Russian Decree Alters Ownership of Sakhalin II Project Involving Shell
What happened
A decree signed by President Vladimir Putin on June 30, 2022, fundamentally altered the ownership arrangements of the Sakhalin II oil and liquefied natural gas project. The decree required foreign shareholders to seek Russian government approval to obtain equivalent interests in a replacement operating company. Shell formally objected to the transfer of the original operator’s assets and rights, while Mitsui and Mitsubishi accepted the new arrangements.
Why it matters
The decree established a mechanism through which the Russian state could control continued participation and asset disposal. It also contained a provision allowing Russia to investigate alleged damage caused by foreign shareholders and deduct compensation from their unclaimed interests.
Who's involved
Who could feel it
Possible knock-on effectsThese are possibilities Brind reasoned out, not predictions, and not advice. Most are not stated in any report.
- ShellSpeculative
Shell might face changes in revenue or costs related to its participation in the Sakhalin II project due to the new Russian government controls.