Shell insists Russia will make $80bn from Sakhalin-2 project

Shell insisted yesterday that the Russian state should expect to heap revenues of up to $80bn (

Shell is embroiled in a showdown with the Kremlin over the cost of the scheme, put by Shell at $20bn, which the authorities accuse the company of inflating. The Kremlin is concerned about the estimated cost – raised by Shell last year from $12bn to $20bn – because the big payments to the state do not kick in until the Sakhalin project has recouped its costs. Russia has also accused Shell of “criminal” violations of environmental standards at the project, located off the east coast.

Reporting better-than-expected third-quarter results yesterday, Shell said that 70 to 80 per cent of the increased costs at Sakhalin would be borne by the operating companies.

The Independent