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Posts on ‘October 16th, 2006’

BBC Monitoring Service: Russian official puts cost of Sakahlin-2 environmental damage at 50bn dollars

Published: Oct 16, 2006

Excerpt from report by Russian news agency ITAR-TASS

Moscow, 16 October: The cost of making good the environmental damage caused by the operator of the Sakhalin-2 project will be astronomical, between 10bn and 50bn dollars. This estimate was given in a conversation with an ITAR-TASS correspondent by deputy head of Rosprirodnadzor [Russia’s Federal Service for the Regulation of the Use of Natural Resources] Oleg Mitvol, who this month headed an inspection carried out the agency at the facilities of the project’s operator, the Sakhalin Energy company.

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Reuters: Shell says oil price drop won’t cut energy projects

Mon Oct 16, 2006 1:41pm ET
By Tom Doggett

WASHINGTON, Oct 16 (Reuters) – Shell Oil Co. has no plans to cut back on its investments in energy exploration projects because of the steep drop in crude oil prices, the company’s president said on Monday.

The price for U.S. oil traded at the New York Mercantile Exchange has fallen from just over $78 a barrel in mid-July to around $59 on Monday.

John Hofmeister, the president of Shell Oil, which is the U.S. unit of Royal Dutch Shell Plc (RDSa.L: Quote, Profile, Research), said his company would continue with its planned energy projects, including expensive drilling in the deep waters of the Gulf of Mexico, even if the oil price fell to half the current level.

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MosNews: Russian Government Considers Major Sanctions Against Sakhalin-2 Operator Shell — Official


( Yuri Trutnev, Russia’s Natural Resources Minister)

Created: 16.10.2006 17:29 MSK (GMT +3), Updated: 17:29 MSK,

Russia’s Natural Resources Minister Yuri Trutnev said on Monday, Oct. 16, that major sanctions may be imposed against the operator of Sakhalin-2 oil and gas project Royal Dutch/Shell due to environmental violations.

The vast project has met with strong opposition from environmental groups and authorities over accusations of inadequate safety, massive volumes of waste disposal, seismic threats, erosion, and threats to marine life. The Natural Resources Ministry withdrew a key permit for the project in September.

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Reuters: UPDATE 2-Russia pledges to check all oil firms amid Shell row

Mon Oct 16, 2006 12:23pm ET
By Mikhail Yenukov and Tanya Mosolova

MOSCOW, Oct 16 (Reuters) – No big oil firm in Russia will be spared from a campaign of environmental inspections in coming months, officials said on Monday, a move analysts said may be designed to shade attacks on a Shell-led (RDSa.L: Quote, Profile, Research) project.

Russia’s Natural Resources Ministry said on Monday it had asked the Federal Tax Service to provide information on 398 licences held by Russia’s top oil firm LUKOIL, following a threat to withdraw 20 licences last week.

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RIA Novosti: Billions needed to clean Aniva Bay in Sakhalin project- watchdog


20:05 | 16/ 10/ 2006 

MOSCOW, October 16 (RIA Novosti) – Billions of dollars will be needed to alleviate the environmental impact in the Aniva Bay caused by the vast Sakhalin II oil and gas project in Russia’s Far East, an environmental watchdog official said Monday.

Mass fish and crab kills have been reported in the area, and inspectors earlier established that a vessel dumped a mixture of methylene dichloride and lubricating oil into the bay. Russian officials accuse project operator Sakhalin Energy of major environmental violations, and the Ministry of Natural Resources last Monday annulled the 2003 environmental expert review for the $20 billion project, which is led by Royal Dutch Shell (55%).

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The Wall Street Journal: Shell Addresses Ecological Issues Over Sakhalin II

October 16, 2006 2:04 p.m.

The head of Royal Dutch Shell PLC said the oil producer had addressed Russia’s environmental concerns at its troubled $20 billion liquefied-natural-gas project on the Far Eastern island of Sakhalin.

The case, which saw Russian regulators freeze a key environmental permit in September, has rattled investors who suspect the charges are being used to pressure the company to reshape the original 1990s deal to the Kremlin’s benefit.

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Dow Jones Newswires: Shell Manager Warned Of Sakhalin Faults, Gas Risk-Email

Dow Jones Newswires

16 Oct 2006 15:35 CEDT

LONDON (Dow Jones)–A Royal Dutch Shell (RDSB.LN) manager sent e-mails in 2002 expressing concern that the designs for oil and gas wells on Russia’s Sakhalin Island didn’t properly address seismic risks.

The e-mails from Hans Bouman, a natural-gas field manager, to Engel Van Spronsen, then Sakhalin Energy’s technical director, raise the possibility that the company’s risks at the Sakhalin II project go beyond the river bank erosion now under Russian government scrutiny.

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Irish Independent: Corrib gas won’t help reduce our domestic bills

Published: Oct 16, 2006

* I am writing in reference to Shells recent advertising campaign with the caption ‘It began life 250 million years ago. Now its time to bring the gas ashore.’

It is not surprising that Shell has resorted to the medium of advertising in an attempt to embed it’s propaganda in the minds of the Irish people regarding the Corrib gas field. Advertising is a medium well known for its deceptive characteristics. The old slogan that ‘four out of five doctors prefer’ a particular product may be truthful as far as it goes, but suppose that only five doctors were asked and all of them worked for the firm producing the product? Whether this gas comes onshore or remains at sea it will have zero impact in reducing our domestic gas bills.

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AFX Europe (Focus): Lukoil faces sweeping tax checks by Russian environment agency UPDATE

Published: Oct 16, 2006

MOSCOW (AFX) – Russia’s environmental monitoring agency called for tax checks on all licences owned by Lukoil, the country’s biggest oil producer, a senior official told Agence France-Presse.

“We are interested in their payments. We have information that they are not paying,” said Oleg Mitvol, deputy head of the powerful agency, known by its Russian name Rosprirodnadzor.

Mitvol said that documents had been sent today with a formal request to Russia’s federal tax service for information on payments made by Lukoil on the 398 licences it owns in Russia.

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Financial Times: Russia threatens to revoke 19 Lukoil oilfield licences

By Neil Buckley in Moscow and George Parker in Brussels
Published: October 16 2006 03:00 | Last updated: October 16 2006 03:00

Russia’s natural resources ministry has threatened to revoke 19 oilfield licences belonging to Lukoil, extending to Russia’s biggest oil producer the sort of treatment recently shown to foreign energy companies.

The ministry said on Friday it might withdraw 11 Lukoil licences in Komi, northern Russia, because of failure to develop fields fast enough, and eight in Siberia’s Khanty-Mansi region.

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Sunday Telegraph: Cross Putin and die

President Putin of Russia

(Since Putin became President, 13 journalists have been murdered)

By Olga Craig
(Filed: 15/10/2006)

Late on Thursday night, Dimitri Zakayev hurriedly moved his wife and four daughters from their Moscow home to a rented dacha deep in the heart of the outlying countryside. So sudden was the family’s flit that the children’s bicycles, their computers and Zakayev’s beloved library of books, too bulky to pack in a small, hired truck, had to be left behind.
The day before, Zakayev had unexpectedly resigned from his job as a journalist, pleading with his employers, a small, biweekly newspaper circulating in central Moscow, to keep his departure a secret for as long as possible. “Please, don’t tell anyone, especially not the authorities, until you have to,” he begged them.

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Daily Mail: Sakhalin shatters last illusions about Russia’s reliability

Monday View: 16 October 2006
By Robert R Amsterdam

OVER the last few weeks the largest foreign investments in the Russian energy industry have come under attack as part of an ongoing Kremlin campaign to consolidate state ownership in the sector.

Despite having pumped billions of dollars into the Sakhalin oil and gas project, and despite full compliance with its legal obligations, Royal Dutch Shell has been threatened with revocation of its development licence.

The ‘siloviki’ – former intelligence and military strongmen who have muscled their way into President Putin’s Kremlin and state-owned energy companies – are laughing their way to the bank.

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Reuters: Norway lets Shell restart Draugen oil production

OSLO, Oct 16 (Reuters) – Norway’s oil safety authority has let Royal Dutch Shell (RDSa.L: Quote, Profile, Research) restart production at the Draugen oilfield, after halting it pending improvements to lifeboats, but has not allowed Statoil (STL.OL: Quote, Profile, Research) to resume output at the Snorre field.

Shell is operator at Draugen, which produces 80,000 barrels of oil equivalent per day (boepd).

“The Petroleum Safety Authority Norway (PSA) has given Shell a dispensation such as it may restart the device (platform),” it said in a statement on Monday.

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RIA Novosti: Russia’s environment ministry continues probes into oil cos.

14:20 | Monday 16/ 10/ 2006
(Adds paragraphs 3-9)

MOSCOW, October 16 (RIA Novosti) – Russia’s natural resources minister pledged Monday to carry out further checks into compliance with environmental legislation by oil companies working in Russia, including major independent and state-controlled crude producers.

“This is a routine process,” Yury Trutnev said. “We will tighten environmental requirements. This will also apply to LUKoil, Rosneft, and TNK-BP.”

Russia’s environmental authorities have recently been upping pressure on oil producers. In September, the Natural Resources Ministry withdrew a key permit for the vast Sakhalin II hydrocarbon project in Russia’s Far East, led by Anglo-Dutch oil major Shell, and last week launched checks into Russia’s largest crude producer, LUKoil [RTS: LKOH].

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Financial Information Service: Mitsui and Mitsubishi Support Gazprom’s Participation in ‘Sakhalin-2’ Project

VLADIVOSTOK, October 16. /FIS/. Mitsui and Mitsubishi (Japan) support possible participation of ‘Gazprom’ OJSC in ‘Sakhalin-2’ Project.

This was announced by representatives of both corporations – members of the oil and gas project, reports ‘Vedomosti’ newspaper.

Employees of Mitsui and Mitsubishi said that these companies do not exclude the possibility of selling part of their shares to ‘Gazprom’ OJSC but intend first to study this issue after completion of the negotiations between the concern and Shell, reports PrimaMedia.

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MosNews: Shell Welcomes Gazprom at Sakhalin, Says All Issues Resolved


(Sakhalin II Photo from )

Created: Monday 16.10.2006 13:04 MSK (GMT +3), Updated: 13:04 MSK, 3 hours 11 minutes ago

International oil major Royal Dutch/Shell said on Monday, Oct. 16, that it has fully addressed all ecological issues at its Sakhalin-2 oil and gas project. The company’s chief executive Jeroen van der Veer told an investment advisory council chaired by Russia’s Prime Minister Mikhail Fradkov that the company is seeking dialogue with the Russian authorities.

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Reuters: Russia threatens Shell with sanctions over Sakhalin

Mon Oct 16, 2006 7:00 AM ET
By Douglas Busvine

MOSCOW (Reuters) – Russia threatened Royal Dutch Shell on Monday with the full armoury of sanctions at its disposal if it fails to address environmental violations at its Sakhalin-2 project, which has run far over budget.

But, Resources Minister Yuri Trutnev said, Shell had no reason to fear for the future of the vast oil and gas project if it tackles a catalog of environmental concerns raised by Russian officials.

“If the company presents an exhaustive plan to remove environmental damage … then it is completely obvious that there will be no point in stopping the project,” Trutnev told reporters on the fringes of a meeting with foreign investors.

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MarketWatch: Oil companies revamp ethical plans as legal risk grows

Today, Royal Dutch/Shell Plc (RDSB.LN) is still reeling from allegations, that it denies, of complicity in human rights violations in Nigeria’s Ogoniland in the 1990s. On Sept. 29, a New York court rejected a motion by the company to have counts of “crimes against humanity” dismissed in a case accusing it of facilitating repression at the time. Shell declined to comment on the ruling.  Shell may now lose its license in Ogoniland due to a decade of inactivity, following the unrest and subsequent negative publicity.

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Reuters: UPDATE 1-Shell CEO says Sakhalin issues fully addressed

Mon Oct 16, 2006 3:35am ET

MOSCOW, Oct 16 (Reuters) – Royal Dutch Shell (RDSa.L: Quote, Profile, Research) has fully addressed all ecological issues at its Sakhalin-2 oil and gas project and is seeking dialogue with the Russian authorities, the company’s chief executive said on Monday.

Sakhalin-2 has come under pressure from the Kremlin over a number of ecological and technical issues, which analysts say is part of a broader Kremlin campaign to limit foreign involvement in the strategic energy sector.

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The Times: Russia reassures Shell on Sakhalin

October 16, 2006

Stop press 
Russia is not considering freezing the Sakhalin-2 oil and gas project, which is led by Shell, Oleg Mitvol, deputy head of Russia’s ecological monitoring agency, said. “Russia will respect and fulfil its international obligations, in particular with respect to foreign companies,” he said. Last month Russia moved to revoke authorisation for the $20 billion (£10.8 billion) project.

The Economist: Energy reserve

Posted Monday 16 October 2006

SIR – You rightfully acknowledge the legitimacy of environmental concerns about Shell’s project on Sakhalin Island, yet you question the motivation of the Russian government for enforcing its environmental regulations (“Yukos revisited?”, September 23rd). Why is there no criticism of Shell for damaging the environment so badly that such intervention is needed?

Independent Russian and international organisations monitoring Shell’s project have documented a consistent pattern of environmental violations for years. These are not limited to a failure to control contractors, but include fundamental assessment and design flaws that began at the project’s conception and will cause damage to the environment throughout its lifespan.

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Times of Oman: Shell training 20 Omanis to be administrative assistants

Monday, October 16, 2006   

MUSCAT — As part of the continuing series of social investment initiatives being held since 2002, Shell has signed an agreement with the Arabian Training Centre LLC and Oman Society for Petroleum Services (OPAL) to provide training for 20 young Omanis to become professional administration assistants.

The nine-month programme has been specifically designed to attract secondary school graduates from Batinah region.

The training covers the following topics. Induction and health, safety, environment (HSE) for office environment, general English language, computer studies and familarising with keyboard, business communication and office procedures, effective communication, customer service and telephone skills, presentation skills, discipline and building an effective team skills, basic mathematics and statistics, working with human resources and time management. It also includes on-the-job-experience.

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