3 problem. Russian Lobbying
A number of powerful domestic firms and businesspeople opposed PSAs (an agreement between a government and a company in which the government awards to the company the right to extract and develop a natural resource), insisting that they unfairly favoured foreign firms. Khodorkovskii, an opponent of new PSA legislation, was widely known to have lobbied the Duma against PSAs very intensely. In May 2003, the Duma tightened requirements for new PSAs, making them allbut impossible to acquire.

Strengths
The Soviet Union was endowed with enormous natural gas and oil reserves.
Soviet Union was allocated oil and gas by planners at effective prices far below those of the world market.
Russia constituted 30% of the world’s total reserves in gas.
Great occurrence on the doorstep of Asia.
Support both on the island and in Moscow of the late governor, Egor Farkhutdinov and later Ivan Malakhov.
Remarkable synergy with the local administration.
A strategic alliance with Gazprom, Russian natural gas monopoly.
Marketing success.
Marketing power and credibility of combination of Mitsubishi, Matsui and Shell.
Increasing uncertainty about the other sources: the Middle East and Indonesia.

Weaknesses
Sacrificing a lot of interests in other projects to buy Marathon’s stake in SEIC.
In the beginning – possibility to work only during the summer (during the rest of the year production complex was embedded in ice).
Heavy investments of billions of dollars.
Harsh weather, uncharted land.
Extraordinary technical complexity.
Lack of civil service infrastructure to implement the terms of the PSA.
Russian firms, who produced many of the goods and services necessary, had little or no experience with offshore production facilities and building LNG