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Shell (NYSE:SHEL) said on Friday it is assessing the implications of a Russian decree that would allow its government to take charge of the Sakhalin-2 natural gas project, in which the company owns a 27.5% stake.
Vladimir Putin signed a decree on Thursday that would transfer all rights and obligations of the consortium behind Sakhalin-2 to a new Russian entity, effectively giving the Kremlin a veto over which foreign investors will be allowed to keep their stake.
Putin's decree gives foreign investors one month to ask the Russian government for a stake in the new entity.
After Russia invaded Ukraine, Shell (SHEL) said it would sell its 27.5% stake as part of plans to leave Russia altogether.
Japan's Mitsubishi (OTCPK:MSBHF) and Mitsui (OTCPK:MITSY) own respective 10% and 12.5% stakes in the project, while Russia's Gazprom (OTCPK:OGZPY) owns 50%.
Sakhalin-2, in Russia's far east, is one of the world's largest oil and gas projects, supplying ~4% of the global liquefied natural gas market.
Reuters reported a few weeks ago that Shell (SHEL) was in talks to sell its investment in Sakhalin-2 to an Indian consortium.