In August 2014 I wrote a post which started as follows:
Ever since Shell acquiesced to the Kremlin’s demand to surrender majority ownership of Sakhalin Energy in 2007 I have thought that western oil companies have fundamentally misunderstood the Russian mentality. The perception at the time was that Shell believed by caving in on this issue, they would gain favour with the Russians and hence be in a strong position to participate in future projects. Whether this was true or not (the alternative view is that Shell simply had no choice) the fact remains that in the 7 years since the transfer Shell has yet to participate in another major Russian oil and gas project. Having been chatted up at the bar on Shtokman, and seductively passed a phone number on a napkin on Yamal, Shell lost out on both occasions to Total leaving them led on with promises of a third LNG train on Sakhalin and teased with whispers of an LNG project in Vladivostok. To continue with the analogy, some people in Shell must be wondering when Madame Russia is finally going to put out.
Like that guy you were sorta buddies with in college who made out with a girl once and never stopped going on about her afterwards, but never read the signals that she wasn’t interested in a repeat performance and made a beeline for her whenever he saw her in a bar – even if she was busy necking a half-shaved biker some eight years her senior – Shell seems to be smitten by Russia:
The recent acquisition by the Royal Dutch Shell oil and gas company of its British rival BG Group creates new opportunities for further cooperation with the Russian energy giant Gazprom, Royal Dutch Shell Chief Executive Officer Ben van Beurden said Tuesday in a statement.
On Monday, Royal Dutch Shell sealed the $53-billion purchase of BG Group, expecting the merger to accelerate growth in the liquefied natural gas market and enhance its deep water extraction capabilities.
“In Russia, the Shell-BG combination creates new opportunities for our partnership with Gazprom, taking into account the strong positions that both of our companies hold in the global gas market,” van Beurden said.
This is getting embarrassing. Look, there are synergies between Shell and BG which make the buy look like a sensible one insofar as gas is concerned, assuming the oil price (or more accurately, the gas price) doesn’t stay as low as it is now. But why would any of this interest Gazprom? BG doesn’t operate in Russia, and it’s not as if Gazprom is struggling to offload any of its own gas through reasons that are not related to an unusually warm winter in Europe and raw stupidity on the part of its own management and the Russian government, neither of which a combined Shell-BG can do much about. There is very little, if anything, that Shell-BG could offer that Shell didn’t have before the merger.
Since 2007 Shell has been pining like a lovestruck teenager at the elbow of Gazprom, thinking all he needs to do is convince her that he is a reliable, dependable, trustworthy boyfriend and she will see the light and drop the bad boys with the tattoos, criminal records, and motorbikes and settle for a future of middle class suburban living with cups of tea and occasional sex (missionary position only) between Laura Ashley sheets.
Like I said, it’s getting embarrassing. Where are Shell’s mates? Shouldn’t they have dragged him away by now, and taken him to a strip-bar or something? Naturally, like all good players, Madame Gazprom occasionally opens her legs from across the room just to drive poor Shell crazy and keep the goodies flowing:
In June 2015, Gazprom and the Anglo-Dutch Shell company signed a memorandum on the construction of a third technical line for a liquefied natural gas plant on Sakhalin Island off Russia’s Pacific Coast.
“I like you,” whispered Gazprom in Shell’s ear “you’re not like the other oil companies. I feel like I can trust you. No, no, don’t put your hand there,” said Gazprom, as Shell clumsily grasped her thigh with a trembling paw. Seeing Shell’s disappointment, Gazprom leaned close, placed a kiss on Shell’s flabby cheek with barely-concealed disgust, and said “we’re not ready yet, we should get to know each other better first” and got up to leave. As she did so her phone beeped, and she saw it was a message from Rosneft: “ExxonMobil wants a threesome. Bring the lube.” As she walked away all thoughts of Shell, who was still sitting there with his eyes closed awaiting a French kiss that never came, were forgotten.