Thread: How dangerous is Vladimir Putin?

^ From what he said...

TOKYO/LONDON, July 1 (Reuters) - President Vladimir Putin has raised the stakes in an economic war with the West and its allies with a decree that seizes full control of the Sakhalin-2 gas and oil project in Russia's far east, a move that could force out Shell and Japanese investors.

The order, signed on Thursday, creates a new firm to take over all rights and obligations of Sakhalin Energy Investment Co, in which Shell (SHEL.L) and two Japanese trading companies Mitsui and Mitsubishi hold just under 50%. read more

The five-page decree, which follows Western sanctions imposed on Moscow over its invasion of Ukraine, indicates the Kremlin will now decide whether the foreign partners can stay.

State-run Gazprom (GAZP.MM) already has a 50% plus one share stake in Sakhalin-2, which accounts for about 4% of the world's liquefied natural gas (LNG) production.

The move threatens to unsettle an already tight LNG market, although Moscow said it saw no reason for Sakhalin-2 deliveries to stop. Japan imports 10% of its LNG each year from Russia, mainly under long-term contract from Sakhalin-2. The action also raises the risks facing Western companies still in Russia.

"Russia's decree effectively expropriates foreign stakes in the Sakhalin Energy Investment Company, marking a further escalation in ongoing tensions," said Lucy Cullen, a principal analyst from consultancy Wood Mackenzie.

Many Western firms have already packed up, while others have said they would quit, but Putin's move adds complications to an already complex process for those looking for the exit. Moscow has been preparing a law, expected to pass soon, to allow the state to seize assets of Western firms which decide to go.

Shell, which has already written off the value of its Russian assets, made clear months ago it intended to quit Sakhalin-2 and has been in talks with potential buyers. It said on Friday it was assessing the Russian decree.

Sources have said Shell believed there was a risk Russia would nationalise foreign-held assets, while Putin has repeatedly said Moscow would retaliate against the United States and its allies for freezing Russian assets and other sanctions.

Sakhalin-2, in which Shell has a 27.5% minus one share stake, is one of the world's largest LNG projects with output of 12 million tonnes. Its cargoes mainly head to Japan, South Korea, China, India and other Asian countries.
MAKING PREPARATIONS

Kremlin spokesman Dmitry Peskov said Russia saw no grounds for halting LNG deliveries from Sakhalin-2 and said the future of other projects or investments would be determined case by case.

"There can be no general rule here," he said.
Japan, which depends heavily on imported energy, has said it would not give up its interests in Sakhalin-2, in which Japan's Mitsui has a 12.5% stake and Mitsubishi holds 10%.

Japanese Prime Minister Fumio Kishida said on Friday that Russia's decision would not immediately stop LNG imports from the development, while Japan's Industry Minister Koichi Hagiuda said the government did not consider the decree a requisition.

"The decree does not mean that Japan's LNG imports will become immediately impossible, but it is necessary to take all possible measures in preparation for unforeseen circumstances," Hagiuda told reporters.

Japan has 2-3 weeks of LNG stocks held by utilities and city gas suppliers and Hagiuda has asked his U.S. and Australian energy counterparts for alternative supplies, he said.

According to the decree, Gazprom keeps its stake but others must ask the Russian government for a stake in the new firm within one month. The government will decide whether to approve any request.

Gazprom, Sakhalin Energy and the Russian energy ministry did not respond to requests for comment.
A Mitsubishi spokesperson said the company was discussing with partners in Sakhalin and Japan's government about how to respond to the decree. Mitsui did not comment immediately.

Shares in Mitsui & Co (8031.T) and Mitsubishi Corp (8058.T) slid more than 5% on Friday. Shell's shares edged higher.
Shell Chief Executive Ben van Beurden said on Wednesday the company was "making good progress" in its plan to exit from the Sakhalin Energy joint venture without giving details.

Sources had told Reuters in May that Shell was in talks with an Indian consortium to sell its stake. read more
Russian LNG production from projects such as Sakhalin-2 was likely to suffer as foreign expertise and parts became unavailable, said Saul Kavonic, head of Integrated Energy and Resources Research at Credit Suisse.
"This will tighten the LNG market materially this decade," he said.

^
Shell announces intent to withdraw from Russian oil and gas


Mar 8, 2022


"Shell plc (Shell) today announced its intent to withdraw from its involvement in all Russian hydrocarbons, including crude oil, petroleum products, gas and liquefied natural gas (LNG) in a phased manner, aligned with new government guidance. As an immediate first step, the company will stop all spot purchases of Russian crude oil. It will also shut its service stations, aviation fuels and lubricants operations in Russia"

Continues:

Shell announces intent to withdraw from Russian oil and gas | Shell Global

Update.

Russia seizes control of Sakhalin gas project, raises stakes with West

By Yuka Obayashi

, Emily Chow and Ron Bousso

July 1, 202211:45 PM GMT+7

• Putin signed decree to secure all rights on Thursday
• Five-page decree follows tightening Western sanctions
• Move raises risks for Western firms still in Russia
• Shell was already in talks to sell up Sakhalin stake

TOKYO/LONDON, July 1 (Reuters) -

"President Vladimir Putin has raised the stakes in an economic war with the West and its allies with a decree that seizes full control of the Sakhalin-2 gas and oil project in Russia's far east, a move that could force out Shell and Japanese investors.

The order, signed on Thursday, creates a new firm to take over all rights and obligations of Sakhalin Energy Investment Co, in which Shell (SHEL.L) and two Japanese trading companies Mitsui and Mitsubishi hold just under 50%. read more

The five-page decree, which follows Western sanctions imposed on Moscow over its invasion of Ukraine, indicates the Kremlin will now decide whether the foreign partners can stay.

State-run Gazprom (GAZP.MM) already has a 50% plus one share stake in Sakhalin-2, which accounts for about 4% of the world's liquefied natural gas (LNG) production.

The move threatens to unsettle an already tight LNG market, although Moscow said it saw no reason for Sakhalin-2 deliveries to stop. Japan imports 10% of its LNG each year from Russia, mainly under long-term contract from Sakhalin-2. The action also raises the risks facing Western companies still in Russia.

"Russia's decree effectively expropriates foreign stakes in the Sakhalin Energy Investment Company, marking a further escalation in ongoing tensions," said Lucy Cullen, a principal analyst from consultancy Wood Mackenzie.

Many Western firms have already packed up, while others have said they would quit, but Putin's move adds complications to an already complex process for those looking for the exit. Moscow has been preparing a law, expected to pass soon, to allow the state to seize assets of Western firms which decide to go.

Shell, which has already written off the value of its Russian assets, made clear months ago it intended to quit Sakhalin-2 and has been in talks with potential buyers. It said on Friday it was assessing the Russian decree.

Sources have said Shell believed there was a risk Russia would nationalise foreign-held assets, while Putin has repeatedly said Moscow would retaliate against the United States and its allies for freezing Russian assets and other sanctions.

Sakhalin-2, in which Shell has a 27.5% minus one share stake, is one of the world's largest LNG projects with output of 12 million tonnes. Its cargoes mainly head to Japan, South Korea, China, India and other Asian countries.

MAKING PREPARATIONS

Kremlin spokesman Dmitry Peskov said Russia saw no grounds for halting LNG deliveries from Sakhalin-2 and said the future of other projects or investments would be determined case by case.

"There can be no general rule here," he said.

Japan, which depends heavily on imported energy, has said it would not give up its interests in Sakhalin-2, in which Japan's Mitsui has a 12.5% stake and Mitsubishi holds 10%.

Japanese Prime Minister Fumio Kishida said on Friday that Russia's decision would not immediately stop LNG imports from the development, while Japan's Industry Minister Koichi Hagiuda said the government did not consider the decree a requisition.

"The decree does not mean that Japan's LNG imports will become immediately impossible, but it is necessary to take all possible measures in preparation for unforeseen circumstances," Hagiuda told reporters.

Japan has 2-3 weeks of LNG stocks held by utilities and city gas suppliers and Hagiuda has asked his U.S. and Australian energy counterparts for alternative supplies, he said.

According to the decree, Gazprom keeps its stake but others must ask the Russian government for a stake in the new firm within one month. The government will decide whether to approve any request.
Gazprom, Sakhalin Energy and the Russian energy ministry did not respond to requests for comment.

A Mitsubishi spokesperson said the company was discussing with partners in Sakhalin and Japan's government about how to respond to the decree. Mitsui did not comment immediately.

Shares in Mitsui & Co (8031.T) and Mitsubishi Corp (8058.T) slid more than 5% on Friday. Shell's shares edged higher.

Shell Chief Executive Ben van Beurden said on Wednesday the company was "making good progress" in its plan to exit from the Sakhalin Energy joint venture without giving details.
Sources had told Reuters in May that Shell was in talks with an Indian consortium to sell its stake.

Russian LNG production from projects such as Sakhalin-2 was likely to suffer as foreign expertise and parts became unavailable, said Saul Kavonic, head of Integrated Energy and Resources Research at Credit Suisse.

"This will tighten the LNG market materially this decade," he said."

https://www.reuters.com/business/ene...es-2022-07-01/

What does the decree say?

"The presidential order creates a new Russian firm to take over all the rights and obligations of Sakhalin Energy Investment.

Gazprom will retain its stake while the other partners have one month to indicate whether they want a share in the new company.

If permission is denied by the Russian government, the stakes would be divested and the proceeds from the sale would be moved to a special account.

The money could then be used to repay unspecified damages or be sent to the shareholder under the production sharing agreement, according to the decree. Those who chose to exit may not be fully compensated."

https://www.rt.com/business/558205-sakhalin-project-russia-west/

One suspects any payments due to foreign shareholders, to their "special accounts", will be in ₽.

Similarly, for future LNG orders, from "unfriendly countries".

Unless, more "friendly countries", offer more acceptable prices.

Oh, the majority of the World cares about it's energy and food security as much as the self styled 'international community'. Pity that the 'international community' is wholesale losing it's stranglehold on these markets though, innit? Not.

Brand new apartments already under construction in Mariupol. 2500 will be built by September. They are free for affected residence

Originally Posted by malmomike77

BP and Shell have already made their money and written it off.

1. Push for accelerated phase out of fossil fuel dependency, switch to renewables/nuclear. - check
2. Wake up the EU states from their NATO obligation slumber - check
3. Formerly neutral countries join NATO - check
4. NATO commitment strengthened - check
5. Ukraine moves further away from Russia - check
6. Russia loses all economic friemds aside from China and India - check
7. Russia isolates itself on a global stage - check
8. Russian people have a generation of what its like to live back in the 70's - check
9. Russia loses any idea of conventional military superiority and is left threatening the world with Nukes - check
10. Russia now has to suck off Xi's teat -Check.

You claim:

BP and Shell have already made their money and written it off.

"Written it off" as a loss?.

Who have they sold their "investment" to?

There are "unfinished discussions" I read. Any contracts agreed, signed and purchased yet?

I suspect ongoing access to gas/oil resources is more valuable than plant building contracts.

1. Push for accelerated phase out of fossil fuel dependency, switch to renewables/nuclear. - check

They have promised too many things and broken their promises.

What have they delivered - more coal-fired powers station usage.

Returning to nuclear? When will these be producing electricity for their citizens?

2. Wake up the EU states from their NATO obligation slumber - check

Possibly awakened, what have they delivered to solve their problems? When will they be equipped to protect their citizens?

(See an opinion of NATOS current problems below post:#5895 (How dangerous is Vladimir Putin?))

Turkey, NATO joined at hips but think differently

3. Formerly neutral countries join NATO - check

What do those newly accepted countries bring to enhance NATO?

4. NATO commitment strengthened - check

How will NATO countries finance their new "promises to deliver" their "strengthening" ?

5. Ukraine moves further away from Russia - check

Yet to be delivered. Who will deliver it to their new land, where will the new Ukraine be situated?

6. Russia loses all economic friemds aside from China and India - check

The "west", 16% of the world's citizens are/were friends of Russia? The other 84% of the world's citizens are moving to Russia of NaGaStan + vassals?

7. Russia isolates itself on a global stage - check

Russia has been banned from the "western" stage by the 16%. Russia and others have and are accelerating many alternatives to the 16% cliques.

8. Russian people have a generation of what its like to live back in the 70's - check

Most of which enjoy living in Russia and according to Russian polling, 80+ % back the Russian government.

9. Russia loses any idea of conventional military superiority and is left threatening the world with Nukes - check

Russia is proving you wrong and proceeding at their pace, so far.

10. Russia now has to suck off Xi's teat -Check

Russia has growing financial power, trade partners, balance of trade .... , as opposed to the 16% and is being joined by those countries who wish to accompany them to a better destination.