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THE SHELL LEAKS FILES: 5 OCTOBER 2026
Archive reference: SLF-2007-078
Collection: The Sakhalin Papers
Principal authenticated records: Royal Dutch Shell plc Annual Report and Form 20-F 2013; Gazprom corporate chronology and April 2013 corporate record; US Department of the Interior assessment of Shell’s 2012 Arctic operations; National Transportation Safety Board investigation of the Kulluk grounding
Court record: Shell Offshore, Inc. v. Greenpeace, Inc., 709 F.3d 1281 (9th Cir. 2013)
Contemporaneous reporting: UPI; RIA Novosti reporting; Daily Telegraph reporting preserved in the Donovan archive
Evidence standard: The Alaska pause, Kulluk grounding, US government review, April 2013 Gazprom–Shell memorandum and parallel shale agreement are established documentary facts. The Russian agreement is treated as a framework for potential cooperation, not as evidence that specific Arctic fields were awarded to Shell or that production was authorised. The proximity in time between the Alaska setbacks and the Russian agreement is established; any proposition that the Russian Arctic was a direct replacement for Alaska remains commentary rather than documented Shell policy.
The sequence is remarkable.
On 31 December 2012, Shell’s Arctic drilling unit Kulluk grounded on the coast of Sitkalidak Island, Alaska, after a tow encountered severe weather.
On 27 February 2013, Shell announced that it would pause exploration drilling in Alaska’s Beaufort and Chukchi seas for the 2013 season.
On 14 March, the US Department of the Interior published a high-level review identifying shortcomings in Shell’s planning, management and contractor oversight.
Then, on:
8 April 2013Shell and Gazprom signed a memorandum concerning hydrocarbon exploration and development on:
Russia’s Arctic shelf.The interval between Shell announcing its Alaska pause and signing the Russian Arctic memorandum was just:
40 days.That does not establish that one decision caused the other.
But it establishes something almost as important.
Shell’s troubled Alaskan campaign had not destroyed its strategic appetite for the Arctic.
It had changed the geography.
And in Russia, access would depend upon partnership with Gazprom. U.S. Department of the Interior
1. The Kulluk had ended 2012 on the rocksShell’s 2012 Alaska campaign had already encountered difficulties before the Kulluk grounding.
Its oil-spill containment system had not been certified in time for drilling into hydrocarbon-bearing zones.
A containment dome was damaged during testing.
The Noble Discoverer, Shell’s other drilling vessel, experienced maritime problems.
Then came the most visible event of all.
While being towed south after the drilling season, the Kulluk encountered worsening weather. Towlines failed. The towing vessel Aiviq lost engine power. The Kulluk crew was eventually evacuated.
On the evening of 31 December 2012, the drilling unit grounded near Ocean Bay on Sitkalidak Island. NTSB
The grounding became the defining image of Shell’s first modern Alaskan Arctic drilling season.
2. Shell itself later acknowledged the difficultiesShell’s authenticated Annual Report and Form 20-F 2013 is particularly useful because it gives the company’s own account.
Shell said that the 2012 top-hole drilling operations themselves had been conducted safely and that they had prepared the ground for further drilling.
But it also acknowledged:
“there were challenges.”
Shell specifically identified difficulty consistently meeting US Environmental Protection Agency air-permit requirements and problems associated with moving the Kulluk out of Alaska after the drilling season.
The company then recorded that it had paused exploration drilling in the Beaufort and Chukchi seas during 2013 in order to prepare its equipment and plans for a resumption. Shell
That is Shell’s own SEC-filed account.
3. The US government was less restrainedThe Department of the Interior published its review on 14 March 2013.
The review examined Shell’s preparations, maritime operations and emergency-response arrangements.
It highlighted:
the delayed certification of the Arctic Challenger containment vessel;
difficulty deploying the containment dome;
serious marine-transport problems involving both drilling units;
and the Kulluk grounding.
The Department concluded that Arctic work required unusually rigorous preparation, contractor supervision and management attention.
Its assessment was blunt:
Shell had performed well in some areas —
but not in others.The Department recommended that Shell produce a comprehensive integrated operations plan before returning and undergo a full independent third-party audit of its management systems. U.S. Department of the Interior
This was not an environmental campaign assessment.
It was the United States Department of the Interior.
4. The Department identified contractor management as a weaknessThe official review also went beyond the individual incidents.
It identified shortcomings in Shell’s management of contractors involved in containment systems, emissions and maritime operations.
That distinction matters.
Shell sometimes characterised its 2012 difficulties as maritime or logistical rather than drilling failures.
That was not entirely wrong: the Kulluk grounded while under tow after the drilling season.
But the government review treated the incidents as relevant to the wider management system necessary for Arctic operations.
The question was not simply whether a drill bit had malfunctioned.
The question was whether the entire system required to operate safely in an exceptionally hostile environment was robust enough. U.S. Department of the Interior
5. A court victory for Shell came two days before the government reportThere was another development in March 2013.
On 12 March, the US Court of Appeals for the Ninth Circuit decided:
Shell Offshore, Inc. v. Greenpeace, Inc.
Greenpeace had challenged a preliminary injunction restricting activists from approaching Shell vessels or engaging in unlawful interference with the company’s Arctic fleet.
The Ninth Circuit upheld the injunction.
It accepted that interference with the vessels could create risks to people, property and the environment and concluded that the district court had not abused its discretion. Justia Law
But the judicial finding must be stated accurately.
The court did not decide that Shell’s Arctic drilling programme was environmentally safe.
It did not approve Shell’s drilling plans.
It did not adjudicate the Kulluk grounding.
And it did not reject Greenpeace’s environmental criticism of Arctic oil exploration.
The case concerned an injunction against interference with Shell’s vessels.
That is its proper evidential boundary.
6. Then came 8 AprilLess than a month after the Interior Department report, the Shell-Gazprom relationship moved into the Arctic.
Gazprom’s own corporate chronology records that in April 2013 it signed with Royal Dutch Shell:
a memorandum setting out principles for cooperation in hydrocarbon exploration and development on Russia’s Arctic shelfand on a deep-water offshore area outside Russia. Gazprom
Contemporaneous reporting fixes the date:
8 April 2013.Alexey Miller, chairman of Gazprom’s Management Committee, and Jorma Ollila, chairman of Royal Dutch Shell, signed the memorandum in Amsterdam.
Present were:
Russian President Vladimir Putin
and
Dutch Prime Minister Mark Rutte. UPI
This was not a minor technical meeting.
The political symbolism was unmistakable.
7. The agreement was broader than one Arctic fieldContemporary reporting quoted Miller explaining that the agreement covered Arctic cooperation generally rather than a single identified deposit.
UPI similarly described it as a framework for exploration of the Russian Arctic without naming a particular reserve basin. Hürriyet Daily News
That is an important qualification.
Some contemporary Russian reporting identified prospective fields and discussed possible Shell equity percentages.
But the memorandum itself should not be converted into a completed field award.
The authenticated Gazprom record says that principles of cooperation were agreed.
It does not establish that Shell received title to a specified Arctic licence on 8 April.
8. Russia’s legal structure made Gazprom crucialContemporaneous RIA Novosti reporting, carried internationally at the time, explained another important point.
Russian rules then restricted development of the country’s continental shelf to companies meeting state-ownership and offshore-experience requirements.
Gazprom and Rosneft were the companies that satisfied those conditions.
An international oil company such as Shell could therefore not simply acquire a Russian Arctic licence and proceed independently.
It needed a qualifying Russian state-controlled partner. Hürriyet Daily News
That made the Shell-Gazprom relationship strategically valuable in a way extending far beyond Sakhalin.
Gazprom did not merely possess resources.
It possessed access.
9. Sakhalin II had provided the operating precedentThe April memorandum did not emerge from an entirely new relationship.
Shell and Gazprom had spent years learning to operate together at Sakhalin II.
By 2013, Shell still owned:
27.5 per centof the project.
Shell’s Annual Report says Sakhalin II produced approximately:
320,000 barrels of oil equivalent per dayand more than:
10 million tonnes of LNGduring 2013. Shell
Shell’s equity LNG sales from Sakhalin amounted to approximately:
2.9 million tonnesthat year. Shell
This was the commercial foundation beneath the Arctic diplomacy.
The Shell-Gazprom partnership was not theoretical.
It was already operating one of the world’s largest integrated oil and gas projects.
10. Western Siberia supplied another precedentShell also retained its 50 per cent interest in the Salym oilfields.
Its 2013 annual report records production of approximately:
145,000 boe per dayfrom Salym that year. Shell
Salym was jointly owned with Gazprom Neft.
So by April 2013 Shell’s Russian partnership architecture contained two important models.
At Sakhalin II:
Shell was the minority partner of Gazprom.
At Salym:
Shell and Gazprom Neft were equal partners.
The new Arctic and shale agreements drew directly upon that experience.
11. The same Amsterdam meeting produced a second agreementThe Arctic memorandum was only half the story.
Gazprom Neft chief Alexander Dyukov and Shell Upstream International director Andy Brown also signed a memorandum concerning:
liquids-rich shale development in Western Siberia.The Gazprom Neft corporate account said this confirmed the companies’ partnership arrangements for exploration and development of shale resources.
The proposed structure envisaged equal participation and built upon the companies’ existing Salym relationship. Euro-Petrole
The April agreements therefore pushed Shell and the Gazprom group in two frontier directions simultaneously:
offshore Arctic hydrocarbons;
and unconventional onshore oil.
12. Shell’s chief executive said the partnership had reached “a new level”Peter Voser’s public explanation is important.
The Gazprom Neft account quoted him saying that the agreements brought the partnership:
“to a new level”.Voser specifically invoked the companies’ long experience together at:
Sakhalin II
and
Salym,
and said Shell welcomed the opportunity to apply that experience and its technology to Arctic operations and shale-oil development. Euro-Petrole
The connection to this archive could hardly be clearer.
Sakhalin II was no longer merely an asset whose control Shell had lost.
Shell itself was presenting the partnership developed there as a foundation for future Russian expansion.
13. The timing was noticed immediatelyThe contrast with Alaska was obvious to contemporary journalists.
On 4 April 2013, before the Amsterdam signing, Daily Telegraph reporting preserved in this archive noted that Shell was preparing a fresh Arctic initiative with Gazprom only weeks after delaying its Alaskan campaign following the setbacks of 2012. Royal Dutch Shell Plc .com
That contemporaneous observation matters because it removes hindsight from the comparison.
The juxtaposition was evident at the time.
Shell was pausing in one Arctic jurisdiction.
It was simultaneously preparing to expand into another.
14. But “Shell switched from Alaska to Russia” would go too farThere is no document examined for this instalment in which Shell says:
Because Alaska went badly, we will replace it with Russia.
There is no evidence that the Russian negotiations began only after the Kulluk grounded.
Large international energy agreements normally develop over substantial periods.
And Shell continued to describe Alaska as a prospective long-term opportunity.
It would therefore be misleading to suggest that the April agreement represented an immediate geographical substitution.
What the chronology does establish is narrower and more defensible:
the Alaska problems did not cause Shell to abandon Arctic oil as a strategic objective.Forty days after announcing its Alaska drilling pause, Shell signed a framework to examine Russian Arctic development with Gazprom.
15. Shell’s own annual report confirms that the Arctic remained strategicThe 2013 Form 20-F settles this point.
In its strategy discussion, Shell identified longer-term opportunities including:
tight oil and shale;
heavy oil;
and:
the Arctic.It said large reserve positions might become available in those areas, with development paced by market conditions, local operating circumstances and regulation. Shell
In other words, the Arctic remained within Shell’s long-term portfolio strategy even after the events of 2012.
Alaska had been paused.
The strategic thesis had not.
16. Shell simultaneously warned shareholders how dangerous the Arctic could beThe same authenticated document contains the necessary counterweight.
Shell’s risk section specifically identified operations in difficult geographical and climatic areas, including the Arctic and maritime environments.
It warned that major HSSE events could lead to:
injuries;
loss of life;
environmental damage;
business disruption;
reputational damage;
and potentially:
loss of licence to operate. ShellThis was generic corporate risk disclosure.
It was not a statement about the Gazprom memorandum specifically.
But once again the juxtaposition is striking.
Shell was identifying the Arctic as both:
a long-term resource opportunity;
and
an environment carrying exceptional operational and reputational risk.
17. Access to reserves also depended on governmentsShell’s same risk disclosure contains another sentence that bears directly upon Russia.
The company said future oil and gas production depended partly upon gaining access to new reserves through:
negotiations with governments and other resource owners. ShellThat observation was global.
It was not written specifically about Gazprom.
But the Russian Arctic was an unusually clear example of the principle.
Shell possessed capital and technology.
It did not control the Russian state’s offshore licence system.
Partnership with Gazprom supplied something Shell could not manufacture for itself:
political and legal access to the resource base.
18. The Kulluk story subsequently became even more seriousThe April 2013 Russian agreement preceded the final US investigation of the Kulluk casualty.
The later National Transportation Safety Board finding is therefore included here as a retrospective official record, not as information available to Shell when it signed in Amsterdam.
The NTSB ultimately determined that the probable cause of the grounding was:
Shell’s inadequate assessment of the risks of the planned tow,which resulted in a tow plan insufficient to mitigate those risks. NTSB
That finding is significant because responsibility was not confined to bad weather or an unfortunate contractor mishap.
The federal accident investigator placed the central deficiency in Shell’s risk assessment and tow planning.
19. That does not establish anything about Russian Arctic operationsThe NTSB finding must not be stretched beyond its jurisdiction.
It concerned one tow involving the Kulluk in Alaska.
It did not assess Gazprom.
It did not assess Russian Arctic drilling plans.
It did not determine that Shell was incapable of safely operating elsewhere in the Arctic.
It did not examine the April 2013 memorandum.
The legitimate historical point is therefore comparative, not legal:
Shell was pursuing another Arctic opportunity while the consequences of its first Alaskan campaign were still being investigated.
20. Nor was Shell already drilling with Gazprom in the Russian ArcticAnother distinction is essential.
The April memorandum expressed an intention to cooperate.
It did not mean that Shell immediately began drilling a Russian Arctic well.
Indeed, later in 2013 Shell itself told Dutch media, during controversy over Gazprom and Greenpeace, that it was not then conducting joint Arctic operations with Gazprom.
The framework and the operating project must not be confused. NOS
The April agreement established direction.
Implementation remained ahead.
21. Nevertheless, the direction could hardly have been clearerBy this stage the documentary sequence had become remarkable.
2006Shell agrees to surrender control of Sakhalin II.
2007Gazprom becomes controlling shareholder.
2009Sakhalin LNG begins production.
2010Shell and Gazprom sign a Protocol on Strategic Global Cooperation.
2011Shell and Gazprom Neft investigate a wider joint venture.
2013Shell and Gazprom agree principles for cooperation on the Russian Arctic shelf.
This was not merely the continuation of an inherited investment.
The relationship was expanding geographically and technologically.
22. The partner that took control had become the gateway to the next frontierThis is where documentary fact ends and interpretation begins.
The public record does not establish that Shell trusted Gazprom politically.
It does not establish that Shell had forgotten the events of 2006.
It does not establish that Shell regarded the Russian investment climate as low risk.
Indeed, Shell’s own SEC filings routinely warned about political risk, expropriation and contractual renegotiation.
But Shell’s behaviour demonstrates something important.
Gazprom had become useful to Shell not simply because it controlled Sakhalin Energy.
It controlled access to opportunities that Shell wanted.
The Arctic sharpened that dependency.
A foreign company could possess enormous technical capability and still require a Russian state company to reach the resource.
23. The Alaska experience should have made the Arctic risks impossible to romanticiseBy April 2013 Shell had already learned that Arctic exploration involved much more than geological promise.
It required:
specialised vessels;
spill-response capability;
containment systems;
weather forecasting;
marine logistics;
contractor management;
environmental approvals;
regulatory coordination;
and the ability to recover from failures far from conventional infrastructure.
The Interior Department review had made precisely that point.
The Arctic was not merely a large reserve map coloured white.
It was an integrated risk system. U.S. Department of the Interior
The Russian Arctic would not repeal those physical realities.
It would add a different political and legal environment to them.
24. Yet Shell still saw the prizeThis is perhaps the central conclusion of the file.
The events of 2012 had demonstrated how badly Arctic logistics could go.
The 2013 government review had demonstrated how closely Shell’s management systems would be scrutinised.
Shell’s own annual report acknowledged environmental and operational risks.
And yet Shell still listed the Arctic among its long-term growth opportunities.
Then it signed with Gazprom.
That combination tells us more about the scale Shell attributed to the potential prize than any corporate slogan could.
For Shell, the Arctic remained worth pursuing.
Documentary Findings EstablishedThe Shell-owned Kulluk grounded near Sitkalidak Island, Alaska, on 31 December 2012 while under tow. NTSB
Shell announced on 27 February 2013 that it would pause offshore Alaska exploration drilling for the 2013 season. The US Department of the Interior subsequently recorded that decision in its official review. U.S. Department of the Interior
On 14 March 2013, the Department of the Interior published an assessment identifying difficulties involving Shell’s containment system, marine transport and contractor management and recommended an integrated operating plan and independent audit. U.S. Department of the Interior
On 8 April 2013, Alexey Miller and Jorma Ollila signed a memorandum setting out principles for Gazprom-Shell cooperation in hydrocarbon exploration and development on Russia’s Arctic shelf and a deep-water offshore project outside Russia. Putin and Rutte were present. Gazprom
Shell and Gazprom Neft simultaneously advanced cooperation concerning liquids-rich shale resources in Western Siberia. Euro-Petrole
Shell’s 2013 Annual Report recorded a 27.5 per cent Sakhalin II interest, with the project producing approximately 320,000 boe/d and more than 10 million tonnes of LNG that year. Shell
The same filing recorded Shell’s 50 per cent Salym interest, with production of approximately 145,000 boe/d. Shell
Shell continued to identify the Arctic and unconventional resources among its longer-term strategic opportunities. Shell
Established court recordOn 12 March 2013, the Ninth Circuit affirmed a preliminary injunction restricting Greenpeace interference with Shell’s Arctic vessels.
The litigation concerned vessel interference and safety zones.
It was not a judicial endorsement of the environmental safety of Shell’s Arctic drilling programme. Justia Law
Later official findingThe National Transportation Safety Board subsequently determined that the probable cause of the Kulluk grounding was Shell’s inadequate assessment of tow risk and an insufficient tow plan. NTSB
That later finding concerns the Alaska casualty and should not be treated as a finding about Gazprom or Russian Arctic operations.
Not establishedThe documentary record examined here does not establish that the April 2013 Russian Arctic agreement was a direct replacement for Shell’s Alaskan programme.
It does not establish that Gazprom promised Shell a particular Russian Arctic field in exchange for any earlier Sakhalin concession.
It does not establish that the April memorandum itself transferred an Arctic production licence to Shell.
It does not establish that any field percentages discussed in contemporary press reports became completed Shell ownership interests.
It does not establish that Shell had begun joint Arctic drilling with Gazprom in April 2013.
And it does not establish that the difficulties in Alaska caused Shell’s decision to deepen cooperation with Gazprom.
CommentaryThere is an important difference between retreat and redeployment.
Shell retreated operationally from Alaska in 2013.
It did not retreat strategically from the Arctic.
That distinction is written into the documents.
The Kulluk was grounded on New Year’s Eve.
Shell paused Alaska drilling in February.
The United States government issued its critical review in March.
Then Shell signed the Russian Arctic memorandum in April.
The temptation is to describe that as an extraordinary act of corporate stubbornness.
A more useful interpretation is that Shell still believed the underlying resource opportunity outweighed the difficulties it had encountered.
What changed was the structure through which that opportunity might be pursued.
In Alaska, Shell had acquired leases and was trying to operate its own campaign within the American regulatory system.
In Russia, the starting point was different.
Access passed through a state-controlled partner.
And that partner was Gazprom.
The same company that had acquired control of Sakhalin II during the crisis of 2006 was now potentially opening the door to an even more formidable frontier.
There is a historical symmetry here.
Sakhalin taught Shell that geology alone did not determine access to Russian hydrocarbons.
Political power mattered.
Licensing mattered.
The state company mattered.
By 2013 Shell was no longer trying to work around that reality.
It was building its strategy through it.
And Gazprom, for its part, wanted what Shell could supply:
capital;
technology;
project experience;
and international offshore capability.
That is why the April 2013 agreement belongs in the Sakhalin Papers.
It shows what Sakhalin II eventually became.
Not merely an LNG plant.
Not merely a disputed ownership history.
But the institutional foundation of a much wider Shell relationship with the Russian state energy system.
The irony is difficult to avoid.
Shell had lost control at Sakhalin.
Seven years later it was taking the resulting partnership north —
towards the Arctic.
Source RecordRoyal Dutch Shell plc’s authenticated Annual Report and Form 20-F 2013 records the company’s Alaska pause, the difficulties involving the Kulluk, its continuing Sakhalin II and Salym interests, and its classification of the Arctic as a longer-term strategic opportunity. The report states that it also served as Shell’s Form 20-F filed with the US Securities and Exchange Commission. Shell
Royal Dutch Shell plc — Annual Report and Form 20-F 2013
Gazprom’s official 2013 corporate chronicle records the April memorandum with Royal Dutch Shell covering exploration and development on Russia’s Arctic shelf and a deep-water offshore area abroad. Gazprom
Gazprom — Chronicle of Gazprom for 2013
The contemporaneous Gazprom Neft account records the parallel Arctic and Western Siberian shale agreements and the companies’ statements concerning the use of their Sakhalin II and Salym experience. Euro-Petrole
Gazprom Neft corporate account — Arctic offshore and Western Siberian shale cooperation, April 2013
UPI contemporaneously reported the 8 April 2013 Amsterdam signing, the presence of Vladimir Putin and Mark Rutte and the framework nature of the Arctic agreement. UPI
UPI — Shell signals intent for Russian Arctic, 9 April 2013
The US Department of the Interior’s 14 March 2013 assessment is the principal governmental record concerning the problems encountered during Shell’s 2012 Alaska programme and the reforms demanded before further operations. U.S. Department of the Interior
US Department of the Interior — Assessment of Shell’s 2012 Arctic Operations
The relevant US judicial record is Shell Offshore, Inc. v. Greenpeace, Inc., 709 F.3d 1281 (9th Cir. 2013), decided on 12 March 2013. Justia Law
US Court of Appeals record — Shell Offshore v. Greenpeace
The National Transportation Safety Board’s completed investigation records the later official probable-cause finding concerning the Kulluk grounding. NTSB
NTSB — Grounding of Mobile Offshore Drilling Unit Kulluk
The Daily Telegraph report of 4 April 2013, preserved in the Donovan archive, provides contemporaneous evidence that the timing of Shell’s renewed Russian Arctic initiative immediately after its Alaska setbacks was already being remarked upon before the agreement was signed. Royal Dutch Shell Plc .com
Donovan archive — Daily Telegraph: Shell to sign Russian Arctic deal, 4 April 2013
Archive disclaimer: A memorandum setting principles for future cooperation is not treated as a completed field development, licence award or final investment decision. Later investigative findings are clearly separated from information available at the time. Judicial findings are confined to the matters actually decided by the courts. Commentary concerning strategic motives is identified as interpretation rather than documentary fact.
Site-wide disclaimer applies.
Next instalment SLF-2007-079 — The Sakhalin Papers LXIX: “A Good and Reliable Partner” — The Arctic 30 Put Shell’s Gazprom Alliance to the TestOnly five months after the Amsterdam agreement, the Shell-Gazprom Arctic relationship collided with an international political controversy.
On 18 September 2013, Greenpeace activists attempted to protest at Gazprom’s Prirazlomnaya Arctic platform.
The following day Russian forces seized the Arctic Sunrise.
Its 28 activists and two freelance journalists — soon known internationally as the Arctic 30 — were detained.
Greenpeace then turned directly on Shell.
It called upon the company to break its Arctic cooperation with Gazprom and argued that Shell’s relationship gave it influence it should use on behalf of the prisoners. Shell rejected responsibility for the arrests. When asked about the relationship in October, a Shell spokesman described Gazprom as a:
“good and reliable partner.” RD.nlShell also stressed that it was not operating the Prirazlomnaya platform and had no joint Arctic operations with Gazprom underway at that moment. NOS
Then, on 20 December 2013, Gazprom announced that Prirazlomnoye had begun producing oil — the first producing hydrocarbon project on Russia’s Arctic shelf. Gazprom
The next file will examine the collision between Shell’s expanding commercial alliance with Gazprom, Greenpeace’s Arctic campaign, and Russian state power — carefully separating what Gazprom did, what the Russian authorities did, what Greenpeace alleged, and what Shell itself was actually responsible for.
THE SHELL LEAKS FILES: 5 OCTOBER 2026 was first posted on October 5, 2026 at 10:42 pm.©2018 "Royal Dutch Shell Plc .com". Use of this feed is for personal non-commercial use only. If you are not reading this article in your feed reader, then the site is guilty of copyright infringement. Please contact me at john@shellnews.net
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THE SHELL LEAKS FILES: 4 OCTOBER 2026
Archive reference: SLF-2007-077
Collection: The Sakhalin Papers
Principal authenticated records: Royal Dutch Shell plc Annual Report and Form 20-F 2011; US Securities and Exchange Commission filing record; Gazprom corporate records concerning the 2010 Strategic Global Cooperation Protocol and the June 2011 Gazprom Neft–Shell agreement
Contemporaneous reporting: Gazprom Neft press-service material; Dow Jones; Russian business press; contemporaneous Donovan archive
Judicial context: Export Credits Guarantee Department v Friends of the Earth [2008] EWHC 638 (Admin)
Evidence standard: The June 2011 agreement is described according to what it actually did: it established basic terms for examining the creation of a joint venture. It is not represented as proof that the contemplated venture had already been incorporated or that every proposed project proceeded. Corporate statements about technology, international assets and future cooperation are attributed to the companies making them. Commentary concerning strategic motives is identified as commentary.
Yesterday’s file ended with a remarkable document.
On 30 November 2010 Shell and Gazprom signed a:
Protocol on Strategic Global Cooperation.Its reach was deliberately broad.
Western Siberia.
The Russian Far East.
European downstream markets.
And possible Gazprom participation in Shell projects outside Russia.
The language suggested ambition.
But a protocol is not a project.
It does not drill a well.
It does not transfer an asset.
It does not create a producing company.
The next question was therefore obvious:
Would Shell and Gazprom turn the rhetoric into corporate machinery?
By June 2011, the answer was beginning to emerge.
Not through Sakhalin Energy itself.
Through Gazprom’s oil subsidiary:
Gazprom Neft. 1. First came an April meetingOn 12 April 2011, Alexey Miller and Peter Voser met in Moscow.
The companies discussed implementation of the global strategic-cooperation protocol.
The agenda included possible joint projects in Western Siberia and eastern Russia, downstream cooperation in Russia and Europe, and Gazprom participation in Shell projects in third countries.
There was also an immediate Sakhalin issue.
Japan had suffered the catastrophic earthquake and tsunami of 11 March 2011, followed by the Fukushima nuclear disaster.
Contemporary reporting recorded that Gazprom and Shell discussed increasing LNG deliveries to Japan from Sakhalin II. Royal Dutch Shell Plc .com
The Sakhalin partnership therefore had two dimensions by spring 2011.
It was an operating LNG business.
And it was becoming the institutional foundation for something much larger.
2. 16 June 2011: Shell and Gazprom Neft sign the basic termsGazprom’s subsequent official corporate record dates the next major step to:
16 June 2011.Gazprom Neft and Shell signed what Gazprom described as the:
Basic Terms and Conditions of the Agreement.
The parties would examine the possibility of creating a joint venture for projects in:
Western Siberia;
other Russian regions;
and:
“third countries.”Gazprom repeated that description in later official releases, including its June 2012 account of continuing Shell cooperation. Gazprom
A contemporaneous Gazprom Neft press-service account carried by Russian business media described the same agreement and its intended geographical scope. BFM.ru – деловой портал
This was the bridge between the grand 2010 protocol and possible operating ventures.
3. A small but important correction: no new joint venture yetThe wording needs care.
Shell and Gazprom Neft did not announce on 16 June that a new joint venture had already been created.
They agreed to:
assess the potential of creating one.The surviving English-language version of the announcement states that the companies would examine a joint venture to pursue projects inside and outside Russia.
Peter Voser described the agreement as a:
“launch pad for new joint projects”
in Russia and elsewhere.
Alexander Dyukov said working with Shell could give Gazprom Neft access to advanced technology and opportunities involving assets outside Russia. Royal Dutch Shell Group .com
That distinction is central to this instalment.
The ambition was established.
The corporate vehicle was still being designed.
4. Western Siberia was not new territory for ShellShell was not entering Western Siberia for the first time.
It already had a substantial producing business there.
Shell and Gazprom Neft each held 50 per cent of the Salym development.
Shell’s 2011 Annual Report and Form 20-F records that Salym production averaged approximately:
165,000 barrels of oil equivalent per dayduring 2011.
The same filing records Shell’s continuing 27.5 per cent interest in Sakhalin II. FinancialFilings
So the contemplated new joint venture was not an experiment between companies unfamiliar with one another.
There was already a working precedent.
Sakhalin II linked Shell with Gazprom.
Salym linked Shell with Gazprom Neft.
5. Salym provided a different model from SakhalinThe contrast is worth making explicit.
At Sakhalin II, Shell had begun as the controlling shareholder and later became a minority partner after Gazprom acquired 50 per cent plus one share.
At Salym, Shell and Gazprom Neft were equal partners.
That meant Shell already possessed an example of Russian cooperation based on:
50–50 ownership.The June proposal therefore did not simply extend the ownership structure imposed at Sakhalin II.
It pointed towards a different model:
equal partnership with the oil arm of Gazprom.
That was potentially much easier for Shell to present internally and externally as conventional commercial cooperation.
6. And Salym was producing at substantial scaleShell’s SEC-filed 2011 annual report provides useful perspective.
Sakhalin II had reached planned plateau production of about:
360,000 boe per dayin 2010.
Its two LNG trains had been designed around approximately 9.6 million tonnes per annum, and Shell said optimisation increased production to:
10 million tonnes per annumin 2011.
Salym, meanwhile, was producing approximately:
165,000 boe per day.These were not marginal experimental assets.
Together they demonstrated that Shell’s Russian partnerships were already capable of producing hydrocarbons at material scale. FinancialFilings
The strategic-cooperation programme therefore rested on substantial operating experience.
7. Gazprom Neft said openly what it wanted from ShellAlexander Dyukov’s statement accompanying the June agreement is unusually revealing.
Gazprom Neft wanted:
experience;
advanced technology;
and:
access to assets outside Russia.That last element directly echoed the reciprocity principle discussed in yesterday’s file.
Gazprom’s senior management had already said that foreign companies obtaining access to Russian upstream projects should be prepared to offer access to attractive international opportunities in return.
The Gazprom Neft statement now expressed the same idea at operating-company level. Royal Dutch Shell Group .com
Russia had the resource base.
Shell had international assets and technology.
The contemplated venture was intended to combine them.
8. Shell’s description was equally revealingVoser did not describe the June agreement as damage limitation following Sakhalin.
He said it built upon the companies’:
“successful partnership”.And he called it a potential:
“launch pad”for projects in Russia and elsewhere. Royal Dutch Shell Group .com
The choice of language matters.
Four and a half years earlier Shell had been fighting to retain control of its largest Russian investment.
Now its chief executive was treating the relationship that emerged from that confrontation as a base from which to expand.
That statement is corporate fact.
Why Shell regarded this as strategically sensible belongs partly to commentary.
But what Shell said publicly is unambiguous.
9. The proposed reach was deliberately wider than oil productionThe agreement was not confined to drilling.
The contemporary Gazprom Neft press-service account said the companies wanted to develop cooperation across:
geological exploration;
production;
processing;
and:
marketing of hydrocarbons.That meant the proposed partnership could span a substantial part of the oil and gas value chain. BFM.ru – деловой портал
Again, this closely reflected the November 2010 Global Strategic Cooperation Protocol.
The June agreement was beginning to give that framework an operating shape.
10. “Third countries” may be the most important phraseWestern Siberia was unsurprising.
Shell already operated there.
Other Russian regions were logical.
But the phrase:
“third countries”deserves attention.
It meant the contemplated venture was not necessarily to be confined to Russia.
Gazprom Neft wanted the possibility of accompanying Shell into international assets.
That was a major conceptual shift from the early Sakhalin relationship.
In the 1990s and early 2000s, Shell had brought international capital and expertise into a Russian project.
By 2011, Russia’s state-controlled energy companies were seeking routes outward.
Shell could potentially provide them.
11. Shell was not relying exclusively on GazpromAnother fact prevents the story from becoming too neat.
Shell was also talking to:
Rosneft.In July 2011, after the collapse of BP’s attempted strategic alliance with Rosneft, Peter Voser confirmed that Shell had held early-stage discussions with the Russian state and Rosneft about opportunities both inside and outside Russia.
He specifically acknowledged Shell’s interest in Arctic acreage, including the Russian Arctic.
Dow Jones contemporaneously reported Voser saying the discussions were still at an early stage and that any outcome would be speculative. Royal Dutch Shell Group .com
That matters.
Shell’s strategy was not simply:
attach ourselves permanently to Gazprom.
A more defensible reading is:
secure access to Russian resources through relationships with the state-controlled companies capable of providing it.
Gazprom was central.
It was not necessarily exclusive.
12. September: the proposed joint venture returns to the agendaOn 15 September 2011, Alexey Miller and Peter Voser met again at Gazprom headquarters.
The official account, reproduced contemporaneously, states that the parties discussed implementation of the June agreement.
Specifically, they considered issues connected with:
creating a joint venturefor projects in:
Western Siberia;
other Russian regions;
and third countries. Oreanda News
Three months after the June signing, therefore, the venture was still prospective.
The companies were discussing its creation.
That reinforces the evidential distinction made earlier.
13. The September meeting broadened the discussion againThe Miller–Voser meeting also addressed wider cooperation in:
geological exploration;
hydrocarbon production;
processing;
and distribution;
in Russian and international oil and gas markets. Oreanda News
The progression can now be traced document by document.
November 2010A protocol for global strategic cooperation.
April 2011Detailed discussion of Russian and international opportunities.
June 2011Basic terms for examining a new Shell–Gazprom Neft joint venture.
September 2011Management discussions about actually creating that venture.
The relationship was moving incrementally from political language towards operating structures.
14. Shell’s own year-end filing shows how important Russia remainedRoyal Dutch Shell filed its 2011 Annual Report and Form 20-F with the US Securities and Exchange Commission on:
15 March 2012. SECIts Russia section did not describe a company retreating from the country.
It recorded:
a 27.5 per cent interest in Sakhalin II;
a 50 per cent interest in Salym;
additional exploration interests in Russia;
and new exploration rights acquired during the year.
Shell also reported that total LNG sales rose to:
18.83 million tonnes in 2011,with higher Sakhalin II production among the factors contributing to the increase. FinancialFilings
Russia remained embedded in Shell’s growth portfolio.
15. Sakhalin II was now performing better than its original nameplate figureThere is another small but telling detail in the annual report.
The original two-train Sakhalin LNG plant was designed around approximately:
9.6 mtpa.After optimisation, Shell reported that production from the two trains reached:
10 mtpain 2011. FinancialFilings
The project over which Shell had fought so bitterly was not merely operational.
It was performing strongly.
That made the commercial logic of staying in Russia easier to understand.
Shell had lost control.
It had not lost the profitability or strategic value of its remaining share.
16. The proposed new partnership therefore rested on success, not failure aloneIt is easy to frame every subsequent Shell-Gazprom agreement as an aftershock of the 2006 crisis.
That misses half the story.
By 2011 Shell had practical evidence that joint Russian ventures could work commercially.
Sakhalin II was exporting LNG.
Salym was producing approximately 165,000 boe per day.
Gazprom and Shell had established long-term LNG and pipeline-gas arrangements.
Both sides had experience working together.
The new venture discussions were therefore not occurring in the shadow of Sakhalin alone.
They were also being driven by the operating results that followed it.
17. But the political asymmetry had not vanishedThis is where fact and commentary must be separated.
Nothing in the June agreement says:
Shell accepted a weaker political position in exchange for resource access.
Nothing in the September account says:
Gazprom was rewarding Shell for its behaviour at Sakhalin II.
No such proposition should be presented as documented fact.
But the institutional structure remained asymmetric.
Shell could provide technology, capital and international assets.
It could not grant itself licences to strategic Russian resources.
Russian state-controlled companies occupied the stronger position in determining access.
That structural fact helps explain why partnership became central to Shell’s Russian strategy.
It does not prove a secret bargain.
18. The High Court record remains relevant — but only as historyThe surviving judicial record concerning Sakhalin II remains:
Export Credits Guarantee Department v Friends of the Earth [2008] EWHC 638 (Admin).
Mr Justice Mitting delivered judgment on 17 March 2008.
The case concerned access to environmental information relating to possible UK financial support for Sakhalin II.
It recorded the project’s environmental significance and the ownership transition involving the Russian participant.
It did not consider the 2010 strategic protocol.
It did not consider the 2011 Gazprom Neft agreement.
It did not rule on Shell’s decision to expand its Russian partnerships.
And it made no finding that later commercial cooperation constituted compensation for Shell’s earlier loss of control. vLex
The court record supplies historical context.
It does not supply motive.
19. What was actually created in June 2011?The documentary answer is narrower than the headline ambition.
The parties created:
an agreed framework for studying a joint venture.They did not yet create the joint venture itself.
That distinction is supported twice:
first by the June wording;
and again by the September meeting, when Miller and Voser were still discussing the issues involved in creating the vehicle. Royal Dutch Shell Group .com
This is an important example of why corporate announcements must be read literally.
“Agreement.”
“Joint venture.”
“Strategic cooperation.”
“Basic terms.”
These phrases can sound interchangeable in headlines.
Legally and commercially, they are not.
20. What the agreement nevertheless demonstratesEven with that caution, the significance is substantial.
Shell and Gazprom had moved from:
a contested ownership restructuring;
to operating cooperation;
to LNG sales;
to global strategic cooperation;
to studying a new international joint venture.
That sequence was completed in less than five years.
The 2006 confrontation therefore did not produce a long-term commercial rupture.
It produced a different architecture for Shell’s Russian business.
One in which state-controlled Russian companies would be embedded much more deeply in Shell’s future plans.
Documentary Findings EstablishedOn 30 November 2010, Shell and Gazprom signed a Protocol on Strategic Global Cooperation covering Russian and international opportunities.
On 16 June 2011, Gazprom Neft and Shell signed basic terms governing study of a possible joint venture for projects in Western Siberia, other Russian regions and third countries. Gazprom later repeated that chronology in its official corporate records. Gazprom
The contemporary Gazprom Neft press-service account said the proposed cooperation covered exploration, production, processing and marketing of hydrocarbons. BFM.ru – деловой портал
Peter Voser described the agreement as a potential “launch pad” for joint projects in Russia and elsewhere. Royal Dutch Shell Group .com
Alexander Dyukov said cooperation with Shell could provide Gazprom Neft with advanced technology, additional experience and access to assets outside Russia. Royal Dutch Shell Group .com
On 15 September 2011, Alexey Miller and Peter Voser were still discussing the creation of the contemplated joint venture. Oreanda News
Shell’s 2011 Form 20-F recorded a 50 per cent interest in Salym, where production averaged about 165,000 boe/d, and a 27.5 per cent interest in Sakhalin II. FinancialFilings
Shell reported that Sakhalin II LNG production reached approximately 10 mtpa after optimisation of the two existing trains. FinancialFilings
Established broader contextShell was simultaneously holding early-stage discussions with Rosneft concerning further Russian and international opportunities, including possible Arctic involvement. Royal Dutch Shell Group .com
This shows that Shell’s Russian strategy was not confined exclusively to Gazprom.
Judicial boundaryThe relevant High Court litigation concerned environmental-information disclosure and pre-dated the 2010–11 strategic agreements.
It did not adjudicate Shell’s later partnership strategy or the motives behind it. vLex
Not establishedThe June 2011 document did not itself establish the contemplated new joint venture.
No evidence examined here establishes that Shell was guaranteed any particular Russian field.
No evidence examined here establishes that Gazprom Neft obtained a specific overseas Shell asset under the June agreement.
No court finding establishes that later cooperation was compensation for Shell’s loss of control of Sakhalin II.
No public document examined here establishes a secret quid pro quo connecting the 2006 ownership transfer with the 2011 joint-venture negotiations.
CommentaryThe language of the June agreement is revealing precisely because it was so practical.
The 2010 protocol had spoken of “strategic global cooperation.”
Seven months later the companies were asking the more difficult question:
What corporate structure would actually deliver it?
The answer under consideration was a joint venture.
Western Siberia provided an obvious starting point.
Shell and Gazprom Neft were already producing oil together at Salym.
The commercial relationship had operating history.
The technical relationship had substance.
The companies knew one another.
But “third countries” shows that the ambition went further.
Gazprom Neft did not merely want Shell’s help producing Russian oil.
It wanted the experience of working internationally.
Shell, meanwhile, wanted continuing access to a resource-rich country in which access to strategic acreage depended heavily upon relationships with state companies.
That is the bargain visible in the public record.
Not a secret bargain.
A structural one.
Resources and access on one side.
Technology, international reach and project experience on the other.
Sakhalin II had demonstrated how unequal the political relationship could become when circumstances changed.
Salym demonstrated that equal commercial partnership could nevertheless work.
By 2011 Shell was trying to build upon both lessons.
The irony remains unavoidable.
Five years earlier Shell had been struggling against the dilution of its largest Russian investment.
Now its chief executive was publicly calling cooperation with the same state-controlled corporate system a:
“launch pad”.That does not mean Shell had forgotten Sakhalin.
It may mean Shell had learned from it.
Source RecordRoyal Dutch Shell plc’s Annual Report and Form 20-F 2011, filed with the US Securities and Exchange Commission on 15 March 2012, records Shell’s Russian production interests, including Sakhalin II and Salym. SEC
US SEC — Royal Dutch Shell plc 2011 Form 20-F filing index
Gazprom’s official 21 June 2012 review of Shell cooperation confirms that Gazprom Neft and Shell signed the Basic Terms and Conditions on 16 June 2011, contemplating a joint venture for Western Siberia, other Russian regions and third countries. Gazprom
Gazprom — Gazprom and Shell develop cooperation in Russian and international oil and gas markets
The contemporaneous Gazprom Neft press-service account describes the purpose of the June agreement and records the statements of Alexander Dyukov and Peter Voser. BFM.ru – деловой портал
Royal Dutch Shell archive — Shell and Gazprom Neft to Implement Joint Projects
The 15 September 2011 Miller–Voser meeting record confirms that creation of the proposed venture was still under discussion three months later. Oreanda News
Contemporaneous Dow Jones reporting recorded Shell’s simultaneous early-stage discussions with Rosneft and Peter Voser’s expressed interest in Russian Arctic opportunities. Royal Dutch Shell Group .com
The relevant judicial background remains Export Credits Guarantee Department v Friends of the Earth [2008] EWHC 638 (Admin), judgment of Mr Justice Mitting dated 17 March 2008. vLex
Archive disclaimer: Agreements to investigate, study or establish future ventures are not treated as completed investments unless the documentary record establishes completion. Corporate statements are distinguished from independent reporting and from judicial findings. Strategic interpretation is identified as commentary rather than fact.
Site-wide disclaimer applies.
Next instalment SLF-2007-078 — The Sakhalin Papers LXVIII: From Siberia to the Arctic — Shell Takes the Gazprom Partnership Into Russia’s New FrontierThe joint-venture discussions did not disappear.
They evolved.
By 2013, Shell and Gazprom were ready to move into territory considerably more politically and environmentally sensitive than Salym.
In April 2013, during Vladimir Putin’s visit to the Netherlands, Gazprom and Shell signed a memorandum covering possible cooperation on:
Russia’s Arctic shelf.At the same time Shell and Gazprom Neft moved toward a 50–50 venture for liquids-rich shale development in Western Siberia, with the existing Salym organisation expected to provide initial oilfield services. Gazprom’s own corporate history records the Arctic cooperation memorandum; contemporaneous accounts record the parallel shale arrangement. Gazprom
The timing would be extraordinary.
Only months earlier, Shell’s own attempt to conquer the Alaskan Arctic had ended its 2012 drilling season amid a catalogue of operational setbacks.
Yet rather than retreat from the Arctic idea, Shell was preparing to pursue another Arctic frontier —
this time with Gazprom.
The next file will examine how the partnership born from the Sakhalin crisis moved north into the Russian Arctic, and why Shell remained determined to pursue high-risk frontier oil even after its Alaskan experience had gone badly wrong.
THE SHELL LEAKS FILES: 4 OCTOBER 2026 was first posted on October 4, 2026 at 7:32 pm.©2018 "Royal Dutch Shell Plc .com". Use of this feed is for personal non-commercial use only. If you are not reading this article in your feed reader, then the site is guilty of copyright infringement. Please contact me at john@shellnews.net
THE SHELL LEAKS FILES: 3 OCTOBER 2026
Archive reference: SLF-2007-076
Collection: The Sakhalin Papers
Principal authenticated records: Royal Dutch Shell plc Form 6-K filed with the US Securities and Exchange Commission, December 2010; Royal Dutch Shell fourth-quarter and full-year 2010 results; Royal Dutch Shell plc Form 6-K of December 2006
Contemporaneous reporting: The Guardian; Dow Jones/Wall Street Journal reporting preserved in the Donovan archive; Bloomberg
Judicial context: Export Credits Guarantee Department v Friends of the Earth [2008] EWHC 638 (Admin)
Evidence standard: The 2010 protocol, its stated scope and the parties’ public statements are treated as established corporate facts. Contemporary descriptions of the 2006 Sakhalin ownership transfer as forced or Kremlin-driven remain attributed descriptions. No court identified here found that Shell entered the 2010 agreement because of coercion, a secret bargain or an earlier promise of access to Russian resources.
Four years earlier, Shell had been fighting to preserve control of Sakhalin II.
By December 2006, it had agreed to halve its interest.
Gazprom would acquire:
50 per cent plus one share.Shell would fall from:
55 per cent to 27.5 per cent.The transaction price was:
$7.45 billion.Shell would remain technical adviser, but Gazprom would become the leading shareholder. Shell’s own SEC filing recorded those terms. SEC
The political and environmental battle surrounding that transaction has occupied much of this archive.
But by late 2010 Shell’s language had changed dramatically.
It was no longer merely accommodating Gazprom inside Sakhalin II.
It was inviting Gazprom into a potentially worldwide relationship.
1. 30 November 2010: the protocol is signedThe most authoritative source is Shell’s own filing with the US Securities and Exchange Commission.
Royal Dutch Shell furnished a Form 6-K containing the announcement:
“GAZPROM AND SHELL AGREE TO PURSUE BROADER COOPERATION”The release stated that Alexey Miller and Peter Voser had signed:
a protocol on strategic global cooperation.Shell said the agreement established “basic guidelines” for broader collaboration. SEC
That phrase matters.
This was not a Sakhalin operating note.
It was not an amendment to an LNG sales contract.
It was a framework for a much wider relationship.
2. The proposed cooperation crossed Russia from west to eastShell’s SEC filing identified one principal area of potential cooperation as:
exploration and production of hydrocarbons in:
western Siberia
and
the Russian Far East.
Those two regions represented very different opportunities.
Western Siberia was Russia’s mature hydrocarbon heartland.
The Far East included Sakhalin and the emerging Asia-Pacific export strategy.
Shell was therefore contemplating cooperation with Gazprom not around a single asset but across two enormous producing regions. SEC
3. Gazprom could also enter Shell projects outside RussiaThe second provision was even more revealing.
Shell and Gazprom would examine:
downstream oil-products cooperation in Russia and Europe
and:
Gazprom participation in Shell upstream projects outside Russia.That represented an important change in the direction of the relationship.
Until then, the public story had largely involved Shell seeking access to Russian resources.
Now Gazprom was being offered the possibility of access to Shell-controlled or Shell-participated opportunities elsewhere in the world. SEC
The partnership was explicitly becoming reciprocal.
4. Gazprom had already explained the principle of reciprocityThe day before the protocol was announced, Gazprom deputy chief executive Alexander Medvedev made the logic unusually clear.
Contemporaneous Dow Jones reporting recorded him saying that Gazprom welcomed foreign partners into Russian upstream projects:
“only if in exchange we get the access to their first class projects somewhere in the world.”He added that Gazprom knew Shell possessed assets that might interest it. Royal Dutch Shell Plc .com
This is one of the most revealing statements in the entire post-Sakhalin sequence.
Gazprom was not presenting access to Russian reserves as a one-way commercial opportunity.
It was describing access as something to be exchanged.
Russian resources for international assets.
5. Shell called it a “strong partnership”Peter Voser’s language was equally notable.
Shell’s SEC-filed announcement quoted him saying:
“This underscores the strong partnership our companies have built in recent years.”He continued that Russia was an important area for new energy development for Shell and would play a large role in meeting future global oil and gas demand. SEC
The expression “strong partnership” deserves to be read against the chronology.
Those “recent years” included:
the environmental confrontation of 2006;
Gazprom’s acquisition of control;
Shell’s reduction from 55 per cent to 27.5 per cent;
the 2007 completion of that transaction;
the start-up of LNG exports in 2009;
and the rapid commercial deepening described in yesterday’s file.
The company that had lost control was now formally celebrating the partnership that followed.
6. Gazprom saw “new large-scale projects”Alexey Miller was even more expansive.
Shell’s filing records Miller describing the agreement as a mutually beneficial strategic partnership between major energy companies.
He said the future held:
“new large-scale projects”and a growing joint presence in new markets. SEC
This was therefore not presented as defensive diplomacy.
Gazprom was talking about expansion.
Shell was talking about partnership.
Both sides were looking beyond Sakhalin II.
7. Joint working groups were to turn the protocol into projectsThe protocol was not itself a final investment decision.
No specific new field was awarded to Shell on 30 November.
No overseas Shell asset was transferred to Gazprom.
No new LNG train was formally approved.
The document was a framework.
Shell’s release explicitly stated that:
Shell and Gazprom would create joint working groupsto develop the opportunities further. SEC
That distinction is important.
A protocol establishes intent.
It does not prove that every contemplated project subsequently materialised.
8. Shell already had two substantial Gazprom-linked positions in RussiaThe Shell announcement itself identified the existing foundation of the relationship.
First:
Sakhalin II.Gazprom and Shell had been partners there since 2007.
Second:
Salym.Shell and Gazprom Neft were jointly developing a group of oil fields in western Siberia. SEC
That gave the new global protocol a practical base.
The parties were not strangers signing a speculative memorandum.
They were already sharing producing assets.
9. By 2010 Sakhalin II was no longer an unfinished megaprojectThe timing was commercially significant.
When the Kremlin agreement had been signed in December 2006, Sakhalin II Phase 2 was still under construction.
Shell’s 2006 SEC filing said the project was more than 80 per cent complete and that roughly $12 billion had already been invested by the end of the third quarter. SEC
By 2010, the project was operating.
Russia’s first LNG plant had opened.
LNG exports were flowing.
Sakhalin II had ramped towards full production.
The argument was no longer about whether the giant project could be completed.
It had become a valuable producing asset.
10. Shell told investors the Gazprom protocol was a material portfolio developmentThe agreement did not disappear into a public-relations archive.
When Shell announced its fourth-quarter and full-year 2010 results, it listed the Gazprom protocol among its major Upstream portfolio developments.
Shell told investors:
“In Russia, Shell signed a protocol on strategic global cooperation with Gazprom”
covering broader collaboration in both Upstream and Downstream businesses. PR Newswire
That inclusion is important.
Shell itself treated the protocol as part of its strategic portfolio story.
11. Sakhalin was already contributing to Shell’s LNG growthThe same full-year results provide the commercial background.
Shell reported LNG sales volumes of:
16.76 million tonnes in 2010,up from:
13.40 million tonnes in 2009.An increase of:
25 per cent.Shell specifically said the increase reflected, among other things, the ramp-up of Sakhalin II LNG sales. PR Newswire
This helps explain why continued cooperation was commercially attractive.
Whatever Shell thought of the events that had cost it control, Sakhalin II was now producing cash-generating LNG within a growing global gas business.
12. Contemporary journalists immediately noticed the ironyThe contrast with 2006 was not lost on observers.
The Guardian reported the agreement under the headline:
“Shell and Gazprom sign ‘global co-operation’ pact.”
Its report stressed that the deal had been signed almost four years after Shell surrendered control of Sakhalin II following intense Kremlin pressure.
Analyst Peter Hitchens of Panmure Gordon described the situation as:
“slightly ironic”.He also argued that foreign companies partnered with Gazprom appeared to fare better in Russia than those attempting to operate independently. The Guardian
That was an analyst’s interpretation.
It was not Shell’s formal explanation.
But it captured the obvious historical tension.
13. The arrangement offered something important to both sidesThe commercial exchange was relatively easy to see.
Gazprom controlled enormous Russian hydrocarbon resources.
Shell possessed:
LNG technology;
international project-management experience;
global trading operations;
access to overseas upstream positions;
downstream markets;
and capital.
Gazprom wanted international reach.
Shell wanted Russian resource access.
The 2010 protocol offered a structure through which those interests could meet.
That interpretation is supported by the explicit scope of the agreement, but the precise internal valuation placed on each component by Shell and Gazprom is not public. SEC
14. The protocol also carried a remarkable risk warningThere is an almost surreal documentary detail in Shell’s own SEC filing.
Immediately after announcing its expanded strategic partnership with Gazprom, Shell’s formal cautionary language warned investors about:
political risk;
expropriation;
and:
“renegotiation of the terms of contracts with governmental entities.”It also warned about regulatory developments, project approvals and the risks of operating internationally. SEC
These were standard Shell forward-looking-statement warnings.
They were not written specifically about Russia.
That qualification matters.
But in the context of Sakhalin II, the juxtaposition is extraordinary.
The press release celebrated deeper Russian cooperation.
Its legal boilerplate simultaneously described precisely the class of political and contractual risks that international investors associated with the Sakhalin episode.
15. Compare the two Shell filings: 2006 and 2010Placed side by side, Shell’s own SEC filings tell the transformation remarkably clearly.
December 2006Gazprom would acquire 50 per cent plus one share of Sakhalin Energy.
Shell’s holding would fall to 27.5 per cent.
Gazprom would become the leading shareholder.
Shell would remain technical adviser.
The parties would establish an Area of Mutual Interest covering future Sakhalin opportunities. SEC
November 2010Shell and Gazprom signed a protocol on:
strategic global cooperation.They would consider Russian upstream development.
They would consider European downstream cooperation.
Gazprom might participate in Shell upstream projects outside Russia.
Joint working groups would develop the opportunities. SEC
The relationship had moved from one project to a potential international alliance.
16. The 2006 Area of Mutual Interest had foreshadowed this directionThe 2006 filing contained a detail whose significance became clearer later.
Shell, Gazprom, Mitsui and Mitsubishi agreed to establish an:
Area of Mutual Interestcovering future oil and gas exploration around Sakhalin and the development of Sakhalin II as a regional oil and LNG hub. SEC
The 2010 strategic protocol did not arise from nowhere.
It enlarged a pattern already embedded in the ownership settlement.
The deal that removed Shell’s control also created mechanisms for future cooperation.
That fact should not be mistaken for proof that future access was secretly promised in return for Shell surrendering control.
The documents do not establish such a bargain.
They do establish continuity.
17. Bloomberg was already reporting possible Sakhalin expansion by the end of DecemberWithin a month of the strategic protocol, the possibility of further Sakhalin expansion was publicly circulating.
Bloomberg reported on 29 December 2010 that Gazprom and Shell might add a third LNG train at Sakhalin II or build another LNG plant.
The Sakhalin regional governor also referred to possible asset swaps involving Gazprom’s Sakhalin III interests.
Gazprom itself said it had no information to confirm the specific LNG expansion proposal at that stage, and Shell declined to comment. Royal Dutch Shell Plc .com
Again, this distinction matters.
Expansion was being discussed.
It was not yet approved.
18. The High Court record still imposes an evidential boundaryThe judicial context remains:
Export Credits Guarantee Department v Friends of the Earth [2008] EWHC 638 (Admin).
Mr Justice Mitting’s judgment independently recorded the controversy surrounding Sakhalin II, the contemplated British export-credit support and the project’s environmental significance.
But the High Court case concerned access to environmental information.
It did not decide why Gazprom obtained control.
It did not adjudicate a secret Kremlin bargain.
It did not determine whether Shell had been unlawfully forced to sell.
And it did not consider the 2010 strategic cooperation agreement, which did not yet exist. vLex
That legal boundary remains essential.
The corporate and journalistic record may support conclusions about strategy and political context.
It cannot be converted into a judicial finding that was never made.
19. What the evidence establishesBy November 2010, several propositions are no longer matters of interpretation.
Shell had accepted minority status at Sakhalin II.
Sakhalin II was producing LNG.
Shell and Gazprom were already commercially linked in western Siberia.
Shell wanted additional Russian opportunities.
Gazprom wanted participation in international projects.
Both sides publicly described deeper cooperation as desirable.
And the relationship had advanced to a formal:
Protocol on Strategic Global Cooperation.That is documentary fact.
20. What the documents do not establishThe public record examined for this instalment does not establish that:
Shell was secretly promised new Russian fields in return for surrendering control of Sakhalin II;
the 2010 protocol was compensation for the 2006 transaction;
Gazprom guaranteed Shell participation in Sakhalin III, Yamal or any particular future field;
Shell privately regarded Gazprom as a trustworthy partner;
the Kremlin admitted using environmental regulation as commercial leverage;
or the 2006 transfer of control was declared unlawful by any court.
Those propositions would require evidence beyond the material presently available.
Documentary Findings EstablishedOn 30 November 2010, Alexey Miller and Peter Voser signed a Protocol on Strategic Global Cooperation. SEC
The agreement contemplated further exploration and production cooperation in western Siberia and the Russian Far East.
It contemplated downstream cooperation in Russia and Europe.
It also contemplated Gazprom participation in Shell upstream projects outside Russia. SEC
Shell and Gazprom agreed to establish joint working groups.
Peter Voser publicly described the relationship as a “strong partnership.”
Alexey Miller said the companies expected new large-scale projects and participation in new markets. SEC
Shell’s fourth-quarter and full-year results later identified the Gazprom protocol as an important portfolio development. PR Newswire
Shell’s 2010 LNG sales rose by 25 per cent compared with 2009, with the Sakhalin II ramp-up contributing to that increase. PR Newswire
Established historical contextShell’s December 2006 SEC filing records Gazprom’s acquisition of 50 per cent plus one share, Shell’s reduction to 27.5 per cent and Shell’s continuing technical-adviser role. SEC
The same filing records an Area of Mutual Interest arrangement covering future Sakhalin development opportunities.
Established contemporaneous interpretationThe Guardian described Shell as having surrendered control after intense Kremlin pressure and noted the irony of the later worldwide cooperation agreement. The Guardian
Dow Jones reporting quoted Gazprom deputy chief executive Alexander Medvedev explicitly linking foreign access to Russian upstream resources with reciprocal access to international assets. Royal Dutch Shell Plc .com
Judicial boundaryThe High Court litigation concerning Sakhalin II dealt with environmental-information disclosure.
It did not adjudicate the motives behind Gazprom’s acquisition or the legality of the ownership transfer. vLex
Not establishedNo public document examined here establishes a secret quid pro quo between Shell’s loss of control in 2006 and subsequent Russian opportunities.
No court finding identified here establishes that Shell was unlawfully coerced into signing either the 2006 or the 2010 agreements.
The 2010 protocol itself did not guarantee that contemplated projects would proceed.
CommentaryThe remarkable feature of the 2010 protocol is not that Shell continued doing business in Russia.
Large energy companies routinely continue operating after disputes with host governments.
What is remarkable is the scale of the reconciliation.
Shell did not merely preserve its reduced Sakhalin stake.
It agreed to explore a relationship extending from Siberian upstream production to European downstream markets and potentially into Shell projects elsewhere in the world.
The company that had lost control of Sakhalin II was contemplating giving Gazprom access to its own international portfolio.
There is a hard commercial logic behind that apparent contradiction.
Shell could not manufacture another Russian resource base.
Gazprom could not instantly manufacture Shell’s international LNG expertise, markets, technology and global project portfolio.
Each possessed something the other wanted.
The imbalance exposed at Sakhalin II had therefore not destroyed the relationship.
It had redefined it.
In 2005, Shell had hoped to trade part of Sakhalin II for Russian gas reserves.
In 2006, Gazprom instead obtained control of Sakhalin II under radically different terms.
By 2010 the concept of reciprocal access had returned — but on a much larger scale.
The language was no longer merely:
Sakhalin.
It was:
strategic global cooperation.With hindsight, the phrase carries an obvious historical weight.
But the archive should resist hindsight.
In November 2010, Shell publicly regarded deeper cooperation with Gazprom as an opportunity.
Russia was part of Shell’s growth strategy.
Sakhalin II was producing valuable LNG.
Gazprom possessed resources Shell wanted.
And Shell was prepared to build upon the partnership created in the aftermath of one of the bitterest corporate confrontations it had experienced.
The Kremlin crisis had not ended the relationship.
It had changed the terms on which the relationship would continue.
Source RecordRoyal Dutch Shell plc’s Form 6-K for December 2010 contains the authenticated Shell announcement of the Protocol on Strategic Global Cooperation, its proposed scope, the Miller and Voser statements, and Shell’s accompanying political-risk disclosures. SEC
US SEC — Royal Dutch Shell plc Form 6-K containing the 30 November 2010 Gazprom agreement
Royal Dutch Shell’s fourth-quarter and full-year 2010 results subsequently identified the Gazprom protocol as an Upstream portfolio development and recorded the contribution of Sakhalin II to rising LNG sales. PR Newswire
Royal Dutch Shell plc — Fourth Quarter and Full Year 2010 Results
Royal Dutch Shell’s December 2006 Form 6-K records Gazprom’s acquisition of control, Shell’s reduced shareholding, Shell’s continuing technical role and the Area of Mutual Interest arrangement. SEC
US SEC — Gazprom, Shell, Mitsui and Mitsubishi Sign Sakhalin II Protocol, December 2006
The Guardian reported contemporaneously on the historical irony of the global cooperation pact and the commercial logic seen by analysts. The Guardian
The Guardian — Shell and Gazprom sign ‘global co-operation’ pact, 30 November 2010
Contemporaneous Dow Jones/Wall Street Journal reporting preserved in the Donovan archive records Gazprom’s explicit exchange principle and Shell’s plans for broader cooperation. Royal Dutch Shell Plc .com
Royal Dutch Shell Plc .com archive — Shell, Gazprom to Combine Beyond Russia, 30 November 2010
Bloomberg reporting at the end of December 2010 recorded discussion of possible Sakhalin LNG expansion and possible future asset exchanges, while noting that no such project had yet been confirmed. Royal Dutch Shell Plc .com
Royal Dutch Shell Plc .com archive — Shell, Gazprom May Expand Sakhalin LNG by 2015, Governor Says
The relevant judicial background remains Export Credits Guarantee Department v Friends of the Earth [2008] EWHC 638 (Admin), judgment of Mr Justice Mitting dated 17 March 2008. vLex
Archive disclaimer: Statements concerning future cooperation establish what Shell and Gazprom publicly contemplated in November 2010; they do not establish that every proposed opportunity proceeded. Corporate statements, journalistic interpretation and judicial findings are kept separate. No inference of a secret quid pro quo is presented as established fact.
Site-wide disclaimer applies.
Next instalment SLF-2007-077 — The Sakhalin Papers LXVII: From Protocol to Joint Venture — Shell and Gazprom Neft Move Into Western Siberia and BeyondThe November 2010 protocol was only a framework.
Seven months later, the framework began acquiring machinery.
On 16 June 2011, Gazprom Neft and Shell signed basic terms for examining a new joint venture.
Its proposed reach was striking:
western Siberia;
other Russian regions;
and:
third countries.By September, Alexey Miller and Peter Voser were discussing implementation of the arrangement and the creation of the new venture. Contemporary Gazprom records later described the 2010 protocol as providing cooperation across exploration, production, processing and distribution in Russian and international markets. Oreanda News
The next file will examine how the grand language of “strategic global cooperation” began turning into concrete corporate structures — and whether Sakhalin II had become the template for Shell’s wider Russian strategy.
THE SHELL LEAKS FILES: 3 OCTOBER 2026 was first posted on October 3, 2026 at 8:33 pm.©2018 "Royal Dutch Shell Plc .com". Use of this feed is for personal non-commercial use only. If you are not reading this article in your feed reader, then the site is guilty of copyright infringement. Please contact me at john@shellnews.net
THE SHELL LEAKS FILES: 2 OCTOBER 2026
Archive reference: SLF-2007-075
Collection: The Sakhalin Papers
Principal authenticated records: Royal Dutch Shell plc Annual Report and Form 20-F 2009; Shell SEC filings; Gazprom corporate releases of 8 April and 18 September 2009
Contemporaneous reporting: Reuters, Bloomberg, Dow Jones/Wall Street Journal, UPI, AFP and The Times
Judicial context: Export Credits Guarantee Department v Friends of the Earth [2008] EWHC 638 (Admin)
Evidence standard: The agreements, meetings, ownership interests and Shell’s description of Russia as a new “heartland” are treated as established documentary facts. Contemporary descriptions of Shell having been forced or pressured to surrender control remain attributed to journalists and other observers. No public court judgment identified here determined that Gazprom’s acquisition resulted from an unlawful bargain. Explanations of Shell’s strategic motives are commentary unless explicitly attributed to Shell.
The obvious assumption after the Sakhalin confrontation would have been retreat.
Shell had entered the crisis controlling 55 per cent of Sakhalin Energy.
It emerged with 27.5 per cent.
Gazprom held 50 per cent plus one share.
Approximately 402 million barrels of oil equivalent of proved reserves attributable to Shell shareholders had disappeared from Shell’s economic position.
The Russian state-controlled gas company was now in charge.
And yet the documentary record shows something striking.
Shell did not respond by keeping Gazprom at arm’s length.
It did the opposite.
Within months of Russia’s first LNG cargo leaving Sakhalin, Shell and Gazprom were discussing new projects.
Within weeks they signed agreements lasting until 2028.
By September they were considering expansion elsewhere around Sakhalin.
Yamal was on the table.
Sakhalin III was being discussed.
And Shell itself was describing Russia as a new strategic heartland.
The question is therefore not simply:
What did Shell lose at Sakhalin II?
It is also:
Why did Shell decide that Gazprom remained a partner it wanted? 1. 18 February 2009: Shell immediately looks beyond Sakhalin IIThe starting point is the inauguration of Russia’s first LNG plant on 18 February 2009.
That same day Reuters interviewed Shell chief executive Jeroen van der Veer.
His comments are important because they came at the symbolic moment when the project Shell had once controlled was entering commercial LNG operation under Gazprom control.
Van der Veer said Shell intended to discuss further energy projects with Gazprom in Russia’s Far East.
Gazprom deputy chief executive Alexander Medvedev said Shell, Mitsui and Mitsubishi were also being considered in connection with potential LNG development on the Yamal Peninsula.
Van der Veer placed the relationship in the wider context of Shell’s long experience of working with state-controlled national oil companies.
Working with state companies, he said, was normal in Shell’s experience. Royal Dutch Shell Plc .com
That was not the language of corporate withdrawal.
It was the language of continued access.
2. Less than two months later came a twenty-year agreementOn 8 April 2009 Alexey Miller and Jeroen van der Veer met at Gazprom headquarters in Moscow.
Gazprom’s official record says they announced a package of LNG and pipeline-gas agreements.
Shell Eastern Trading and Gazprom Global LNG would each purchase LNG from Sakhalin Energy.
Deliveries were to begin in 2009 and continue until:
2028.At plateau, each company was to purchase approximately:
one million tonnes of LNG a year.The transaction also included a twenty-year pipeline-gas arrangement under which an equivalent volume of gas would be delivered to Shell in Europe. Gazprom
This was not merely Shell retaining the shares it had been left with.
It was the creation of a new long-term commercial relationship after the ownership confrontation.
3. Sakhalin LNG was being connected to Shell’s global gas portfolioThe April transaction was geographically much broader than Sakhalin Island.
Gazprom affiliates were to take capacity that Shell held at Sempra’s Energia Costa Azul LNG import terminal in Baja California, together with associated pipeline capacity into Southern California.
Gazprom’s own explanation was that the arrangement would help it sell Sakhalin LNG into the United States and other Pacific markets.
For Shell, the linked pipeline-gas agreement strengthened the flexibility of its European supply portfolio.
A cargo produced in Russia’s Far East had therefore become part of a commercial arrangement spanning:
Russia;
Japan and the Pacific LNG market;
Mexico;
California;
and European pipeline gas.
The relationship was becoming international rather than merely Russian. Gazprom
4. Van der Veer explicitly called for further expansionGazprom’s authenticated release records Van der Veer describing the April contracts as an important milestone.
More significantly, he said Shell looked forward to expanding its relationship with Gazprom in gas and LNG activities:
“both in Russia and internationally.”
Miller and Van der Veer also discussed further LNG cooperation inside Russia. Gazprom
The wording matters.
The Shell-Gazprom relationship was no longer being confined to managing the consequences of Sakhalin II.
Both companies were publicly discussing what came next.
5. Sakhalin III appeared almost immediatelyTwo days later, AFP reported another development.
Gazprom official Stanislav Tsigankov described Shell as a strong potential partner for Sakhalin III.
According to the contemporary report, Shell had “very good chances” of participating once the relevant licence arrangements were in place.
The same report noted the obvious historical tension: cooperation between Shell and Gazprom had deteriorated severely during the Sakhalin II ownership confrontation.
Yet Gazprom was now publicly contemplating Shell’s involvement in another major Far Eastern resource project. Dawn
That is an extraordinary turnaround if the story is reduced to the proposition that Shell had simply been driven out of Russia.
It had not.
Shell had lost control of one project.
It was seeking access to others.
6. Peter Voser confirmed that Shell was looking beyond Sakhalin IIOn 29 April 2009, then chief financial officer Peter Voser told analysts that Shell and Gazprom were examining further opportunities around Sakhalin.
Contemporaneous Bloomberg reporting quoted Voser saying the partners intended to look for additional opportunities in the Sakhalin area.
The report again mentioned Gazprom’s consideration of Shell as a potential Sakhalin III participant. Royal Dutch Shell Plc .com
Voser would become Shell chief executive in July.
The strategic direction therefore did not disappear with Jeroen van der Veer’s retirement.
It continued under his successor.
7. June: Gazprom called Sakhalin a model for YamalThe relationship broadened again in June.
At the St Petersburg International Economic Forum, Alexey Miller met Van der Veer.
A contemporaneous account of the Gazprom statement records Miller describing the Sakhalin II partnership as an example of mutually beneficial cooperation.
He then went further.
The experience gained at Sakhalin II, Miller said, could provide a basis for further LNG cooperation on the:
Yamal Peninsula.That was strategically significant.
Yamal was not an incremental addition to Sakhalin II.
It represented one of Russia’s enormous future gas provinces in the Arctic.
Gazprom was therefore pointing to Sakhalin II — including Shell’s technology and LNG experience — as a possible template for a much larger future relationship. Oreanda News
8. September: the new Shell chief executive meets MillerPeter Voser became chief executive of Royal Dutch Shell on 1 July 2009.
On 18 September, little more than two months into the job, he met Alexey Miller at the Sochi investment forum.
This time the record is particularly clear because Gazprom’s original corporate release remains available.
The companies reviewed Sakhalin II.
They noted that oil and LNG production was running ahead of the original 2009 projection.
Then the discussion moved beyond the existing project. Gazprom
9. The 2007 agreement contained a route to more Sakhalin developmentGazprom’s September statement referred to an Area of Mutual Interest Agreement dating from 2007.
That agreement had been signed alongside the restructuring through which Gazprom obtained control of Sakhalin Energy.
By September 2009, Miller and Voser were discussing the possibility of expanding activity elsewhere on the Sakhalin shelf under that framework.
They agreed to establish a working group to examine issues associated with development of Sakhalin fields. Gazprom
Contemporaneous Dow Jones reporting said the cooperation could extend to the Kirinsky block, which Gazprom held within the Sakhalin III area. Royal Dutch Shell Plc .com
Two years after losing control of Sakhalin II, Shell was therefore discussing how to participate in resources beyond it.
10. Gazprom was building its own Sakhalin III position at the same timeThe context is important.
On 2 July 2009 Gazprom announced the start of exploration drilling at the Kirinskoye field within Sakhalin III.
Gazprom described the development as part of Russia’s Eastern Gas Program and said the field would help supply the Sakhalin–Khabarovsk–Vladivostok gas system.
At that stage Gazprom said Kirinskoye contained tens of billions of cubic metres of gas and millions of tonnes of condensate.
It was not simply an extension of Sakhalin II.
It belonged to the next phase of Russia’s Far Eastern gas development. Gazprom
For Shell, access to such acreage would mean that the Gazprom relationship could become a route back into major Russian resource growth.
11. UPI described the September talks as expansion, not damage controlThree days after the Miller-Voser meeting, UPI reported that the companies were discussing LNG development and additional Sakhalin resources.
The report recalled the twenty-year April agreement and noted that Sakhalin II production was exceeding initial expectations.
Most importantly, it recorded the decision to move forward with a working group concerned with further Sakhalin development. UPI
The historical sequence is therefore consistent across Gazprom’s own record and independent contemporary reporting.
February:
talk of more projects.
April:
twenty-year commercial agreements.
April:
Sakhalin III discussed.
June:
Yamal cooperation raised.
September:
formal working group for additional Sakhalin opportunities.
That is not accidental continuity.
It is an expanding relationship.
12. Then came YamalLess than a week after the September Sakhalin meeting, Vladimir Putin gathered executives from major international energy companies to discuss development of the Yamal Peninsula.
Contemporaneous reporting said Peter Voser indicated Shell was prepared to undertake a feasibility study concerning an LNG plant at Yamal.
The wider significance was obvious to journalists at the time.
Russia possessed vast Arctic resources.
Gazprom possessed privileged access to them.
But international companies possessed capital, project-management capacity and specialist technologies that Russia could use. Royal Dutch Shell Group .com
Shell possessed one capability of particular value:
decades of LNG experience.
Sakhalin II had just demonstrated it on Russian territory.
13. Shell’s annual report gave the strategy a nameThe most revealing Shell document came later.
Royal Dutch Shell’s Annual Report and Form 20-F for 2009 was filed with the US Securities and Exchange Commission on 16 March 2010. SEC
In its Upstream strategy section, Shell listed its established production “heartlands” — countries such as Australia, Canada, Nigeria, Norway, Oman, the UK and the United States.
Then it added:
“Russia represents a new heartland”because Sakhalin II had come on stream in 2009. Shell Plc
The phrase is difficult to reconcile with any notion that Shell regarded the 2006–07 confrontation as grounds for abandoning Russia.
Quite the reverse.
Russia had moved into Shell’s strategic core.
14. The same annual report contained an extraordinary warningThe same document also provides an important counterweight.
Shell’s risk section warned investors that operating internationally exposed it to political and legal instability.
Among the possibilities Shell specifically identified were:
forced divestment of assets;
expropriation;
cancellation of contractual rights;
rewriting of leases;
changing environmental regulation;
and governmental action affecting hydrocarbon entitlements.
Shell also warned generally about the risk of renegotiation of agreements involving governmental entities. Shell Plc
This was not written specifically about Russia.
It was Shell’s global risk disclosure.
That distinction must be maintained.
But historically the juxtaposition is striking.
The same annual report that called Russia a new heartland warned shareholders that political developments could produce precisely the kinds of ownership and contractual disruptions that international oil companies fear.
15. Sakhalin II also taught Shell the value of having the state company inside the projectHere we move from documented fact to interpretation.
No internal Shell memorandum located for this instalment says:
We lost control because Gazprom was outside the project, therefore our future Russian strategy must depend upon partnering Gazprom.
That conclusion should not be presented as a discovered corporate instruction.
But contemporary observers made a closely related point.
When Shell and Gazprom eventually formalised broader cooperation in 2010, analysts noted that foreign energy companies operating with Gazprom appeared to have better prospects in Russia than those attempting to develop strategic resources independently.
That assessment cannot be converted into Shell’s private reasoning.
But it fits the public behaviour visible throughout 2009. The Guardian
Shell did not attempt to restore its old dominant position.
It attempted to make the new relationship work.
16. The economics made withdrawal unattractiveAnother part of the explanation requires no speculation.
Sakhalin II was producing.
Its LNG trains had ramped up rapidly.
Its oil and gas production was substantial.
Its LNG was sold into premium Asian markets.
Shell still owned 27.5 per cent.
It retained technical involvement.
And through the April agreements Shell was acquiring long-term LNG volumes for its global trading portfolio.
Walking away would therefore have meant abandoning a valuable producing position as well as possible access to future Russian resources.
The commercial incentive to remain engaged was substantial.
17. Gazprom also needed things Shell possessedThe relationship was not one-sided.
Gazprom possessed reserves and political access.
Shell possessed technologies, LNG operating experience, international trading capability and participation in infrastructure outside Russia.
The April 2009 transaction illustrates this exchange particularly well.
Gazprom gained access to Shell-linked terminal and pipeline capacity connected with the North American market.
Shell gained long-term LNG and pipeline-gas portfolio flexibility.
Gazprom could learn from an experienced international LNG operator.
Shell could retain a route into Russia’s resource base. Gazprom
Their interests were not identical.
They were complementary.
18. The High Court record remains a useful restraint on hindsightThe English High Court judgment delivered the previous year remains relevant because it fixes an independent point in the chronology.
Mr Justice Mitting recorded that Sakhalin II had originally been developed by a consortium in which Shell held the majority stake and that Gazprom had subsequently assumed a controlling interest.
He also recorded the proposed approximately $650 million of British export-credit support and the potentially serious environmental consequences associated with the project.
The case concerned disclosure of government environmental information.
It did not adjudicate why Gazprom obtained control.
It did not find that Russia had coerced Shell.
It did not rule that the ownership transfer was unlawful.
And it did not examine Shell’s later decision to deepen cooperation with Gazprom. vLex
That legal boundary remains important.
The chronology is powerful enough without converting interpretation into judgment.
19. What can safely be said about Shell’s strategy?The public evidence permits several conclusions.
Shell considered Russia strategically important after losing control of Sakhalin II.
Shell actively pursued further cooperation with Gazprom.
Shell entered long-duration commercial arrangements with Gazprom and Sakhalin Energy.
Shell examined additional Sakhalin opportunities.
Gazprom publicly considered Shell for Sakhalin III.
The companies discussed Yamal LNG.
Shell’s own annual report called Russia a new heartland.
Those propositions are established.
What cannot be stated as documented internal fact is the precise reasoning process inside Shell’s executive committee or board.
No document examined for this instalment records a formal calculation such as:
Accept Gazprom dominance in exchange for future Russian access.
That may be an attractive interpretation.
It remains an interpretation.
Documentary Findings EstablishedOn 18 February 2009 Jeroen van der Veer told Reuters that Shell intended to discuss further Russian projects with Gazprom after the start-up of Sakhalin II LNG. Royal Dutch Shell Plc .com
On 8 April 2009 Gazprom and Shell announced agreements under which Shell Eastern Trading and Gazprom Global LNG would each purchase approximately one million tonnes of Sakhalin LNG annually at plateau.
The supply arrangements were scheduled to continue until 2028.
The package also contained a twenty-year pipeline-gas arrangement benefiting Shell’s European supply portfolio and arrangements involving North American LNG import capacity. Gazprom
Gazprom subsequently identified Shell as a potential participant in Sakhalin III. Dawn
Peter Voser publicly confirmed in April that Shell and Gazprom were examining additional opportunities around Sakhalin. Royal Dutch Shell Plc .com
In June 2009 Alexey Miller publicly suggested Sakhalin II experience could support future Shell-Gazprom cooperation in LNG development on Yamal. Oreanda News
On 18 September 2009 Miller and Voser agreed to establish a working group to study further Sakhalin field development under the existing Area of Mutual Interest framework. Gazprom
Contemporary reporting identified the Gazprom-controlled Kirinsky block as one possible area of cooperation. Royal Dutch Shell Plc .com
Shell’s 2009 Annual Report described Russia as a new upstream “heartland” following Sakhalin II start-up. Shell Plc
Established risk disclosureShell’s same annual report warned generally that political and regulatory developments in countries where it operated could lead to forced divestment, expropriation, cancellation of contractual rights and other adverse changes.
That disclosure was global and was not specifically labelled as a description of Russia. Shell Plc
Established judicial contextThe High Court recorded the transition from Shell majority control to Gazprom control and the substantial environmental issues associated with Sakhalin II.
The judgment concerned environmental-information disclosure.
It did not determine the political motive for Gazprom’s acquisition. vLex
Not establishedIt is not established that Shell’s board formally adopted a policy of accepting Gazprom control in return for access to new Russian projects.
It is not established that Shell was promised Sakhalin III or Yamal participation as consideration for surrendering control of Sakhalin II.
It is not established that the Area of Mutual Interest Agreement guaranteed Shell participation in any specific future field.
It is not established that the environmental enforcement campaign of 2006 was legally improper.
It is not established that the later Shell-Gazprom cooperation erased, resolved or vindicated the environmental controversies that preceded the ownership restructuring.
CommentaryThere is a temptation to tell the Sakhalin story as though December 2006 were the ending.
Shell lost control.
Gazprom won.
The Kremlin prevailed.
Curtain.
The documents show something considerably more complicated.
For Shell, Sakhalin II did not become a reason to abandon Russia.
It became the foundation of a different Russian strategy.
The old model had been:
Shell controls the project.
The emerging model was:
Gazprom controls access to strategic Russian resources; Shell brings technology, LNG expertise, international markets and capital; both sides look for projects where those interests overlap.
Whether Shell liked the circumstances that produced that new model is a different question.
Its behaviour is less ambiguous.
Shell stayed.
Shell signed twenty-year contracts.
Shell discussed Sakhalin III.
Shell discussed Yamal.
Shell created working groups with Gazprom.
And Shell called Russia a new heartland.
There is also a deeper irony.
Shell’s own annual report warned investors about political risks including forced divestment and contractual renegotiation.
Those risks belonged to the generic vocabulary of international petroleum investment.
But Shell had just lived through a transaction in Russia in which its controlling position had been cut in half during an extraordinary period of regulatory, environmental and political pressure.
Yet rather than mark Russia as commercially untouchable, Shell elevated it into the strategic heartlands of the company.
That suggests the scale of the prize.
Russia possessed resources international oil companies could not reproduce elsewhere.
Gazprom possessed access Shell could not independently obtain.
Shell possessed technology and global LNG capabilities Gazprom wanted.
Sakhalin II had exposed the imbalance of political power between them.
It had not eliminated their commercial interdependence.
And by late 2009 both companies were already building upon it.
The confrontation had produced not divorce, but a new marriage contract.
Source RecordRoyal Dutch Shell plc’s Annual Report and Form 20-F 2009 is the principal authenticated Shell source. It describes Russia as a new upstream “heartland” following the start-up of Sakhalin II and contains Shell’s contemporaneous global disclosures concerning political, contractual and forced-divestment risks. Shell Plc
Shell-hosted Annual Report and Form 20-F 2009
The SEC filing index confirms Royal Dutch Shell’s 2009 Form 20-F was filed on 16 March 2010. SEC
US SEC — Royal Dutch Shell plc Form 20-F for 2009
Gazprom’s authenticated 8 April 2009 corporate release records the Shell and Gazprom LNG purchases, the 2028 contractual horizon, the European pipeline-gas agreement, the North American terminal arrangements and the stated intention to expand cooperation. Gazprom
Gazprom — Gazprom and Royal Dutch Shell sign LNG and natural gas contracts, 8 April 2009
Gazprom’s authenticated 18 September 2009 release records the Miller-Voser meeting, successful Sakhalin II ramp-up, the 2007 Area of Mutual Interest Agreement and creation of a working group for further Sakhalin development. Gazprom
Gazprom — Working meeting between Alexey Miller and Peter Voser, 18 September 2009
Reuters’ contemporaneous 18 February 2009 interview recorded Van der Veer’s intention to pursue further cooperation with Gazprom following Sakhalin II start-up. Royal Dutch Shell Plc .com
Bloomberg reporting of 29 April 2009 recorded Peter Voser saying Shell and Gazprom were examining further opportunities around Sakhalin. Royal Dutch Shell Plc .com
UPI’s 21 September 2009 report independently recorded the decision to pursue a working group for further Sakhalin development. UPI
The principal judicial source remains Export Credits Guarantee Department v Friends of the Earth [2008] EWHC 638 (Admin), judgment of Mr Justice Mitting dated 17 March 2008. vLex
High Court — ECGD v Friends of the Earth [2008] EWHC 638 (Admin)
Archive disclaimer: Corporate statements about cooperation and future projects establish what Shell and Gazprom publicly said and did. They do not establish undisclosed motives, private assurances or any political quid pro quo. Contemporary descriptions of the 2006–07 ownership restructuring as forced or coercive remain attributed descriptions rather than judicial findings.
Site-wide disclaimer applies.
Next instalment SLF-2007-076 — The Sakhalin Papers LXVI: “Strategic Global Cooperation” — Four Years After the Kremlin Crisis, Shell Signs a Worldwide Pact with GazpromThe relationship developing through 2009 did not stop at Sakhalin.
On 30 November 2010, Peter Voser and Alexey Miller signed something much more ambitious:
a Protocol on Strategic Global Cooperation.Shell’s own announcement said the companies would examine joint oil and gas opportunities in western Siberia and Russia’s Far East.
Gazprom could participate in Shell upstream projects outside Russia.
The cooperation would extend into downstream markets in Russia and Europe.
Peter Voser said the agreement demonstrated the “strong partnership” the companies had built. PR Newswire
Contemporary reporting immediately noticed the irony: less than four years after Shell had lost control of Sakhalin II, it was signing a global partnership with the company that had taken control. The Guardian
The next file will examine how a bruising Russian ownership confrontation became, in Shell’s own language, a strategic global partnership — and what each side expected to obtain from the other.
THE SHELL LEAKS FILES: 2 OCTOBER 2026 was first posted on October 2, 2026 at 8:15 pm.©2018 "Royal Dutch Shell Plc .com". Use of this feed is for personal non-commercial use only. If you are not reading this article in your feed reader, then the site is guilty of copyright infringement. Please contact me at john@shellnews.net
OPL 245 Twist: Italy’s Supreme Court Says Shell-Eni Prosecutors Did Not Breach Their Legal Duties
The detailed judgment behind the acquittal of former Milan prosecutors Fabio De Pasquale and Sergio Spadaro has now been published—and it overturns the proposition that their handling of potentially favourable material in the Shell-Eni Nigeria prosecution amounted to a criminal refusal to perform their duties.
The extraordinary legal afterlife of the Shell-Eni OPL 245 affair has produced another important development.
Italy’s Court of Cassation has published the reasoning behind its decision to clear former Milan prosecutors Fabio De Pasquale and Sergio Spadaro, who had themselves been convicted after the collapse of the enormous corruption prosecution involving Shell, Eni and Nigeria’s controversial OPL 245 offshore oil licence.
The decision is significant because the two prosecutors had previously been convicted twice—at first instance and on appeal—and sentenced to eight months’ imprisonment for refusing to perform official acts.
Italy’s highest court overturned those convictions on 18 June 2026.
Now we know in much greater detail why.
In judgment No. 34812/2026, whose reasons were filed on 29 September, the Court of Cassation concluded that the action the prosecutors were accused of failing to perform was not legally mandatory and involved prosecutorial discretion. It therefore did not constitute the criminal offence for which they had been convicted. Giurisprudenza Penale
That provides an important new chapter in a story that has been running for well over a decade.
The prosecution that turned on its prosecutorsThe origins lie in the notorious OPL 245 transaction.
In 2011 Shell and Eni participated in agreements involving the Nigerian government concerning rights to the enormous deep-water offshore block.
The transaction subsequently became the subject of international investigations and allegations that money paid in connection with the deal ultimately benefited Nigerian officials and other individuals.
Shell and Eni denied corruption.
Italian prosecutors eventually brought one of the largest international corporate corruption cases ever tried in Italy.
Then, on 17 March 2021, the Milan Tribunal acquitted Shell, Eni and the individual defendants. The acquittals subsequently became final after prosecutors withdrew their appeal. Shell maintains that there was never evidence of a corrupt agreement or corrupt payments. Shell
But the story did not end there.
Instead, attention turned to the conduct of the prosecutors themselves.
Accused of withholding favourable materialDe Pasquale and Spadaro were accused of failing to make available material that could have assisted the defendants.
The controversy included chats and other material originating from another investigative strand being handled by fellow prosecutor Paolo Storari.
The accusation was serious: that information potentially favourable to defendants in the OPL 245 trial had not been acquired and disclosed when it should have been.
A Brescia court convicted the prosecutors, and in October 2025 an appeals court upheld their eight-month sentences.
The Brescia appeal judgment took a particularly strong position. According to ANSA’s January 2026 report on the reasons, the appeal court characterised the failure to deposit favourable material as a conscious refusal to carry out an obligatory and urgent act. ANSA.it
The Court of Cassation has now rejected the criminal-law foundation of that conclusion.
What Italy’s highest court actually decidedThis is where the newly published judgment becomes particularly important.
The Cassation Court stressed that the case before it was not a general inquiry into whether every aspect of the prosecutors’ behaviour was correct.
Nor was it questioning the prosecutor’s obligation to act loyally and impartially.
The much narrower legal question was whether the particular conduct amounted to the specific criminal offence of refusing to perform an official act under Article 328 of the Italian Criminal Code.
The answer was no.
The court concluded that the act the prosecutors supposedly refused to perform was not a mandatory act required by the relevant provisions of the Italian Code of Criminal Procedure. Instead, it involved what the court described as delicate discretionary assessments belonging to the prosecutor responsible for the case. Giurisprudenza Penale
That distinction is crucial.
A prosecutor may have duties of fairness and impartiality, but according to the Cassation Court it does not follow that every disputed prosecutorial decision constitutes a criminal refusal to perform an official duty.
As the court’s reasoning makes clear, not every possible breach of professional correctness is itself a crime. Giurisprudenza Penale
The disputed chatsThe judgment goes further.
According to the published summary of the Cassation decision, the failure to acquire the chats identified by Storari did not involve decisive exculpatory evidence, and the decision not to acquire them was not improper in the criminal-law sense at issue before the court. Giurisprudenza Penale
The court also found that there had been no criminally relevant act of refusal or attributable omission by De Pasquale and Spadaro.
Their position had effectively been referred upwards to the Milan chief prosecutor and deputy chief prosecutor, who did not override it. Giurisprudenza Penale
That is a markedly different interpretation from that reached by the lower courts.
Two convictions wiped awayThis was not a retrial producing a reduced sentence.
The Court of Cassation annulled the convictions without remitting the case for another trial, using the formula perché il fatto non sussiste—essentially, because the alleged criminal act did not exist.
The judgment therefore brought the criminal proceedings against the prosecutors to an end. Giurisprudenza Penale
Global Investigations Review now reports the decision under the succinct headline:
“Shell-Eni prosecutors didn’t breach legal duties.” globalinvestigationsreview.com
That is broadly accurate as a description of the criminal-law finding, although the judgment itself contains an important nuance: the Cassation Court deliberately distinguished the question of criminal liability from a broader assessment of prosecutorial conduct.
That distinction should not be lost.
An extraordinary reversalThe sequence is remarkable.
First, Shell, Eni and the individual defendants were prosecuted over one of the biggest alleged international corruption schemes to reach an Italian courtroom.
They were acquitted.
Then two of the prosecutors who brought the case were themselves prosecuted over their handling of potentially favourable material.
They were convicted.
Their convictions were upheld on appeal.
And now Italy’s highest court has overturned those convictions completely.
Reuters reported after the June ruling that the prosecutor-general before the Court of Cassation had himself sought the full acquittal of De Pasquale and Spadaro. Euronext
But this does not rewrite the OPL 245 recordCare is required here.
The Cassation decision does not convict Shell or Eni of anything.
Their Italian criminal acquittals remain final.
Equally, the new judgment should not be read as a judicial declaration resolving every historical controversy surrounding OPL 245.
The Court of Cassation was deciding whether De Pasquale and Spadaro committed a particular criminal offence through their handling of material during the prosecution.
It concluded they did not.
That is a much narrower proposition.
The underlying OPL 245 documentary history—including the negotiations, payment structures, internal corporate communications and differing interpretations of what participants knew—continues to exist independently of the eventual criminal outcomes.
Indeed, an extensive collection of documents from the Milan proceedings remains publicly archived by the OPL245 Papers project. OPL245 Papers
Shell and Eni are back in OPL 245There is another reason why this historical litigation remains relevant in 2026.
OPL 245 is no longer merely an old courtroom story.
Earlier this year the Nigerian government reached an agreement enabling the former OPL 245 acreage to move forward under Nigeria’s Petroleum Industry Act.
The former licence has been converted into two petroleum mining leases and two petroleum prospecting licences, involving Eni as operator alongside the Nigerian national oil company and Shell Nigeria Exploration and Production Company.
Shell describes the licences as part of its expanding Nigerian deep-water portfolio. Shell
Thus an oil block that spent years generating investigations, criminal proceedings, civil claims and international controversy is once again part of Shell and Eni’s commercial future.
The latest chapter, not necessarily the last wordThe newly released Cassation judgment closes one remarkable subsidiary chapter of OPL 245.
Fabio De Pasquale and Sergio Spadaro stand acquitted.
Their previous convictions have been annulled.
Italy’s highest court has found that the prosecutorial decision at issue involved discretion rather than a mandatory legal act whose refusal constituted a crime. Giurisprudenza Penale
That does not reverse Shell and Eni’s acquittals.
It does something different.
It means that the prosecutors who unsuccessfully pursued Shell and Eni have now themselves emerged from the criminal justice system without convictions.
For anyone attempting to write a definitive history of OPL 245, that distinction matters.
The case has produced an extraordinary succession of allegations, investigations, trials, acquittals, prosecutions of prosecutors, convictions of those prosecutors—and finally the annulment of those convictions by Italy’s highest court.
And after all of that, Shell and Eni are once again preparing to develop the Nigerian acreage at the centre of the entire affair.
Sources: Global Investigations Review, 1 October 2026; Italian Court of Cassation, Sixth Criminal Section, Judgment No. 34812/2026, reasons filed 29 September 2026; Reuters; Giurisprudenza Penale; Shell plc; Eni; ANSA; OPL245 Papers. globalinvestigationsreview.com
OPL 245 Twist: Italy’s Supreme Court Says Shell-Eni Prosecutors Did Not Breach Their Legal Duties was first posted on October 2, 2026 at 5:41 pm.©2018 "Royal Dutch Shell Plc .com". Use of this feed is for personal non-commercial use only. If you are not reading this article in your feed reader, then the site is guilty of copyright infringement. Please contact me at john@shellnews.net
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