Business | Oil & Gas
Shell set to buy big stake in Sibir as it expands in Russia
Royal Dutch Shell is poised to take a large stake in its Russian partner company Sibir Energy before the end of this year, the Financial Times reported on Wednesday.
- Reuters
- Published: 00:07 October 2, 2008
Moscow: Royal Dutch Shell is poised to take a large stake in its Russian partner company Sibir Energy before the end of this year, the Financial Times reported on Wednesday.
Russia-focused London-listed Sibir, Shell's partner in Siberia-based Salym Petroleum Development (SPD), a 50/50 joint venture, said in August it was in talks with Shell about a deal which would expand Shell's business in Russia.
Equity swap deal
British media have reported the deal might involve Shell swapping its stake in the SPD for an equity holding in Sibir.
The Financial Times quoted a source close to the negotiations as saying Sibir was likely to take full control of SPD, which develops three deposits in West Siberia producing 133,000 barrels per day (bpd) of oil.
Shell was not immediately available for comment. Sibir declined to comment.
Sibir on Tuesday reported strong financial results for the first half of 2008 with net profit soaring 166 per cent to a record $238.5 million as production doubled to 88,000 bpd.
Sibir assets include Moscow Oil and Gaz Company, which controls the Moscow refinery with processing capacity of 25,000 bpd.
Shell has been trying to improve its position in Russia, after it had to cede control in major offshore project Sakhalin 2 to state-controlled Gazprom last year.
Shell now owns 27.5 per cent of Sakhalin 2.
Apart from Sakhalin 2 and SPD, Shell also plans to develop heavy oil deposits in the Volga region of Tatarstan jointly with mid-sized oil firm Tatneft.
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