Shell and its Japanese partners have agreed to sell 50% of their stake in the Sakhalin II oil and gas fields to Russian gas giant Gazprom for €5.6bn. The sale reduces Shell’s stake in the project from 55% to 27.5%. Mitsui and Mitsubishi see their stakes shrink to 12.5% and 10% respectively.

The agreement marks the end of long and complicated negotiations between Shell and Gazprom, which have been heavily influenced by the Kremlin. In recent months, vital environmental permits for the extraction of oil and gas have been withdrawn by the Russian authorities. The Sakhalin II fields are the biggest reserves in the world.
Shell CEO Jeroen van der Veer said in a written statement that the group’s first priority was ‘to get Sakhalin II off the ground’. Analysts polled by Reuters said that Shell must now reduce its own oil and gas reserves by around 10%.