Natural Resources Ministry threatened to pull permits needed to proceed with the exploration work over allegedly misused water permits. This is the same Russia whose environmental record includes Chernobyl and the dry Aral Sea, among other offenses.
The EU just used similar extra-legal trickery to shutter a Brit company.
So it seems the EU, rather than declining into an Islamic dump, will become a province of Russia. Schroeder, the last German Chancellor, seems to think so.
For the rest of us, the message is clear – stay away.