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Russia has moved to take over a major oil and gas development in which Shell has a 27.5% stake.

President Vladimir Putin has signed an order to take charge of the Sakhalin-2 project.

Shell told the BBC: "We are aware of the decree and are assessing its implications."

Sakhalin-2 is one of the world's largest integrated, export-oriented oil and gas developments, as well as Russia's first offshore gas project.

Project infrastructure includes three platforms, an onshore processing facility, an oil-export terminal and a liquefied natural gas (LNG) plant.

Japanese companies Mitsu and Mitsubishi both have significant stakes in the development.

The decree said a new firm would take over all rights and obligations of Sakhalin Energy Investment.

Conflict in Ukraine

Shell announced in February that it would sell its Russian investments due to the conflict in Ukraine, including Sakhalin-2.

And in April it said it would take a £3.8billion hit by leaving Russia.

The project, which supplies about 4% of the world's LNG market, is 50% owned and operated by Gazprom.

Mitsui has a 12.5% stake and Mitsubishi 10%.

Shares in Mitsui and Mitsubishi fell 6% in trading on Friday on concerns about losses.

According to the decree, Gazprom will keep its stake, but other shareholders must ask the Russian government for a holding in the new firm within one month.

The government will then decide whether to allow them to keep a stake.

Potential buyers

Shell has been in talks with potential buyers for its holding in the project, including some from China and India, according to previous reports.

The firm's chief executive Ben van Beurden said last week that Shell was "making good progress" in its plan to exit the joint venture.

"I cannot tell you exactly where we are because it's a commercial process, so I have to respect confidentiality," he added.

Japan has previously said it would not give up its interests in the Sakhalin-2 project, which is important for its energy security, even if asked to leave.

Saul Kavonic, head of Integrated Energy and Resources Research at Credit Suisse, said Russian LNG production from projects like Sakhalin-2 was likely to suffer over time as foreign expertise and parts became unavailable.

"This will tighten the LNG market materially this decade," he said.

FTSE 100

The UK's top share index, the FTSE 100, was ahead 62 points at 7,231 shortly after opening this morning, after closing flat on Friday.

Brent crude futures were today up 0.47% at $112.02 a barrel.

No FTSE 350 companies are due to report today.

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