Shell, Mitsui Co. and Mitsubishi Corp. will each sell half of their stakes in the project to Moscow-based Gazprom, Shell and Gazprom said in a joint statement today. Hague-based Shell and its partners have invested $12 billion in the venture, which will be the first to produce liquefied natural gas in Russia.

``You are never going to have majority control under this regime in Russia,'' said Tim Harris, chief investment strategist for Europe, the Middle East and Africa at J.P. Morgan Private Bank in London, which manages $346 billion. ``That's a fact of life,'' he said. ``The resource opportunity in Russia is vast. The risk is political.''

The deal ends a yearlong campaign in which the government threatened to block Sakhalin-2's investment plans and cancel building permits on environmental grounds. European and Japanese leaders raised concerns that Putin's campaign to restore state dominance of the economy will undermine Russia's reliability as an energy supplier.

The government has said it's unhappy with the original production-sharing agreements, signed in the 1990s, that cover Sakhalin-2, Exxon Mobil's neighboring Sakhalin-1 project and Total's Kharyaga field in northern Russia. Under the agreements, negotiated when crude was a third of today's price, most of Russia's revenue would be deferred until the companies earned returns on their investments.

All eyes will now turn to BP's Russian joint venture, TNK-BP, which is already coming under increased scrutiny from the Kremlin.

In the latest episode, the head of the federal subsoil agency RosNedra, Anatoly Ledovskikh, has said that TNK-BP must accommodate Gazprom's refusal to let it build a pipeline into China.

"This is not an objective reason to change the licensing agreement... I very much hope that TNK-BP and Gazprom reach an agreement. They have no choice," he said.