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Posts on ‘September 26th, 2006’

Email to Jeroen van der Veer: the Sakhalin II crisis

Dear Mr Van der Veer

Can I please press you to clear up the confusion over the projected cost of the Sakhalin II project? My father, Alfred Donovan, raised this vitally important issue in his email to you yesterday (Email to Jeroen van der Veer: Resolving the Sakhalin II impasse).

It is imperative because the current crisis has come about as a result of the doubling of costs from $10 billion to £20 billion. The Putin government is understandably concerned that the date when revenues are going to start flowing to Russian state coffers from the Sakhalin II PSA will now be delayed by many years.  

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Regnum – Moscow, Russia: Sakhalin Energy expects Oleg Mitvol’s check

On September 27-30, activists of ecological NGOs will visit Sakhalin region to assess the ecological situation in the region. Rosprirodnadzor (Russian federal environment protection agency) Deputy Head Oleg Mitvol will take part in the visit, REGNUM was informed at the ministry of natural resources.

It is planned that helicopters with the delegation aboard will fly over objects of infrastructure that are being constructed as part of the Shell Company’s Sakhalin 2 Project. Oleg Mitvol will meet with representatives of the Sakhalin Energy Company and attend session on environment protection in the framework of the “Oil and Gas of Sakhalin 2006” Conference.

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RosBusinessConsulting: Federation Council to examine Sakhalin-2 project agreement

RBC, 26.09.2006, Moscow 18:27:59.

The Russian Federation Council has instructed the concerned committees to clear up the situation surrounding the Sakhalin-2 project.

Thus, the Federation council instructed the Committee for Economy, Business and Property and the Committee for Science, Culture, Education, Healthcare and Environment to work out the issue.

 The Federation Council Chairman Sergei Mironov said that the deputies would need to find out what the conditions of the project agreement were and if Russia’s interests were being observed. Also, the senators are concerned whether the rights of the Western investors are being protected and whether environment legislation is being followed.

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Bloomberg: Russia Delays Shell Cancellation Threat to Oct. 20 (Update2)

By Torrey Clark

Sept. 26 (Bloomberg) — Russia gave Royal Dutch Shell Plc almost a month to remedy violations at the $22 billion Sakhalin-2 oil and gas project, before the government decides whether to cancel a key permit for the development.

Shell must respond to government requests for proposals on fixing environmental and safety problems, Natural Resources Minister Yuri Trutnev said today in Moscow. His ministry yesterday started a review of Sakhalin-2 that will conclude on Oct. 20, after which it will decide whether Shell can finish building pipelines and a plant to liquefy natural gas.

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The St. Petersburg Times: France Demands Total Support Over Oil License

Reuters
26 September 2006
 
PARIS — France hopes Russia will allow energy company Total to continue with its production sharing agreement in Western Siberia, Foreign Minister Philippe Douste-Blazy said on Sunday.The Vremya Novostei newspaper on Friday quoted a source close to Russia’s Natural Resources Ministry as saying that it was only a matter of time before Total’s PSA (production sharing agreement) license for the Kharyaga project was withdrawn.

Asked whether France had received any guarantees, Douste-Blazy said: “To my knowledge no, but I really hope that the good relations between France and Russia translate very quickly into the possibility for Total to continue its whole program in Russia.”

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Reuters: Russia calls time-out in campaign against Shell

26 Sep 2006 16:14:19 GMT
Source: Reuters
By Elif Kaban and Gleb Bryanski

MOSCOW, Sept 26 (Reuters) – Russia called a time-out on Tuesday in its campaign against environmental violations and cost overruns at Royal Dutch Shell’s Sakhalin-2 oil and gas project after strong criticism from foreign governments.

In an announcement likely to ease tension, Natural Resources Minister Yuri Trutnev said work on the giant offshore project in Russia’s Far East could continue while a full-scale ecological probe, due to start on Oct. 25 and last a month, is held.

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BBC News: New deadline for Sakhalin project

Sakhalin II

26 Sept 2006

Russia has said it will delay halting Shell’s $20bn (£10.5bn) gas and oil project off of its Pacific coast while it conducts a new environmental study.

Natural Resources Minister Yuri Trutnev said the probe may take up to a month.

Russian authorities have threatened to revoke the project’s licence if concerns over its impact on the local environment are not addressed.

Analysts have suggested the move is a bargaining tool aimed at securing a Russian role in the Sakhalin 2 project.

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AFX News: EBRD delays decision on Sakhalin-2 while situation remains unclear

26 September 2006

LONDON (AFX) – The European Bank for Reconstruction and Development, which should have given its decision on financing for the Shell-led Sakhalin-2 oil and gas project this summer, said that it would delay its decision while the Russian legal position remained unclear.

Current uncertainty over the project ‘does not allow the EBRD to progress’ over the matter, a spokeswoman for the bank told AFP.

Russia has threatened to halt the Sakhalin-2 oil and gas development project off Russia’s Pacific coast unless the Anglo-Dutch group Shell corrected environmental damage done to the site.

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Bloomberg: Russia Delays Shell Cancellation Threat to Oct. 20 (Update1)

By Torrey Clark

Sept. 26 (Bloomberg) — Russia gave Royal Dutch Shell Plc almost a month to remedy violations at the $22 billion Sakhalin-2 oil and gas project, before the government decides whether to cancel a key permit for the development.

Shell must respond to government requests for proposals on fixing environmental and safety problems, Natural Resources Minister Yuri Trutnev said today in Moscow. His ministry yesterday started a review of Sakhalin-2 that will conclude on Oct. 20, after which it will decide whether Shell can finish building pipelines and a plant to liquefy natural gas.

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The Houston Chronicle: Russian Auditors Query Shell Gas Project

By ALEX NICHOLSON AP Business Writer
© 2006 The Associated Press
26 September 2006

MOSCOW — Russian authorities will try to avoid shutting down a Shell-led liquefied gas project off the eastern island of Sakhalin, the natural resources minister said Tuesday. But the minister, Yuri Trutnev, warned that the project was riddled with serious environmental violations.

A final decision on whether to withdraw a key license at the Sakhalin-2 project will be made by the ministry within a month after experts from a state environmental safety watchdog complete an audit, Trutnev said. The auditors headed to the region Tuesday.

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Reuters: Russian politicians emphasise Shell’s rights

Tue Sep 26, 2006

MOSCOW, Sept 26 (Reuters) – The speaker of Russia’s upper house of parliament and the governor of Sakhalin island on Tuesday emphasised the economic rights of the Shell-led (RDSa.L: Quote, Profile, Research) Sakhalin-2 project, which has been under fire from Moscow.

Their comments offered encouragement to the oil and gas project after it came under attack from other Russian officials for doubling its costs to $20 billion and the Natural Resources Ministry ordered a major environmental investigation.

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theage (Australia): Russian squeeze on Shell sparks UK response

Blair Putin face off

Wednesday 27 September 2006

THE British Government has raised concerns with Russian President Vladimir Putin over last week’s withdrawal of Shell’s permit to develop the £10 billion ($A25 billion) Sakhalin-2 energy project, suggesting the move could spark a diplomatic row.

Approval by the Russian Natural Resources Ministry for Shell’s liquefied natural gas project on Sakhalin Island, in the far east of Russia, was abruptly withdrawn last week on environmental grounds.

A spokesman for the British Prime Minister’s office said on Monday that “the Government is raising its concerns about the decision with the Russian Government. Downing Street is following this very closely”.

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