Russian Prosecutor General’s office initiates legal proceedings against British energy giant Shell
Date
10/19/2024 12:56:11 AM
(MENAFN) The Russian Prosecutor General’s office has initiated legal proceedings against the British energy giant Shell, demanding over EUR1 billion (approximately $1.09 billion) in damages related to a failed joint venture. This development was reported by the Moscow Arbitration Court on Tuesday, highlighting ongoing tensions in the energy sector following geopolitical conflicts.
Shell's exit from the Sakhalin-2 liquefied natural gas (LNG) project in 2022 marked a significant shift in the energy landscape. The decision came in the wake of the Ukraine conflict, which prompted many international firms to reassess their investments in Russia. The Sakhalin-2 project is notable as it encompasses Russia’s first LNG plant and is located on Sakhalin Island in the country’s Far East.
In the latest legal maneuver, the Russian Prosecutor General has filed a lawsuit against eight subsidiaries of the Anglo-Dutch energy corporation. These include Shell plc, Shell Energy Europe Limited, Shell Global Solutions International B.V., Shell International Exploration & Production B.V., Shell Neftegaz Development, Shell Exploration & Production Services B.V., Shell Sakhalin Services B.V., and Shell Sakhalin Holdings B.V. The court’s press service confirmed to RIA Novosti that the damages sought exceed EUR1 billion.
The legal case also involves third parties such as Gazprom Export, the Russian Energy Ministry, the government of Sakhalin Region, and entities associated with Sakhalin Energy, including Sakhalin Energy Investment and Sakhalin Energy companies.
In a significant move in 2022, Russian President Vladimir Putin signed a decree that transferred the assets of Sakhalin Energy, the previous operator of the Sakhalin-2 project, to a newly established, Russia-based operator named Sakhalin Energy LLC. The government has permitted foreign stakeholders, including Japanese firms Mitsui and Mitsubishi, to retain stakes in the new operator, proportional to their previous holdings.
As these legal and operational challenges unfold, the situation underscores the complexities and risks faced by international companies in the Russian energy market, particularly in the context of heightened geopolitical tensions and shifting regulatory landscapes.
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