Shell looks to acquire Sakhalin-3 stake through asset swap

In an attempt to consolidate its presence in Russia’s oil and gas sector, Royal Dutch Shell has opened discussion with Gazprom about the possibility of swapping one of its international energy assets for a stake in the Russian company’s Sakhalin-3 oil and gas development in the North-West Pacific.
“Russia is sitting on 25% of the world’s gas reserves and is very, very close to markets that we are very familiar with,” Shell Chief Executive Officer Ben Beurden said last week.  Despite the slump in oil prices, both BP  and Total are also seeking more access to Russia as the country’s low-cost output and proximity to Asian markets as they seek to add reserves to sustain future output. Russia has the fifth-biggest oil deposits and costs that are as much as two-thirds below  those incurred elsewhere – $5,66 compared to $14.74m, according to data compiled by Bloomberg. 
“There are less and less world class assets that can be operated at such a low price environment,”  BDO Director Simon Leathers said. “That’s where Russia represents such an opportunity.”


Source: Bloomberg