It has now been just over two years since Gazprom assumed majority ownership of the Sakhalin II project, forcing Shell to concede its majority share whilst retaining operatorship and overall management of the development.
So what has changed since then?
Lots. Firstly, almost all the non-Shell expatriate staff have been booted, leaving the organisation looking somewhat thin on the ground especially concerning project completion and maintenance. Although to be fair, booting a whole load of expats out of Sakhalin Energy was something that should probably have happened in 2007. Secondly, terms and conditions of employment have been squeezed to the point that there is very little overtime or training, which is having a big effect on the Russians. And business class travel has been pretty much eradicated which, despite a review of the travel policy being sorely overdue, is probably not a smart move given where we live and what airports we must pass through to get here. And it must be noted that it is open to question how much of the above is being driven by Gazprom or the Shell management who have been in charge since the beginning. Ask the right people the right questions, and the fingers point to the latter.
Then last month Gazprom sent no less than 80 people to carry out an audit on Sakhalin Energy, the purpose of which was not clear but was subject to volumes of speculation by Russians and expats alike. At one point, one of the senior Shell asset managers, a chap who I worked with on and off for 2 years but who never bothered to learn my name, asked one of the auditors how it was all going.
“You’re not paid to ask those sort of questions!” came the reply.
Ouch! Welcome to your new masters, gentlemen.