Shell unlikely to become owner of Russian LLC to which Sakhalin-2 stake will be transferred, but still studying presidential decree
MOSCOW. July 28 (Interfax) - Anglo-Dutch Shell (SPB: RDS.A) is unlikely to become the owner of the Russian limited liability company where all rights and obligations of Sakhalin Energy are to be transferred, Shell CEO Ben van Beurden said in a press conference.
"We have taken this decree under advisement. But the details are not yet completely clear. Let me say one thing while we are waiting for clarification. It's highly unlikely that we will become a member of a Russian legal entity to which our share in Sakhalin Energy may be transferred. It's not consistent with our intention to keep our assets in Russia. It creates a little bit more uncertainty about how exactly we will exit," he commented.
Sakhalin Energy Investment Company Ltd, the Bermuda-based operator of the Sakhalin-2 project being implemented under a production sharing agreement, will be replaced by a Russian LLC, according to a June decree from Russian President Vladimir Putin "On the application of special economic measures in the fuel and energy sector due to unfriendly actions of certain foreign states and international organizations." The current shareholders of Sakhalin Energy must agree within a month to receive a stake in the new Russian LLC. If the stake is not claimed by the foreign partner, it is subject to appraisal and sale by the government to a Russian legal entity. The foreigners can receive funds for their stake only after determination and crediting of compensation for the damage they incurred in the course of the project.
Sakhalin Energy is co-owned by Gazprom (50% plus 1 share), Anglo-Dutch Shell (27.5% minus 1 share) and Japan's Mitsui (12.5%) and Mitsubishi (10%).
Sakhalin-2 is developing the Piltun-Astokhskoye and Lunskoye fields on the Sakhalin shelf.
The Sakhalin-2 LNG plant in Prigorodnoye (southern Sakhalin) was put into operation in February 2009 and reached its full capacity of 9.6 million tonnes per year in 2010. Later on, the optimization program allowed for increasing its capacity by 20% up to 11.5 million tonnes of LNG per year.