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February 2nd, 2006:

The Moscow Times: Sakhalin Official Supports Protests Against Shell

Friday, February 3, 2006. Issue 3345. Page 7.
Bloomberg
LONDON — Sakhalin Governor Ivan Malakhov supported ecologists' protests against a venture led by Royal Dutch Shell, which plans to invest $20 billion in the Far East to make liquefied natural gas, because of possible environmental damage.
Malakhov met Thursday with officials from the European Bank for Reconstruction and Development in Yuzhno-Sakhalinsk, the capital of the Sakhalin region, the governor's press service said in a statement. The bank is holding public consultations on Shell's Sakhalin-2 project before approving a loan to fund the project.
More than 300 ecologists held a demonstration on Sakhalin Island on Jan. 28 in front of the gates of the proposed LNG plant.
They were protesting “against the widespread damage,” Sakhalin Environment Watch said last week.
Mitsubishi and Mitsui, Japan's largest trading companies, are Shell's partners in the project.
“The main disputes about the project are caused by untimely Sakhalin-2 participants' reaction to incurring problems, which quickly get public reaction,'' Malakhov told the bankers.
Malakhov joined last week's protesters, who included fishermen and local citizens, the environmental group said. “This was the first time that the regional governor has publicly backed public concerns about the Sakhalin-2 mega project,'' the group said.
Sakhalin Energy Investment, the project operator, said on Jan. 26 that it did not support the protest. The company, in which Shell holds a 55 percent stake, outlined in the statement its measures to cut environmental impact and preserve bio-resources. The demonstration “will neither contribute to the strengthening of the dialogue on these issues, nor help to resolve their concerns,'' Sakhalin Energy said last week. read more

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Associated Press: Royal Dutch Shell 4Q profit drops 4 pct.

The company's main long-term problem is seen as the gap between the amount of oil and gas it is currently pumping and how much it will be able to produce in the future. AMSTERDAM, Netherlands
By TOBY STERLING
Associated Press Writer
FEB. 2 12:39 P.M. ET Royal Dutch Shell PLC reported a 4 percent drop in fourth-quarter net profit and a 2 percent decline in sales Thursday, as lower production and the impact from hurricanes Katrina and Rita outweighed the high price of oil.
Net profit at the world's third-largest oil producer came to US$4.37 billion (euro3.61 billion), down from US$4.57 billion, while sales fell to US$92.8 billion (euro76.6 billion) from US$95.1 billion.
By comparison, the largest global oil company, Exxon Mobil Corp. reported a 27 percent rise in fourth-quarter earnings earlier this week.
At the same time, Shell's full-year earnings rose 37 percent to US$25.3 billion (euro20.8 billion) while sales rose 12 percent to US$379.0 billion (euro312.9 billion). The earnings were the largest ever for a British or Dutch company, but are likely to be passed by BP next week.
Shell's new CEO Jeroen van der Veer tried to emphasize the positive in the results, citing “record cash and earnings” for the full year and “success in exploration and gaining access to new resources.”
In Amsterdam trading, Shell shares fell 2.6 percent to close at euro27.39 (US$33.17).
The company's main long-term problem is seen as the gap between the amount of oil and gas it is currently pumping and how much it will be able to produce in the future.
Shell is recovering from a major accounting scandal in which it was forced repeatedly to reduce the size of its estimated oil reserves in 2004 and 2005, ultimately forcing the departure of then-Chief Executive Philip Watts. It also led the company to merge its British and Dutch arms into a single company.
Van der Veer Shell said Shell planned to invest US$19 billion (euro15.7 billion) in 2006, most of that in “upstream” activities: exploration and production. He said the company expects to add around 750 million to 850 million barrels to proven reserves this year, and expects to return to a “100 percent reserves replacement” by 2008.
But Fortis Bank analyst Paul Andriessen said the 2005 rate of 60 to 70 percent replacement was about 10 percent less than he expected. Van der Veer's 2008 target may be seen as unrealistic, a main reason why investors were disappointed with Thursday's results, he said.
Still, he was positive about Shell's outlook. “The oil price in 2006 as a whole will probably be higher than it was in 2005 and you'll see that reflected in next year's earnings,” he said.
Despite President George W. Bush's call this week on U.S. consumers to break their “addiction” to oil, CEO Van der Veer said the global appetite for energy is likely to increase by half over the next 25 years, which means a continued dependency on fossil fuels for a long time.
“No one should underestimate the energy challenge facing us all,” he said, adding that Shell was also investing heavily in biofuels.
Jerry Taylor, a senior fellow at the Cato Institute, agreed that oil will continue to be the main source of global energy for years but said the company's current profits should be seen as exceptional.
Although crude oil futures were trading above US$65 per barrel Thursday, Taylor said recent industry deals show oil reserves can be purchased for less than US$15 per barrel and new fields are discovered for as little as US$9 per barrel, suggesting Shell may reach its replacement targets after all.
More importantly, Shell and others are constantly improving the yield from fields they do develop, he said.
He said the current high oil prices are part of a cyclical boom that will likely lead to over-investment in the industry and a possible price collapse at the end of the decade.
In any case “the lights are not about to go out on the industrial economy,” he said.
For the quarter, Shell's earnings from exploration increased 22 percent to US$3.56 billion (euro2.94 billion) because of the high prices, even as oil and natural gas production declined in terms of volume.
Hurricane Katrina drove crude oil prices to a high of US$70.85 a barrel after it battered the Gulf Coast, and Shell said its crude oil prices were around 29 percent higher in the fourth quarter than a year earlier.
Shell said it expected the hurricane damages to rigs and pipelines to total around US$275 million (euro227 million), of which US$130 million (euro107.3 million) has already been spent. It said it didn't know how much of that it will ultimately get back from insurance companies.
In Shell's oil refining division, profits fell by 51 percent to US$828 million (euro683.7 million) due to lost intake during the hurricanes, and lower refining earnings. The company had also had an US$405 million windfall in 2004 due to a revaluation of assets. read more

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BBC NEWS: Shell in talks on field closure

Oil giant Shell is to begin talks on taking Britain's biggest oilfield out of service, BBC Scotland has learned. Shell said it was looking to set up a new structure to manage the four platforms in the Brent field, which is located off Shetland.
The company said it wanted to consult widely on options for what happens when oil and gas reserves ran out.
Shell denied a claim from the offshore union OILC that workers had been told decommissioning could start by 2010.
The news comes on the day Shell reported a record annual profit for a UK-listed company – £13.12bn.
The results follow a year in which the cost of crude jumped from below $45 a barrel to break the $70 mark.
Managers on Brent's four oil platforms have recently been briefing workers that major changes were on the way.
Benchmark price
The company wants to treat the Brent platforms as a separate entity and is seeking to recruit a new asset leader to carry out the task.
The remit will be to maximise the potential of Brent's remaining reserves of oil and gas.
They will also be expected to come up with options for when the oil and gas runs out.
Shell want to consult widely to avoid the protests that surrounded its attempts in 1995 to decommission the Brent Spar loading facility by dumping it in the Atlantic.
Brent is Britain's biggest oilfield.
It has been producing oil and gas for 30 years and provides the benchmark price for North Sea crude.
The offshore union OILC said workers had been told decommissioning would start with Brent Alpha in 2010 and end with Brent Charlie in 2015. read more

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The Scotsman: Shell rejects 'profiteering' claims

Royal Dutch Shell hit back at claims it was profiteering at the expense of consumers after revealing it made £12.93 billion last year – the highest profits yet for a UK company.
The energy giant raked in the equivalent of almost £1.5 million an hour on the back of surging oil and gas prices, but insisted it was a good corporate citizen of the UK.
Shell said that only a tiny amount of its profits were made at the petrol pumps. It said it had paid twice as much as tax to the Treasury as in 2004 and large sums had been invested in its network of refineries and oilfields in the UK.
Accusations that Shell was cashing in at the expense of motorists came from consumer groups, which demanded that more should be done to protect consumers.
Fuel Lobby, which organised protests in an effort to force the Government into bringing down tax on fuel last year, said: “Yet again the British motorist is being hammered by, if not excessive taxation, then excessive profiteering.”
Such criticism was rejected by Shell chief executive Jeroen van der Veer who said: “It is not correct to think that all the profits are coming out of the UK. It is a world market and these are world market prices. This is the reality of the world.”
Shell said its profits came from more than 140 countries, with operations outside the UK making up significantly more than 90% of the haul. Mr van der Veer said Shell had invested significantly in the UK over the last 10 years and this had been very important for the UK economy.
His comments cut little ice with campaigner National Energy Action (NEA) which claimed Shell's profits came at the expense of one million more UK households falling into fuel poverty.
Motorists are paying more at the forecourts after the cost of crude oil rose to more than 70 US dollars a barrel last summer, prompted by a particularly bad hurricane season in the Gulf of Mexico.
Although tax makes up two-thirds of the cost of petrol in the UK, a Treasury spokesman said fuel duty had fallen by around 14% in real terms since 2000, saving around 7p a litre for the average motorist. read more

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Times Online: Shell deserves congratulations, not catcalls

As the oil giant's record-breaking annual profit draws criticism from all sides, Graham Searjeant asks: what's our problem?
Rationally, we should be celebrating the highest profit ever reported by a British, or at least partly British, company. The newly merged Royal Dutch Shell, the world’s third biggest stock market listed oil group, made $22.94 billion last year, equivalent to £12.9 billion at today’s exchange rate, although it is soon likely to be eclipsed by BP, the second biggest.
The biggest beneficiaries will be people working right across the private sector, whose pension funds are the dominant holders of Shell shares. They should benefit directly from dividends to the funds, from reinvestment of undistributed profits and, more obliquely, by Shell buying back $6 billion worth of its own shares to reduce the supply. From Aberdeen to Amsterdam, ordinary people’s retirement prospects are a little better thanks to Shell.
But this is Britain so, instead of celebration, Shell’s announcement was greeted by a ritual chorus of boos and catcalls from all sides.
Consumer groups, echoing anger at high oil prices, charged Shell with profiteering and claimed it had single-handedly pushed a million vulnerable British people into fuel poverty, even if its main business is oil, rather than gas. The head of the Transport and General Workers Union bizarrely urged the government to impose a windfall tax in order to help the “pensions crisis”.
Environmental groups such as Friends of the Earth complained that Shell was evilly profiting from climate change, so a windfall tax should be levied to invest in alternative energy sources. Perhaps the money would come from the investment Shell itself is making in renewables, not least in the ethanol technology newly favoured by President Bush.
In a similar vein, the Amicus union, which also favours more tax on Shell, demanded more investment in the North Sea. Yet the Chancellor has already announced an extra 10 per cent tax on North Sea profits and , as a sadly predictable result, Shell has cut its investment plans for the North Sea in favour of other oil provinces.
Even the City was chippy and unhappy. Analysts complained that Shell’s profits were not as buoyant as those of Exxon Mobil, the industry’s number 1, whose results produce hand-wringing in America but little criticism here. Profits in the October to December quarter fell below City forecasts, a deadly sin; payouts should have been higher and Shell’s record at finding oil , though much improved last year, was still not good enough to replace what it took out of the ground. So the shares fell as much as 2 per cent.
The pension funds that own Shell have certainly benefited enormously from the high price of oil, which had nothing to do with their own or Shell’s efforts.
By the same token, Shell is hardly to blame. Opec is a cartel dedicated to keeping oil prices high, so that the money can feed the state coffers of Saudi Arabia, Iran, Indonesia, Nigeria, Algeria, Venezuela, Kuwait and the Gulf states, where not a little is wasted in excess, war or corruption. Gazprom, the state-controlled Russian gas giant, has consciously imposed higher prices on key customers for political purposes. In the UK, we as taxpayers have gained more from higher oil prices than Shell because of the higher VAT on fuel, let alone taxes on North Sea activity.
Profit that is publicly announced, not just counted in private, is the easiest target for our discontent. If Shell wants to avoid the flak, it had better arrange for itself to be taken over by the Iranian government. Don’t be a British company with shares quoted on the stock exchange. read more

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Investments & Pensions Europe: Shell facing costs from Dutch funds’ action

IPE.com 2/Feb/06: GLOBAL – Oil giant Shell today says the two class actions brought against it by Dutch pension schemes and German and Luxembourg institutions could dent its earnings significantly.
Shell said in its full-year results that the claims are linked to a pending securities class action in the US.
Shell management stated it could not predict when the matters would be resolved nor how they would be resolved.
It is also “currently unable to estimate the range of possible losses from such matters and does not currently believe the resolution of these pending matters will have a material impact on Royal Dutch Shell’s financial condition, although such resolutions could have a significant effect on periodic results for the period in which they are recognised”.
Last month, IPE reported that Stichting Pensioenfonds ABP, the Dutch civil service fund, is leading a group of 26 funds in a class action lawsuit against Royal Dutch Shell over the oil giant’s reserves scandal.
The group is seeking hundreds of millions of dollars in damages following Shell’s improper accounting of its oil and natural gas reserves between 1997 and 2003.
The schemes, which bought over 200m between 1999 and 2005 in predecessor firm Royal Dutch, claim they acquired their shares at artificially inflated prices and that the overall value of their holdings suffered massive losses.
Shell did not respond to IPE questions on the matter.
In other news, the South African arm of Shell has been accused of “improperly” using surplus pension fund money according to a 2001 amendment of the Pension Funds Act.
According to local reports, a tribunal set up by Registrar of Pension Funds has ruled that Shell should repay millions of rands to the staff DB pension scheme.
The ruling found, amongst others, that the Shell Southern Africa Pension Fund had enjoyed a contribution holiday since December 2001.
Reports also state that a shortfall was created because insufficient assets were shifted following a transfer of members from other funds – largely Shell subsidiaries Cera, Easigas and Veetch.
The Financial Services Board (FSB) is reviewing the ruling, but has yet to make a final decision.
The scheme, Alexander Forbes (scheme administrator) and Edward Nathan (scheme attorneys) could not be reached for comment.
By Meagan Rees read more

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Friends of the Earth: Shell reports record profits – Pacific Grey Whales pay the price?

Friends of the Earth today (Thursday 2 February) called for a windfall tax on the oil giant Shell which has reported record annual profits of £12.93bn [1]. The campaign group said Shell was profiting from climate change and people and the environment were paying the price.

The group also highlighted the threat posed by Shell’s activities to the last remaining population of Western Pacific Grey Whales. Shell is currently seeking funding for a further oil platform and pipeline off the Russian island of Sakhalin, disturbing the endangered species’ feeding grounds [2]. An independent international panel of experts convened by the World Conservation Union last year warned Shell that the Sakhalin II project increased the risk of extinction for the Western Pacific Grey Whale [3]. Shell agreed to alter the route of the pipeline, but has refused to relocate the platform, as recommended by the experts. read more

This website and sisters royaldutchshellgroup.com, shellnazihistory.com, royaldutchshell.website, johndonovan.website, and shellnews.net, are owned by John Donovan. There is also a Wikipedia segment.

ShellNews.net: THE SHELL ENRON LINK

By Alfred Donovan

The following information confirms how the Royal Dutch Shell Group (at the time under the leadership of Sir Mark Moody-Stuart) planned to “emulate Enron’s success”. That may help to explain the reserves fraud. Shell’s reputation is now ranked alongside Enron and perhaps senior current and former Shell directors may end up in the same courts as the directors of Enron. It may not be the emulation that Shell had in mind.

PRAVDA
News and Analysis on-line
2002.07.15/15:23
Troubles At Shell Trading Unit read more

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Forbes: Shell 4Q Profit Drops on Storm Impact

Royal Dutch Shell PLC said Thursday fourth-quarter earnings dropped 4 percent and sales dipped 2 percent, as the impact from hurricanes Katrina and Rita outweighed the high price of oil.
Net profit was $4.37 billion, down from $4.57 billion, while sales fell to $92.8 billion from $95.1 billion.
By comparison, Exxon Mobil Corp. reported a 27 percent rise in fourth-quarter earnings earlier this week.
Shell's full-year earnings rose 37 percent to $25.3 billion while sales rose 12 percent to $379.0 billion. The earnings were the largest ever for a British or Dutch company, but are likely to be passed by Britain's BP PLC next week.
Shell's new CEO Jeroen van der Veer tried to emphasize the positive in the results, citing “record cash and earnings” for the full year and “success in exploration and gaining access to new resources.”
“Our financial position is solid, and we returned over $17 billion to our shareholders through dividends” and share buybacks in 2005, Van der Veer said. “We focus on delivery now and building the future.”
In Amsterdam trading, Shell shares fell 1.5 percent to 27.72 euros ($33.57).
Despite President Bush's call this week on U.S. consumers to break their “addiction” to oil, Van der Veer said the global appetite for energy is likely to increase by half over the next 25 years, which means a continued dependency on fossil fuels for a long time.
“No one should underestimate the energy challenge facing us all,” he said.
Shell, which planned to pump $19 billion into investments in 2006, is increasingly looking to “new energy solutions so that we can grow without environmental degradation,” with a focus on developing biofuels, he said.
The company's main long-term problem is seen as the gap between the amount of oil and gas it is currently pumping and how much it will be able to produce in the future. In terms of volume, oil production fell 8 percent in the quarter and 7 percent in the year, while gas was down 6 percent for the year and 10 percent in the quarter.
For the quarter, Shell's earnings from exploration increased by 22 percent to $3.56 billion (2.94 billion euros) because of the high prices, even as oil and natural gas production declined in terms of volume.
The company said it expects to add around 750 million to 850 million barrels to proven reserves this year, and expects to return to a “100 percent reserves replacement” by 2008.
Analyst Antoine Leurent of KBC Peel Hunt said the results were more or less in line with expectations and the reserve replacement showed Shell is “getting back on its feet again.”
Hurricane Katrina drove crude oil prices to a high of $70.85 a barrel after it battered the Gulf Coast, and Shell said its crude oil prices were around 29 percent higher in the fourth quarter.
Hurricanes Katrina and Rita also knocked out rigs and caused other damage. Shell said it expected the hurricane damages to production to total around $275 million, of which $130 million has already spent. It said it didn't know how much of that it will ultimately get back from insurance companies.
In Shell's oil refining division, profits fell by 51 percent to $828 million due to lost intake during the hurricanes, and lower refining earnings. The company had also had an $405 million windfall in 2004 due to a revaluation of assets.
Van der Veer also welcomed the release Monday of four international workers who had been held hostage for two weeks by secessionists in southern Nigeria, and said his company would not abandon the African country.
“Shell has been in Nigeria for over 50 years, and we will stay there,” he told a news conference.
Shell is recovering from a major accounting scandal in which it was forced repeatedly to reduce the size of its estimated oil reserves in 2004 and 2005, ultimately forcing the departure of then-chief executive officer Philip Watts. It also led the company to merge its British and Dutch arms into a single company. read more

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The New York Times: Shell Profit Hits UK Company Record

By REUTERS
Published: February 2, 2006
Filed at 7:55 a.m. ET
Skip to next paragraph LONDON (Reuters) – Royal Dutch Shell Plc posted a record $23 billion profit for 2005 on Friday, up 30 percent from the previous year, as higher oil prices and fat refining margins outweighed a sharp fall in production.
Shell said in a statement on Thursday that current cost of supply (CCS) net profit, which excludes unrealized inventory gains, rose 3 percent to $5.395 billion in the fourth quarter.
Excluding exceptional items that resulted in a net gain of $34 million, the “clean'' figure was in line with an average forecast of $5.385 billion in a Reuters poll of 10 analysts.
Analysts consider the “clean'' net income figure as the best measure of an oil firm's underlying health.
Shares in the world's third-biggest listed oil company by market value fell, however, as investors focused on its weak performance upstream in finding oil and gas.
“Shell has had another poor performance with the drill bit,'' said Peter Hitchens, an oil analyst at Teather & Greenwood.
Investors were also disappointed, because Shell failed to copy Exxon Mobil in beating market forecasts earlier this week, when the U.S. major also posted a record $36 billion annual profit.
“The figures were fine, but didn't sparkle like Exxon's,'' said Brendan Wilders, an oil analyst at Oriel Securities.
In London, Shell “A'' shares fell 1.6 percent to 1,881 pence at 1100 a.m. British time, outpacing a 0.8 percent fall in the DJ Stoxx European oil and gas sector index.
NEW UK RECORD
All the oil majors are expected to report bumper results for 2005 thanks to prices that reached a record above $70 per barrel during the year and to record refining margins.
Shell's $22.94 billion CCS result for 2005 is also a record annual profit for a UK-listed company, analysts said, beating the previous record of $17 billion reported by Shell for 2004.
Its exploration and production business was the main profit driver, with earnings jumping 22 percent in the fourth quarter compared with a year earlier.
This came even though production fell to 3.5 million barrels of oil equivalent per day (boepd) from 3.84 million boepd in the fourth quarter of 2004. Hurricanes hit its production hard in the Gulf of Mexico in the past two quarters.
Shell replaced just 60 to 70 percent of the oil it pumped with new additions to reserves, measured under Securities and Exchange Commission rules, a Shell spokesman said.
This is well below the 100 percent rate needed to stop an oil firm's asset base from shrinking.
It is up, however, from its rate of 49 percent in 2004 excluding divestments, or 19 percent including divestments, the spokesman said. Analysts say this poor record is due to underinvestment in exploration from 1998 to 2004.
Shell said it continued to target 100 percent replacement over 2004-2008 but that most proved reserves would be added in the latter part of the period.
Analysts said this would be challenging. They are divided on whether Shell has turned around its upstream business after a reserves overbooking scandal in 2004 and massive cost overruns in 2005.
“(The target) would require the group becoming one of the best explorers among the integrated oil companies, rather than one of the worst,'' Hitchens added.
DISTRIBUTIONS DISAPPOINT
Shell also said it expected to return $5 billion to shareholders by repurchasing stock in 2006, in line with last year's share repurchases.
“They did have the flexibility to increase that, so I think some investors will not be impressed,'' Jason Kenney, head of oil and gas research at ING said.
Citigroup said in a research note that the failure to hike the buyback amount was “likely to raise question marks over whether the company is planning acquisitions.''
Chief Executive Jeroen van der Veer reiterated to journalists on a conference call that he did not think that acquisitions above $10 billion were likely to create value for shareholders but suggested that smaller ones could.
Shell also kept its dividend steady at 0.23 euros per share.
“A higher dividend would have been nice,'' Jaap Barendregt at FBS Bankiers said. read more

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MarketWatch: SolarWorld buys Shell's crystalline solar operations

Edited Press Release
BONN (MarketWatch) — German solar energy company SolarWorld AG (SWV.XE) said Thursday it will assume 100% equity interest in the crystalline solar activities of Royal Dutch Shell PLC (RDSA) subject to the approval of the anti-trust authorities.
The sale and purchase agreement signed by both parties results in the transfer of the following Shell locations: Vancouver, Washington and Camarillo, California, which manufacture solar silicon crystals, wafers, cells and modules, Gelsenkirchen, Germany, which produces solar cells, as well as the sales companies in Munich, Germany, Singapore and South Africa and the research and development team focusing on silicon technology based in Munich, Germany.
The production capacities that will be transferred to SolarWorld under this agreement amount to some 80 Megawatt. The Shell Solar Rural business is not included in the transaction.
The parties have agreed not to disclose the financial conditions of the deal.
-Contact: 201-938-5400 read more

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RIA Novosti (Russia): EBRD mulls financing for Far East energy project

12:06 | 02/ 02/ 2006
VLADIVOSTOK, February 2 (RIA Novosti, Veronika Perminova) – The European Bank of Reconstruction and Development will reach a decision within two months on crediting an energy project off the island of Sakhalin in Russia's Far East that has come under attack from environmentalists, the local administration said Thursday.
The Sakhalin Region administration said EBRD Secretary General Horst Reichenbach met with regional governor Ivan Malakhov in the regional center of Yuzhno-Sakhalinsk, and that the bank was considering providing a credit line to the Sakhalin II oil and gas development project.
Reichenbach said at the meeting that EBRD was currently reviewing its strategy in Russia and its Far East region for the next 2-3 years
The EBRD official said a bank delegation had met with the authorities and locals of the Korsakov district, where a protest was held Saturday against the construction of a natural gas liquefaction plant in area as part of the Sakhalin II project.
Malakhov said he supported the protesters' demands.
“The main source of dispute over the project is the slow reaction of participants in the Sakhalin II project to contentious issues that have arisen, against which the public has reacted swiftly,” the governor said.
On January 30, Russia's Green Party called for an investigation into the environmental damage caused by Sakhalin II, saying that an $11 million package of compensation from Sakhalin Energy to the local fishing industry was insufficient.
At a news conference with party representative Andrei Nagabin and Alexei Tyndik, a lawyer representing the interests of Sakhalin fisherman, Nagabin said, “The level of compensation should be calculated by independent specialists; funds received from the company have already gone to the construction of fish farms.”
Sakhalin Energy was established by Shell (which holds a 55% stake) and two Japanese companies, Mitsui (25%) and Mitsubishi (20%), to implement and develop the Sakhalin II project, which has an estimated cost of more than $20 billion. Sakhalin II is based on a production sharing agreement that was signed in 1994.
On January 27, Sakhalin Energy announced it had paid $11 million in compensation in October 2005 for environmental damage in the region.
In its statement, the company said, “The compensation paid went to developing four fish farms in Sakhalin, in accordance with an agreement between Sakhalin Energy, the administration of the Sakhalin Region, the Federal Fisheries Agency, and the state management of Sakhrybvod [the region's regulatory body for fishing]”
All construction and production work is being carried out on the basis of authorizing documents issued by the federal and local authorities, the company said, adding that work on installing a pipeline from the north to the south of the island was being carried out during the winter, when salmon does not spawn. read more

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ShellNews.net: WWF seeking information from those concerned about Sakhalin

Statement by WWF

Shell’s Sakhalin II project in far east Russia is an example of how not to do a mega-project. Its costs have doubled to US$ 20 billion, local communities are protesting over damage to fisheries, and the 100 remaining western gray whales are at risk of extinction. WWF’s views on the project can be found in the report “Risky Business” and on its website www.panda.org/sakhalin

Shell had already admitted it has managed environmental aspects badly, and has lost control of its contractors that are crossings the 1100 rivers on Sakhalin Island. The European Bank for Reconstruction and Development (EBRD) has acknowledged the project breached its environmental policy, but is considering whether to let Shell off and fund the project anyway. The EBRD has officially launched its consultation period on Sakhalin II. http://www.ebrd.com/new/pressrel/2005/175dec14.htm read more

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Shell Insider Article with Leaked Shell Internal document: Our "Leader" – TOM BOTTS: Shell Executive VP

FROM A SHELL INSIDER
Hello Alfred
Below is the crap we receive from our ‘leader’. It continues to baffle me that these politicians keep finding hollow words for their messages that never change. This cowboy from Wyoming expects a few things to be different this year (see bullet points at the bottom). This means in his eyes:
– We are NOT honest to each other.
– We do NOT learn quickly from mistakes
– There are gaps in the Operating Model (actually his personal invention)
– We do not simplify things and try to make shortcuts

All these statements are actually correct!!
Good to hear this from the ‘leader’ who is very good at scaring the hell out of his underlings and who simply will quench any opinion (and the bringer of that opinion) which does not lead to more bonus for himself. He is the prime example of how NOT to make a learning organisation.
A true learning organisation must be especially honest to itself. Bad news must travel fast without killing the messenger. And people must have fun. The rest will then follow automatically.
But surrounding oneself with sycophants, being very angry when bad news surfaces, destroying the messengers of the bad news and then publishing crap like the stuff below, is like in the old Kremlin days. They said something and did something else. We all know what happened to them.
I am so glad your website is open for sharing this with others.
A disgruntled shell employee.
LEAKED SHELL INTERNAL DOCUMENT DATED 30 JANUARY 2006
Message from Tom on 2005 Performance and Looking Ahead
30-Jan-2006
Tom Botts, Executive Vice President – Europe
Colleagues,
First, let me wish each of you a happy and safe New Year. I hope most of you were able to take some time off, relax, and spend time with family and friends. EP Europe is now in its third year—it's hard to believe. I want to tell you I am very proud of the progress we have made on many fronts. At the same time, I also fully recognise the many challenges we still have in front of us to really make EPE Europe 'be all it can be'. The key point for me is we are delivering very strong financial returns to the Group and our plateau production forecasts for the future extend further in time than ever before. In short, we are a cash engine for the Group and there is still a long future ahead of us.
Clearly the lowlights of 2005 are the four fatalities. We are making every effort possible to gain and embed all the learnings from these tragedies. Performance against our business targets was mixed. We generally did well on gas production, project delivery, providing growth opportunities, environmental performance, and recruiting new graduate and experienced people. We missed our targets on liquids production, opex, and of course have struggled getting the Corrib project back on track. Details of Group and EPE performance and the Business Performance Factor will be outlined in early February with the Q4 Business Results.
Looking ahead, we must shoot to meet or beat our EP Roadmap targets as outlined in the 2005 EPE Business Plan. Given the critical role we play in the Group, we must focus – month on month – on delivering our part. Our first priority remains safety. Thereafter the Roadmap targets of reserves, production, growth, project delivery, operational excellence and cost. All this is underpinned by using our professional skills and talents to their best effect. Those skills are our strength in EPE and they have really impressed me over the past 3 years. But we need to continue to help our people develop and contribute more effectively.
I know that last part is most important. If we don't get that right, we can't achieve what we've set out to do. Along those lines, I have sent a letter to your home address outlining the upcoming EPE Connecting Days which builds on the enhanced engagement we started at the ELN conference in Groningen in November. The EPE Connecting Days aim to bring together the entire EPE community to collectively review where we have come from, where we are going, and how we can make EPE better. My ELT colleagues and I look forward to seeing you all there!
Lastly, a word on what I expect to be different this year. Starting with myself and my Leadership Team, we will:
Have more honest talk and listening – bring issues into the room
Highlight successes, learn quickly from mistakes, and move on
Address the gaps in the operating model so we can maximise business value
Make the most of the EPE Connecting days to reengage the organization.
Find ways to simplify things, one step at a time

We are making progress and putting in place a sustainable foundation and legacy. As Jeroen said in his year end message, none of us joined Shell to be second best. If we stay on course, I know we will be a winning team!
Tom
Message from Tom on 2005 Performance and Looking Ahead
30-Jan-2006
Tom Botts, Executive Vice President – Europe
FROM A SHELL INSIDER: Hello Alfred: Below is the crap we receive from our ‘leader’. (Tom Botts, Shell Executive Vice President – Europe) read more

This website and sisters royaldutchshellgroup.com, shellnazihistory.com, royaldutchshell.website, johndonovan.website, and shellnews.net, are owned by John Donovan. There is also a Wikipedia segment.

Jyoti Munsiff: Shell’s Chief Ethics and Compliance Officer: analogous to putting a fox in charge of a hen house.

FROM A SHELL INSIDER

Dear Alfred

The message below was found on the Shell Web today. I have been with Shell for quite some years, but this beats everything. They are now mixing up the General Business Principles and Ethics (which are from the good old days and perfectly adequate today) with Legal Compliance.
In the past it was very simple: you behave decently and all was well. It was obvious to all one had to remain within the law. I understand that the enormous mountain of regulations and controls rolled out by the various Authorities needs sharpening up some internal processes so one does not forget to submit some document. Otherwise the shysters will get you on a technicality. read more

This website and sisters royaldutchshellgroup.com, shellnazihistory.com, royaldutchshell.website, johndonovan.website, and shellnews.net, are owned by John Donovan. There is also a Wikipedia segment.

Jyoti Munsiff: more analogous to a poacher turned gamekeeper

By Alfred Donovan
A Shell insider has drawn attention to the remarkable spectacle of Jyoti Munsiff, the former Company Secretary of Shell Transport, being appointed as the Chief Ethics and Compliance Officer of Royal Dutch Shell plc. They have amusingly used the analogy of “putting a fox in charge of a hen house”. With all due respect, the situation is more analogous to a poacher turned gamekeeper.
The first link below displays a letter that my son received some years ago from Ms Munsiff. As can be seen she was intent in her skilfully drafted letter from preventing the terms of a “Deed” from being disclosed to Shell shareholders.
The “Deed” in question was a Confidentiality Agreement/Deed signed on behalf of Shell UK Ltd by its then Managing Director David Varney and by Richard Wiseman who is General Counsel of Shell International. My son (John) and I signed on behalf of our former company, Don Marketing UK Ltd and as co-founders of an NGO, the Shell Corporate Conscience Pressure Group. (David Varney is now the head of the combined UK Inland Revenue and HM Customs and Excise.)
The primary purpose of the “Deed” was to impose confidentiality on us because Shell management did not want its shareholders to know what was going on in their name; in other words, a good old fashioned Shell cover-up involving the most senior executives of the Royal Dutch Shell Group. Top management were copied on the incriminating correspondence, including individuals who are still Shell directors.
The second link displays an astonishing letter from Mark Moody-Stuart, the then Chairman of Shell Transport who was sufficiently agitated to actually issue a threat against us on behalf of Shell UK Limited. Bizarrely, his wife, Lady Judy Moody-Stuart, subsequently intervened in relevant matters without her husbands’ knowledge.
The third link displays a copy of my sons reply to Mark Moody-Stuart. I draw attention in particular to paragraph five.
The last link displays a news article referred to in the correspondence with Moody-Stuart. It is recommended reading.
Jyoti Munsiff was up to her neck in trying to cover-up the cover-up (it is only in reference to Shell management that I could end up writing such a comment). Consequently I am shocked at her new role as the keeper of Shell ethics. Frankly it’s laughable (but I'm not laughing).
FIRST LINK
http://shell2004.com/2004 Documents/letters/letterfromshelltransportcompanysec6april98.pdf
SECOND LINK
http://shell2004.com/2004 Documents/letters/letterfrommarkmoodystuart6april1998.pdf
THIRD LINK
http://shell2004.com/2004 Documents/letters/letterfromjohndonovantoMoody-Stuart14april98.htm
FOURTH LINK
http://shell2004.com/2004 Documents/guardian/guardian15nov97.htm read more

This website and sisters royaldutchshellgroup.com, shellnazihistory.com, royaldutchshell.website, johndonovan.website, and shellnews.net, are owned by John Donovan. There is also a Wikipedia segment.
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