Gazprom Neft and Shell to Team Up on Shale Oil and Arctic

Gazprom Neft and Royal Dutch Shell will agree to drill for shale oil in western Siberia and explore Russia's Arctic shelf when President Vladimir Putin visits the Netherlands next week, the Kremlin said.

The deals underscore the Kremlin's drive to open up access to Russia's trove of hard-to-recover energy reserves to international energy firms with the expertise needed to secure its position as a leading global oil and gas producer.

Gazprom Neft and Royal Dutch Shell declined to comment.

The Kremlin also confirmed on Thursday plans announced earlier by Gazprom and Dutch natural gas firm Gasunie to sign an agreement to expand the Russian export monopoly's supply network to western Europe.

A Gazprom spokesman said the agreement would outline the export monopoly's plans to extend the Nord Stream underwater pipeline to new customers, which could include Britain. Gazprom heads the pipeline consortium, which includes Gasunie.

"There are no decisions, especially on the terms [of construction]," Sergei Kupriyanov said in a text message. "We are talking about the intention to cooperate in this field."

The U.S. shale drilling revolution has pressured energy prices globally and has prompted the Kremlin to encourage Russian firms to sign cooperation deals with companies that have expertise in the technology.

Russia has recently stepped up efforts to drill into tight oil, which accounts for roughly two-thirds of its 26 billion tons of recoverable reserves, a share that is rising as Russia's easily tapped conventional reserves are depleted.

During Putin's visit to the Netherlands, officials and businessmen on both sides will also sign several accords in the banking, chemical industry and scientific research areas.

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