# What's the SD on Russia and Shell? **URL:** \ **Category:** Factual Questions\ **Created:** [December 12, 2006, 7:37pm UTC](https://boards.straightdope.com/t/whats-the-sd-on-russia-and-shell/383854 "2006-12-12T19:37:28Z")\ **Posts on this page:** 4\ **Page:** 1
**Author:** ![Quartz](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/quartz/32/267_2.png) [@Quartz](https://boards.straightdope.com/u/Quartz)\ **Post date:** [December 12, 2006, 7:37pm UTC](https://boards.straightdope.com/t/whats-the-sd-on-russia-and-shell/383854/1 "2006-12-12T19:37:28Z")
[http://www.daybydaycartoon.com/2006/12/12/](http://www.daybydaycartoon.com/2006/12/12/) Today’s Day By Day cartoon[says that Russia has just siezed a $20 Bn gas refinery. The author is usually accurate as to facts, but I can’t find anything (my search-fu is severely lacking) about this; what’s the Straight Dope? ---
**Author:** ![Quartz](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/quartz/32/267_2.png) [@Quartz](https://boards.straightdope.com/u/Quartz)\ **Post date:** [December 12, 2006, 7:46pm UTC](https://boards.straightdope.com/t/whats-the-sd-on-russia-and-shell/383854/2 "2006-12-12T19:46:25Z")
That link might just be considered NSFW as it shows the cusp of a breast. ---
**Author:** ![Precambrianmollusc](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/precambrianmollusc/32/63_2.png) [@Precambrianmollusc](https://boards.straightdope.com/u/Precambrianmollusc)\ **Post date:** [December 12, 2006, 8:21pm UTC](https://boards.straightdope.com/t/whats-the-sd-on-russia-and-shell/383854/3 "2006-12-12T20:21:36Z")
Well seized may be too strong a word for it have a look here > **[Gazprom's Medvedev: Sakhalin-2 Deal with Shell 'Close'](https://www.rigzone.com/news/oil_gas/a/39033/gazproms_medvedev_sakhalin2_deal_with_shell_close/)** > > Russian gas monopoly Gazprom is close to a deal with Royal Dutch Shell to allow the state-owned natural gas giant to enter the Sakhalin-2 oil and gas venture, Gazprom board chairman Dmitry Medvedev said Tuesday. and here > **[Shell Makes Gazprom Offer on Sakhalin-2](https://www.rigzone.com/news/oil_gas/a/38971/shell_makes_gazprom_offer_on_sakhalin2/)** > > Royal Dutch Shell chairman Jeroen van der Veer has proposed new terms to Russian natural gas monopoly Gazprom to enter the US$20 billion Sakhalin-2 oil and gas development, a Gazprom spokesman said Monday. the UK guardian newspaper has a story here > **[$20bn gas project seized by Russia](https://www.theguardian.com/world/2006/dec/12/business.oil)** > > · Russia seizes control of world's biggest liquefied gas project · Shell forced to give up controlling stake after pressure from Kremlin So depending on your definition of seized, the story is mostly that Gazprom will be buying a controling interest in the Sakalin project (an island off the cost of Siberia over by Japan) The main stink over all this is that Shell and the Russain government signed a Production Sharing Areement, which would allow Shell to recoup the cost of construction before the Russian government got a sniff of royalties on the produced gas and condensate. The construction cost rose from 10 billion to 20 billion, so the Russians have missed out on royalties on 10 billion dollars of gas sales. i am not sure what the royalty rate in question is, but sure to be a chunk of change. The russian environmental agencies are alleging environmental damages, and claiming, no doubt coincidentaly , 10 billion in damages. So the russian gov through gazprom wants a controlling interest in the project , which it wil buy off of Shell, I suspect the pending environmental damages are a big negotiating stick and my WAG would be that they will disappear after gazprom get their interest. I doubt Shell want to sell any of the project, so the seized part could probably be rephrased as a forced sell at no doubt less than optimal pricing. Shell will probably remain there, operating the project, the wells are fairly technically challanging and the gas compression trains are not exactly simple devices, Gazprom may not have the in house capabilities to manage the project Cheers NBC ---
**Author:** ![Quartz](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/quartz/32/267_2.png) [@Quartz](https://boards.straightdope.com/u/Quartz)\ **Post date:** [December 12, 2006, 10:13pm UTC](https://boards.straightdope.com/t/whats-the-sd-on-russia-and-shell/383854/4 "2006-12-12T22:13:52Z")
Thanks. This looks to be nasty. I rather doubt many companies will be making significant investments in Russia from now on.