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Sakhalin Oil and Gas News: ANALYSTS FORESEE INCREASED INVESTMENT IN SAKHALIN-2: Week of November 6, 2005

Source: - November 3, 2005

Analysts say that investment in the Sakhalin-2 project likely will be revised upward since the Production Sharing Agreement was signed in 1994 and commodity prices have changed significantly since then.

As a result, increased spending is needed, industry insiders say. Russian President Vladimir Putin paid an official visit to the Netherlands where he met Royal Dutch/Shell head Jeroen van der Veer. The two parties addressed the issue of larger investment in the project experts believe.

Meanwhile, some experts say Russia is unlikely to benefit from larger investment in this oil and gas project.

Currently Russian gas giant Gazprom is in talks with Royal Dutch/Shell on swap of assets within the framework of this project. If it is agreed to boost overall investment in Sakhalin-2, Gazprom will have to pay more.

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