Sakhalin Island (part 3) Nervous as Shell

Posted by Bill Belew on June 18th, 2006 in Asia, Russia | No Comments

When Shell started shelling out mega bucks to drill for oil off the coast of Sakhalin island, Russia wasn’t one of the global oil suppliers. Russia is now.

It is just plain costing too much for Shell to get the oil out of the icy water in the sea of Okhotsk.

So…Shell has teamed up with Russia’s Giant Gazprom.

Gazprom will get a share of whatever they find in the sea of Oshkosh and Shell gets a 50% stake in a Gazprom field in western Siberia.

The relationship with Gazprom is supposed to give Shell some political protection but it doesn’t always turn out that way when doing business with Russias big guns. For whatever reason, they sometimes just change their minds.

Executives at Shell are nervous as shell, say some.

But, what choice does Shell have. The aim is to have first-mover advantage once the oil starts coming.

But, is it worth the risk?

What do you think?


 

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  1. panasianbiz says

    June 22, 2006

    Dang it! when did they move that sea to Wisconsin?

    Now, I am missing something.

    Thanks, Dan…I should have looked up the spelling on that one.

    Reply
  2. China Law Blog says

    June 22, 2006

    I think Oshkosh is in Wisconsin, where, as far as I know, there is little to no oil.

    Reply