Nervous as Shell
Dr. Bill Belew
Issue II - June 18, 2006
Introduction by Mr. Stolyarov:
Dr. Bill Belew writes that Shell has decided to team up with
Russia's state-controlled oil and gas firm Gazprom to extract oil off
the waters of Sakhalin Island. The deal is dangerous, however, because
the Russian government might backstab Shell -- as it has been known to
do in the past. Will private enterprise or government bureaucrats
ultimately win from this arrangement?
When Shell started shelling out mega bucks to drill for oil off the
coast of Sakhalin Island, Russia wasn't one of the global oil suppliers.
Russia is now.
It is just plain costing too much for Shell to get the oil out of the
icy water in the sea of Oshkosh.
So...Shell has teamed up with Russia's Giant Gazprom.
Gazprom will get a share of whatever they find in the sea of Oshkosh,
and Shell gets a 50% stake in a Gazprom field in western Siberia.
The relationship with Gazprom is supposed to give Shell some
political protection, but it doesn't always turn out that way when doing
business with Russia's big guns. For whatever reason, they sometimes
just change their minds.
Executives at Shell are nervous as shell, say some.
But, what choice does Shell have? The aim is to have first-mover
advantage once the oil starts coming.
But, is it worth the risk?
What do you think?
Dr. Bill Belew is a former Intelligence
Officer for a Destroyer Squadron. He lived 20 years in Japan, where he
started a language school for Japanese
Dr. Belew teaches classes for a vocational school and online for a
See Dr. Belew's blog,
for news and discussions about business and current events in Russia and
for Dr. Belew's reports on business in China,
on business in Japan, and
TheBizofKnowledge on business education.
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