Yahoo Finance Russia's swoop on Sakhalin-2 gas plant threatens to push out big stakeholder Shell
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 the original article on Business Insider
