Court Rules in Favor of Shell-Sibir on Saylm Project

Shell and its joint venture partner Sibir Energy have won a court ruling this week overturning a work stoppage order issued by a Russian government ministry. Henry Cameron, chief executive of Sibir, said the Moscow arbitration court ruled in favor of Salym Petroleum Development - a 50:50 joint venture between Shell and Sibir subsidiary Evikhon - overriding a work suspension notice issued by the Ministry of Natural Resources July 16. Work on the field will go forward as planned. Drilling and production work at Upper Salym had been stopped, in any case, for scheduled maintenance.

The Ministry of Natural Resources ordered the Salym partners to stop work on the Upper Salym field - one of three in the Salym development - citing noncompliance with a 1997 development agreement. The joint venture did not cite the specifics of the Ministry's complaint, but said the work stoppage order was separate from notices issued by the Ministry earlier in July, giving the Salym partners 90 days to address its complaints that the joint venture was taking too long to develop the field.

The Salym oil fields are located in eastern Siberia and hold recoverable oil reserves of 700 million barrels. Shell said earlier this month that around $1 billion in investments is planned for all the fields held by the Salym joint venture.
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