Learning English - Words in the News
22 December, 2006 - Published 15:27 GMT
Gazprom to get majority stake on Sakhalin
The Russian state-controlled energy firm, Gazprom, will take over the majority stake in one of the world's largest gas projects in Russia's far east. Shell and its Japanese partners have agreed to sell Gazprom a controlling share in the 22-billion-dollar project on the island of Sakhalin. This report from Mark Gregory:
Over the last few days the financial pages of British newspapers have featured headlines such as "Is Russia safe for business", "Shell mauled by Russian bear", and "Gazprom in Sakhalin grab". As many Western investors see it, Gazprom backed by the Kremlin has crudely bludgeoned Shell into surrender.
But there have also been reflective headlines such as "Shell: best to admit Russian reality". For sometime Moscow has signalled it's intention to win back control of the energy sector. Shell's contract that gave it majority control over Sakhalin project - one of the world's biggest gas developments - was signed in the early 1990s, the period of post-Soviet chaos, when government in Russia was weak, and foreign firms and local oligarchs negotiated many favourable deals.
Now the boot is on the other foot: Russian energy resources are in high global demand and the Russian authorities can largely set their own terms. But the Sakhalin affair could have consequences for Gazprom outside Russia. Expect more resistence in Western Europe to Gazprom's ambitious plans to buy up firms that distribute gas to European consumers.
Mark Gregory, BBC
the boot is on the other foot
set their own terms