New York Times on Sakhalin

Interesting article in the Times today about Sakhalin. It’s great to see Goldman Sachs coming around to the view that my colleagues and I have been expressing for the past two years.

“The official rhetoric is getting steadily more shrill and does not bode well for the future of foreign oil companies in Russia,” the director of Goldman Sachs’s Moscow office, Rory MacFarquhar, wrote in a note to investors recently. “We continue to believe that the aim of this campaign is to force the foreign companies to accept Russian state companies as equal or even majority partners in their projects, possibly for no compensation.”

Then there is a boilerplate analysis of Gazprom’s aims:

Meanwhile, the Russian company Gazprom is negotiating to buy 25 percent of Shell’s project, but those talks have not gone well. Shell announced the cost increase only in July 2005, just a week after signing a preliminary asset swap agreement with Gazprom. Gazprom, which is seeking a monopoly on natural gas exports from Russia to Asia, wanted a veto on the board, with a voice in decisions about markets, pricing and strategy. Under a previous charter for Shell’s operating company, the 25 percent stake, plus one share, would have given Gazprom a say in these decisions.

And lastly, a terrific quote from Yermakov:

“The environmental weapon, in this sense, allows the Russian authorities to put pressure on the operators and at the same time to defend a noble cause,” said Vitaly V. Yermakov, research director for Russian and Caspian energy at Cambridge Energy Research Associates. “In chess, every good move should be both offensive and defensive. Russians are very good chess players.”