Gazprom, the world’s largest extractor of natural gas, has signed a strategic deal with oil and gas producer Royal Dutch Shell. Termed The Agreement of Strategic Cooperation, a Gazprom press release claims it will ensure cooperation between the two countries “across all segments of the gas industry, from upstream to downstream, including a possible asset swap.” The deal will help Gazprom penetrate new markets as those in Europe become saturated.
The deal will help Gazprom penetrate new markets as European markets
Alexey Miller, Chairman of the Gazprom Management Committee, and Ben van Beurden, Chief Executive Officer of Shell, at the St Petersburg International Economic Forum, signed the document. The two energy giants have a history of cooperation. “Documents of such significance are signed only once every five years or maybe even 10,” Miller said at the forum, reports Reuters. “Many of our traditional partners are positioning themselves as strong regional players… Shell is a global player. And as the global gas markets develop… we will be creating a global strategic partnership.”
Gazprom is officially an Open Joint Stock company, however the Russian state has the largest share of ownership. Many western firms are divesting or steering clear of Russian firms due to continuing sanctions and hostility between the west and Russia. While the US has placed sanctions on the company as punishment for Russia’s actions in Crimea, the EU has been reluctant to do so due to its members’ reliance on its gas output.
The deal will take time to come into effect. Shell is waiting for anti-monopoly clearance from authorities in a number of countries after its recent purchase of rival firm BG.