UK markets open in 6 hours
  • NIKKEI 225

    28,716.86
    +169.88 (+0.60%)
     
  • HANG SENG

    20,175.62
    +93.22 (+0.46%)
     
  • CRUDE OIL

    91.88
    -0.21 (-0.23%)
     
  • GOLD FUTURES

    1,815.70
    +0.20 (+0.01%)
     
  • DOW

    33,761.05
    +424.35 (+1.27%)
     
  • BTC-GBP

    20,081.82
    -178.34 (-0.88%)
     
  • CMC Crypto 200

    582.60
    +11.32 (+1.98%)
     
  • ^IXIC

    13,047.19
    +267.29 (+2.09%)
     
  • ^FTAS

    4,149.90
    +18.64 (+0.45%)
     

Russia's swoop on Sakhalin-2 gas plant threatens to push out big stakeholder Shell

  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
·2-min read
In this article:
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
putin
Russian president Vladimir Putin moved to seize the Sakhalin-2 liquified natural gas project Thursday.REUTERS//Kremlin
  • Russian president Vladimir Putin moved to seize the Sakhalin-2 natural gas project Thursday.

  • Shell holds a 27.5% stake in the facility, located in the far east of Russia.

  • Putin's latest move could push out Shell and other foreign stakeholders Mitsui and Mitsubishi.

Russian president Vladimir Putin has moved to seize control of the Sakhalin-2 oil and gas project, threatening to push out major foreign players including Shell.

A Kremlin statement demanded that the rights to the offshore facility, which includes Russia's first liquefied natural gas (LNG) plant, be transferred to a new Russian company within 30 days. Stakeholders who don't take a stake in the new company may not be fully compensated, the statement said.

Putin is moving to take control of Russia's oil-and-gas facilities as Western nations impose a wide range of sanctions on Russian energy.

Shell holds a 27.5% stake in Sakhalin-2, but announced it would exit the project after Russia invaded Ukraine in February.

"As a shareholder, Shell has always acted in the best interests of Sakhalin-2 and in accordance with all applicable legal requirements," a Shell spokesman said. "We are aware of the decree and are assessing its implications."

A majority of the gas produced at Sakhalin-2 supplies Japan, and trading houses Mitsui and Mitsubishi own a combined 22.5% stake in the project. While Japan has imposed sanctions on Russia since Putin's invasion, its prime minister said in March that the country does not intend to withdraw from Sakhalin-2.

"Our interest must not be undermined," Japan's deputy chief cabinet secretary, Seiji Kihara, said in a Friday briefing addressing Putin's seizure of the oil-and-gas facility.

Shell shares slipped 0.6% after the Kremlin issued its decree. Mitsui and Mitsubishi plunged 5.5% and 5.4% respectively in Japanese trading hours.

Read more: What does Russia invading Ukraine mean for markets? 13 investing experts share their outlook on the Fed's likely response, short- and long-term trades, and whether bitcoin can ever become a 'safe-haven' asset

Read the original article on Business Insider

Our goal is to create a safe and engaging place for users to connect over interests and passions. In order to improve our community experience, we are temporarily suspending article commenting