Russia demands more than $1 billion in compensation from British oil major
Russia is pursuing over $1 billion in damages from Shell due to an unsuccessful energy project. Read Full Article at RT.com.
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Shell exited the Sakhalin-2 LNG joint venture in Russia’s Far East in 2022.
The Russian Prosecutor General’s office is pursuing over €1 billion in damages from UK-based energy giant Shell due to a failed joint venture, as announced by the Moscow Arbitration Court on Tuesday.
Shell withdrew from the Sakhalin-2 liquefied natural gas project in 2022 after the onset of the Ukraine conflict. This significant oil and gas development located on Sakhalin Island is home to Russia's first LNG plant.
Earlier this month, a lawsuit was filed by Russia’s Prosecutor General against eight subsidiaries of the Anglo-Dutch energy company, as reported on the court’s website. The subsidiaries involved are Shell plc, Shell Energy Europe Limited, Shell Global Solutions International B.V., Shell International Exploration & Production B.V., Shell Neftegaz Development, Shell Exploration & Production Services B.V., Shell Sakhalin Services B.V., and Shell Sakhalin Holdings B.V.
“They are seeking more than €1 billion in damages,” the court’s press service informed RIA Novosti when inquired about the lawsuit.
The court filing also named Gazprom Export, the Russian Energy Ministry, the Sakhalin Region government, as well as Sakhalin Energy Investment and Sakhalin Energy companies as third parties.
In 2022, Russian President Vladimir Putin signed a decree assigning the assets of Sakhalin Energy, the original operator of Sakhalin-2, to a new operator based in Russia, Sakhalin Energy LLC. The government permitted foreign owners, including Japanese companies Mitsui and Mitsubishi, to maintain a stake in the new entity proportionate to their previous shares.
The two Japanese firms opted to keep their stakes in the LNG project and agreed to transfer their respective 12.5% and 10% holdings to the new operator. However, Shell, which held a 27.5% stake minus one share in Sakhalin Energy, declared it would not invest in the new entity, leading Moscow to sell its share.
In March, Gazprom's subsidiary, Sakhalin Project, acquired Shell’s stake for 94.8 billion rubles, increasing its ownership in the project to 77.5%.
While the funds were intended to be transferred to Shell for its stake in Sakhalin-2, they are reportedly to be frozen in a so-called ‘Type S’ account, as indicated by Kommersant daily. Russia established these accounts early in the Ukraine conflict as a response to Western sanctions, primarily to prevent the outflow of funds by entities from “unfriendly nations.”
Camille Lefevre for TROIB News
The Russian Prosecutor General’s office is pursuing over €1 billion in damages from UK-based energy giant Shell due to a failed joint venture, as announced by the Moscow Arbitration Court on Tuesday.
Shell withdrew from the Sakhalin-2 liquefied natural gas project in 2022 after the onset of the Ukraine conflict. This significant oil and gas development located on Sakhalin Island is home to Russia's first LNG plant.
Earlier this month, a lawsuit was filed by Russia’s Prosecutor General against eight subsidiaries of the Anglo-Dutch energy company, as reported on the court’s website. The subsidiaries involved are Shell plc, Shell Energy Europe Limited, Shell Global Solutions International B.V., Shell International Exploration & Production B.V., Shell Neftegaz Development, Shell Exploration & Production Services B.V., Shell Sakhalin Services B.V., and Shell Sakhalin Holdings B.V.
“They are seeking more than €1 billion in damages,” the court’s press service informed RIA Novosti when inquired about the lawsuit.
The court filing also named Gazprom Export, the Russian Energy Ministry, the Sakhalin Region government, as well as Sakhalin Energy Investment and Sakhalin Energy companies as third parties.
In 2022, Russian President Vladimir Putin signed a decree assigning the assets of Sakhalin Energy, the original operator of Sakhalin-2, to a new operator based in Russia, Sakhalin Energy LLC. The government permitted foreign owners, including Japanese companies Mitsui and Mitsubishi, to maintain a stake in the new entity proportionate to their previous shares.
The two Japanese firms opted to keep their stakes in the LNG project and agreed to transfer their respective 12.5% and 10% holdings to the new operator. However, Shell, which held a 27.5% stake minus one share in Sakhalin Energy, declared it would not invest in the new entity, leading Moscow to sell its share.
In March, Gazprom's subsidiary, Sakhalin Project, acquired Shell’s stake for 94.8 billion rubles, increasing its ownership in the project to 77.5%.
While the funds were intended to be transferred to Shell for its stake in Sakhalin-2, they are reportedly to be frozen in a so-called ‘Type S’ account, as indicated by Kommersant daily. Russia established these accounts early in the Ukraine conflict as a response to Western sanctions, primarily to prevent the outflow of funds by entities from “unfriendly nations.”
Camille Lefevre for TROIB News
