Tuesday 05 June 2007
By Alfred Donovan
The information below has been supplied to me by a Sakhalin-2 insider. Mr Keith Ruddock, General Counsel of Shell Exploration & Production Shell International B.V. has today confirmed the authenticity of the leaked email. He said “I confirm that the email attached below from Mr Greer does appear to be authentic”.
I had previously made the point to Mr Ruddock that if confirmed to be authentic, which it is, the email supported the credibility of the information supplied from this source. The allegations are very serious.
Supplied by “Sakhalin Whistleblower”.
For Publication –
Shell and Sakhalin II
It is now been publicly declared that Sakhalin Energy Investment Company Limited (SEIC) has recently seen Gazprom become the majority shareholder.Â As previously reported the SEIC Onshore Pipelines Departments senior management organisation is made up exclusively of Shell Employees.Â It has also been alleged that Shell are manipulating and fabricating information in order to create the impression that the construction of their onshore pipeline will be ready for the introduction of hydrocarbons RFH in December 2007.
SEIC management has now presented this date to their shareholders as the date upon which the RFH will be achieved. The Prime Contractor, Starstroi have been silent on this issue and it would be interesting to obtain their input to this debate. So why is the date in December 2007 so important?Â If completion of the pipeline construction is achieved in December 2007, it will illustrate a delay of 2 years. This again raises the question of why then would it matter if construction is complete in December 2007 or in 2008.
SEIC employs a number of in-house experts representing various pipeline engineering and construction disciplines. It is the job of these experts to advise on issues, which may contribute to or jeopardise completion of the pipeline by the completion date. A number of these disciplines have now produced information that illustrates completion in 2008. The plan for a December 2007 completion date allegedly excludes known operational, construction operations and procedural constraints, which determine feasibility. There are two members of SEIC senior management who have chosen to ignore SEIC in-house expert opinions in order to exclusively pursue a Shell specific directive. Mr David Greer and Mr Jaap Guyt have decided to exclude specialist knowledge or expert recommendation because it disqualifies a December 2007 completion date. SEIC will only incorporate the advice of their various experts if it supports a December 2007 completion.
By using their position and leverage within the organisation Mr Greer and Mr Guyt can not only force programme changes, but can also coerce staff into signing up under duress to a plan illustrating completion in December 2007. So not only is the completion date questionable, but also due to coercion of disciplines, it appears to be agreed by all. If the date is not achieved it can therefore be put down to the incorrect advice administered by SEIC experts. It would also be reasonable for Mr Greer and Mr Guyt to place reliance on this advice, when reporting to the Board. In fact, if it becomes blatantly obvious in the latter part of 2007 that the date is not achievable, Mr Greer and Mr Guyt will join the rest of the board in exclamations of disbelief! Clever? Well not really! So by now you may be wondering about the question referred to earlier. Why is the date in December 2007 so important?
Well to understand the importance of this question you need to imagine the consequences of the following two scenarios:
The pipeline is complete in December 2007 and the oil and gas can be pumped from the offshore pipeline and into the onshore pipeline, before the offshore platforms shut down for the winter freeze. Although Mr Greer will have made his exit before this date, he will be able to look back in years to come with his grandchildren on his knee with a sense of satisfaction. The project will be a success and all Shell employees will get handsome bonuses and shareholders will be able to calculate when revenue will be acquired.
The pipeline is not complete in December 2007. This will mean that the methods of getting the product will be limited.Â The offshore platform will shut down in December 2007 until May or June in 2008. This will delay SEIC in obtaining revenue for several months resulting in huge financial losses ($250million), together with increased costs for construction and if feasible the alternative methods for acquiring the product. Although Mr Greer will have made his exit before this date, he will have ensured that all of the project team have committed in writing to a date, which is not feasible. This is why the date in December 2007 is so important! SEIC have obtained a financial commitment from lending institutions and made a commitment to shareholders on the back of their assurance relating to revenue yields commencing from a specific date.
So we will have to wait to see which scenario will manifest itself in December 2007?
Now the above situation may appear somewhat humorous if it were not for the enormous pressure that Mr David Greer is putting on various members of the SEIC organisation. Any information relating to dates beyond December 2007 date is not accepted! People are not only being pressured into agreeing to the date, but also into risking their names and professional reputations.
It would not be difficult to establish the feasibility of the completion date, which until now has been communicated to SEIC shareholders through a number of presentations. What SEIC cannot manipulate is the technology which determines the sequencing and durations for operations. By careful examination of the programme it can be seen that at best it can be considered non-achievable.
Experience gained by SEIC departmental disciplines on previous projects has consistently provided evidence to increase the accuracy of risk assessments. These individuals were recruited because SEIC did not already possess the level of experience or expertise to effectively manage these areas. The risk analysis carried out within SEIC by these individuals has now identified a number of risks that are likely to occur.
The programme has undergone many changes in recent weeks and by reference to the current programme it is clear certain operations have not commenced, whilst others are behind schedule.
If SEIC were to request the resignation of Mr Greer and Mr Guyt they could then recruit a professionally qualified construction organisation. SEIC has become an organisation governed by Shell’s bureaucracy and corporate objectives. The current SEIC management can no longer effectively manage Sakhalin II.
This is an extract from an email from Mr David Greer sent out to selected Onshore Pipeline Personnel on the 18th April 2007
To: Guyt, Jaap SEIC-P-PDP; Kunz, Dennis C SEIC-AU; Boulstridge, Robert SEIC-P-PDP; Tattersdill, Alan SEIC-P-PDP; Primak, Boris SEIC-P-PDP; Harris, Wayne R SEIC-P-PDP; Porter, Simon DL SEIC-P-PDP; Dorsch, Ulrich W SEIC-P-PDP; Labrujere, Job J SEIC-P-PDP; Brooks, Graham Peter SEIC-P-PDP; Joos, Aaron SEIC-P-PDP; Burt, Stephen A SEIC-P-PDP; Baxter, Peter P SEIC-PDP; Shand, John SEIC-PDP; Martinez, Ramon SEIC-P-PDP; ‘LLinassi (E-mail)’
Cc: Zhironkina, Alexandra S SEIC-P-PDS; Briston, Gary SEIC-P-PDE; Wyper, Campbell SEIC-FCP; Hilhorst, Hein MJ SEIC-P-PDE; Farquhar, Bill SEIC-P-PDS; Mcgillivray, William D SEIC-P-ICT; ‘Mercer (CTSD), Hilary’; Meehan, David A SEIC-P-PSF; Clucas, Chris A SEIC-HRP; Vasyuk, Anna SEIC-FF; Belozerskikh, Sergey SEIC-P-PD; Parker, Robert S SEIC-AZ; Crowder, John SEIC-ALG; Shand, Alan SEIC-P-OPF; Nally, Stephanie O SEIC-P-PDE; McCourt, Eoin P SEIC-P-ICT; Bungey, Stephen SEIC-P-PDS; Jansen, Sjors SEIC-P-OPF; Kloeck, Gert MJC SEIC-P-PDS; Garcia-Cruz, Jorge A SEIC-P-PDB; ‘Richard Lewis’; GX SEIC Phase 2 PLT; Langford, Gawain SEIC-P-PDP; Lindsay, William J SEIC-P-PDP
Guyt, Jaap SEIC-P-PDP; Kunz, Dennis C SEIC-AU; Boulstridge, Robert SEIC-P-PDP; Tattersdill, Alan SEIC-P-PDP; Primak, Boris SEIC-P-PDP; Harris, Wayne R SEIC-P-PDP; Porter, Simon DL SEIC-P-PDP; Dorsch, Ulrich W SEIC-P-PDP; Labrujere, Job J SEIC-P-PDP; Brooks, Graham Peter SEIC-P-PDP; Joos, Aaron SEIC-P-PDP; Burt, Stephen A SEIC-P-PDP; Baxter, Peter P SEIC-PDP; Shand, John SEIC-PDP; Martinez, Ramon SEIC-P-PDP; ‘LLinassi (E-mail)’Zhironkina, Alexandra S SEIC-P-PDS; Briston, Gary SEIC-P-PDE; Wyper, Campbell SEIC-FCP; Hilhorst, Hein MJ SEIC-P-PDE; Farquhar, Bill SEIC-P-PDS; Mcgillivray, William D SEIC-P-ICT; ‘Mercer (CTSD), Hilary’; Meehan, David A SEIC-P-PSF; Clucas, Chris A SEIC-HRP; Vasyuk, Anna SEIC-FF; Belozerskikh, Sergey SEIC-P-PD; Parker, Robert S SEIC-AZ; Crowder, John SEIC-ALG; Shand, Alan SEIC-P-OPF; Nally, Stephanie O SEIC-P-PDE; McCourt, Eoin P SEIC-P-ICT; Bungey, Stephen SEIC-P-PDS; Jansen, Sjors SEIC-P-OPF; Kloeck, Gert MJC SEIC-P-PDS; Garcia-Cruz, Jorge A SEIC-P-PDB; ‘Richard Lewis’; GX SEIC Phase 2 PLT; Langford, Gawain SEIC-P-PDP; Lindsay, William J SEIC-P-PDP
Pipeliners All !
Many thanks to all of you for your contributions to this week’s Bi-Annual Challenge………..and what a Challenge it is going to be for all of us! From the outset, I want to assure you that despite the mutterings on the day and the challenges ahead, I have total faith in you and our collective ability to complete the task ahead of us.
However, some of the comments and body language witnessed at the Bi-annual Challenge meeting do suggest that PDP is running the risk of becoming a team that doesn’t want to fight and lacks confidence in its own ability. Surely, this is not the case? Pipeliners and Engineers, love to fight and win, traditionally. All real engineers love the sting and clash of challenge. All of you are here today on this project for one of several reasons, I suspect. Firstly, to earn a decent living for yourself and your loved ones. Secondly, you are here for your own professional self respect, because you would not want to be anywhere else. Thirdly, you are here because you are real frontier professionals and all professionals like to succeed. So why would any of you not want to rise up and overcome the remaining challenges?
When everyone of you, were kids, I am sure that you all admired the champion marble player, the fastest runner, the toughest boxer, the big league football players. Personally, I like most others love winning. I despise cowards and play to win all of the time. This is what I expect of each and everyone of you going forward this year. Nothing less. Strive to be proud and confident in yourselves, be proud of your tremendous pipeline achievements to date and lift up your level of personal and team energy to show everyone that you are a winning team capable to achieving this year’s goals. If you can crack this angle, I am very confident you can crack the job, with ease.
So Lead me, Follow me or Get out of my way; Success is how we bounce when we are on the bottom.
No one within SEIC appreciates the challenges that PDP have more than himself and I pledge my total support to assist you all in going forward . In fact today, I commissioned the establishment of a Pipeline Recovery Plan Support Team under the leadership of Stephanie Nally to assist all of you going forward. Details of the team are summarised in the enclosed email.
The contents of the above email although not explicit, do seem to imply that the following recipients are not as optimistic as Mr Greer, whose rhetoric is in contrast to the general consensus. The comments referred to were aggressively confronted by Mr Greer during the Bi-Annual Challenge. His subsequent email appears to shift toward a less autocratic position, to one of motivation. However, in terms of its motivational content it is considered more Mary Poppins, than Tony Robbins. Or perhaps the desperate rambling of someone who knows their deception will be exposed by the natural occurrence of future events.
So who were the recipients of Mr Greer’s email?
Jaap Guyt SEIC – Pipelines Project Manager
Dennis Kunz SEIC – Pipelines Onshore Readiness Manager
Robert Boulstridge SEIC – Onshore Pipelines Commercial Manager
Alan Tattersdill SEIC – Operations, Costs and Planning
Boris Primak SEIC – Pipeline Special Projects Manager
Wayne Harris SEIC – HSE and Risk Assurance Manager
Simon Porter SEIC – Finance Manager, Onshore Pipelines
Ulrich Dorsch SEIC – Deputy Section Manager, Section 1
Job Labrujere SEIC – Pipeline Section Manger, Section 2 & 3
Graham BrooksSEIC – Construction Support Manager
Aaron Joos SEIC – Senior Project Engineer, Access Roads
Stephen Burt SEIC – Company Site Representative, Section 4
Peter Baxter SEIC – Project Interface Engineer
John Shand SEIC – Telecommunications Project Engineer
Ramon Martinez SEIC – Commercial Marketing and Distribution
Lucio Linassi STARSTROI PROJECT DIRECTOR
Stephanie Nally SEIC – Team Leader, Pipelines Recovery Support Team.Â Tasked with recovery of delay and achieving December 2007.Â Has never worked on a Pipeline Project before and is not familiar with pipeline construction technology.Â The Well Paid Sacrificial Lamb?
Gawain Langford SEIC – Pipeline CSU Manager
William Lindsay SEIC – Engineering and Procurement Manager
Mr Greer has actively directed deals from behind the scenes and must accept responsibility for the consequences. Mr Boris Primak covertly arranges deals with Russian Companies in return for their assistance with obtaining permits and removing regulatory obstacles. Mr Greer has ensured that SU4 have work on the project and the deal is done, even before the Subcontract is produced. When the political situations dictates, no other supplier will be requested to provide quotes and the market therefore remains, untested! The deal is then implemented by agreements between Starstroi and the Supplier. It is therefore difficult to immediately associate Greer, et al.By reference to the recipients of Greer’s email, it is with some concern that all but Mr Linassi are SEIC Personnel, even though Starstroi are at least on paper responsible for construction.
If there was an investigation into the ownership and shareholders and history of a number of Starstroi suppliers, not least of all SU4 this might reveal some interesting names and obvious conflict of interests.