The European Bank for Reconstruction and Development is unlikely to approve a loan for the giant Sakhalin 2 oil and gas project in Russia’s Far East, following its effective re-nationalisation by the Kremlin, according to officials.

The recent emergence of Gazprom, the Russian state-controlled gas company, as the majority owner of the project “made it more difficult” for the EBRD to approve a $300m loan to the $20bn project, the London-based multi-lateral bank said on Monday.