Operation Royal Dutch / Shell in Russia turned into a strategic alliance with Gazprom, the gas monopoly country, the development of the Salym oil fields in Siberia, and a small retail gas station network in St. Petersburg. Focuses on the Sakhalin II. Sakhalin is the reason for the existence Sakhalin Energy Investment Co (SEIC), owned Royal Dutch / Shell (55%), Mitsui (25%) and Mitsubishi (20%). About $ 10 billion, in the second phase of Sakhalin II will be the biggest investment decision in the history of Royal Dutch / Shell, and the largest foreign direct investment in Russia's history. Sakhalin II is also the largest integrated oil and gas projects in the world. The project, however, faces a number of challenges, however. Production sharing agreement (PSA) - a commercial contract between a foreign investor and the host government, which replaces the tax in the country, and licensing regimes for the life of the project - controls Sakhalin II. Although PSA Sakhalin II has the status of Russian law, the other Russian conflict of laws with terms of the PSA. PSA has also become controversial in Russia. After several years of waiting in vain for the "legal stability," Shell Sakhalin Energy and managers must decide whether the project should go forward. "Hide
by Ravi Abdelal Source: HBS Premier Case Collection 27 pages. Publication Date: March 24, 2004. Prod. #: 704040-PDF-ENG
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