The so-called 3M exploration consortium, which won the hotly contested auction for the right to explore for oil and gas reserves off Sakhalin in Russia's Far East, has become the 3M and an S group.


Marathon Oil, McDermott International and Mitsui, which won the auction in March, have decided to admit Shell, which earlier was part of a rival consortium with the Japanese giant Mitsubishi.


The tender auction for a feasibility study of the Sakhalin contract attracted great interest both because of the huge potential of the waters off Sakhalin and because the auction was the first major mining operation to be put out under the Russian government's new procedures for foreign investment in mining.


Shell Development Sakhalin now owns 20 percent of the consortium. Marathon and Mitsui have 30 percent and McDermott the remaining 20 percent.


The 3M consortium had initially tried to bring in Mobil as a fourth, however it was unable to reach agreement. Shell seems to have been included on the basis of its technical expertise in offshore gas and oil fields, and to spread risk in the costly project.


Once the consortium has finished its feasibility study, more corporate jostling is expected before contract is finalized.