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Be afraid, be very afraid

IT SHOULD be no surprise that Gazprom has bullied its way into Sakhalin Energy. Moscow has an all-consuming interest in controlling energy flows and projects. Its destruction of Yukos and orchestrated transfer of the company's main producing asset to a state-owned company stands out as an indication of the lengths to which the Kremlin is prepared to go to achieve that end. The government had also made clear its contempt for production-sharing agreements (PSAs). Its distaste was intensified by Sakhalin Energy's cost overruns, which will significantly delay royalty and tax payments to the state, because, under PSA terms, the investor is allowed to recoup costs first. In the government's defe

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