UK supermajor Shell has taken a step towards securing an orderly exit from the Salym oil development in Russia’s Western Siberia but its chances of booking compensation for the loss of its shareholding in the Sakhalin 2 development remain slim.
Earlier this week, a regional court sitting in Moscow upheld a request by a subsidiary of state-controlled oil producer Gazprom Neft to allow Shell to transfer its 50% share in the West Siberian oil-producing venture Salym Petroleum Development (SPD).
The subsidiary, identified as GPN Salymskiye Proyekty, had accused Shell of undermining SPD’s financial stability by refusing oil cargo nominations from the venture.
The subsidiary obtained a temporary court order that restricted Shell’s shareholder rights in SPD, including disposal of its stake in the venture.
In early December, however, GPN Salymskiye Proyekty requested the court’s legal permission for Shell to transfer its stake in SPD to another Gazprom Neft subsidiary, identified as GPN Middle East Projects.
This week, the court said only that it decided to uphold the request from GPN Salymskiye Proyekty, withholding offering details of the final ruling.
According to a disclosure on the court’s website, the full text of the decision will not be published.
Shell said that it was unable to provide any comment on the SPD case.
In May, the company said it booked a $3.9 billion loss after deciding to withdraw from Russian assets following the invasion of Ukraine in February.
Shell’s other valuable asset in Russia was its 27.5% share in the country’s first liquefied natural gas development, Sakhalin 2.
Responding to Shell’s decision to withdraw from Russia, President Vladimir Putin ordered the effective confiscation of Sakhalin 2 assetsand their transfer to a newly created operator.
Shell rejected a Russian offer to return to the Sakhalin 2 consortium under the new Russian-registered operator.
After an audit, Russian authorities valued Shell’s stake in Sakhalin 2 at 94.8 billion rubles ($1.46 billion), but mentioned deductions to compensate for Shell’s abrupt exit.
Russian officials have said that Shell's stake in Sakhalin 2 was offered to Novatek, the Russian independent that has a controlling stake the Yamal LNG project.
This week, Moscow business daily Kommersant quoted unnamed governmental officials saying Novatek would be unable to meet terms to buy the 27.5% stake in Sakhalin 2 by a government-imposed deadline of 30 December.
Novatek said earlier that it was conducting its own audit of Sakhalin 2, with its executive board chairman Leonid Mikhelson saying it will refuse to pay “the price [for the stake] if it believes it is not fair”.
The deadline may be moved to the end of the first quarter of 2023, Kommersant suggested.
Novatek has not responded to a request from Upstream to confirm or clarify any continuing interest in entering a new Sakhalin 2 consortium.
Novatek and Gazprom have never partnered in an upstream project in Russia despite the pair signing several mutual co-operation memos.
Commentators on the Russian oil sector consider the two companies competitors with diverging interests and contracting project management practices.
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