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LEAKED EMAILS LOST SHELL BILLIONS ON SAKHALIN-2

John Donovan Royal Dutch Shell Plc.com

John Donovan: Royal Dutch Shell Plc.com

LEAFLET GIVEN TO SHELL EMPLOYEES AT SHELL CENTRE, LONDON FROM MONDAY 2nd NOVEMBER 2009

LEAKED EMAILS LOST SHELL BILLIONS ON SAKHALIN-2 

By John Donovan of royaldutchshellplc.com: Nov 2009

At first glance the headline appears to be a ridiculous claim. However, it happens to be supported with independent verifiable evidence from reputable sources and has been published, unchallenged by Shell, in magazine and newspaper articles, including half-page features in The Sunday Times and The Guardian. 

The claim was also mentioned in a newsletter published in July 2007 by the One World Trust, an independent think tank and research organisation affiliated with the UK Houses of Parliament and the United Nations. 

The article is in italics. 

Accountability in Practice: Royaldutchshellplc.com–

The power of a website

The website Royaldutchshellplc.com is a gripe site established by John Donovan and his father, Alfred, to stream information to the public about the Shell Group, a collection of oil, gas, and petrochemical companies. John Donovan’s use of the website to blow the whistle on Shell’s environmental abuses in the Sakhalin project exhibits the power an individual website can have in holding a global organisation to account.

A ‘gripe site’ is traditionally one “devoted to the critique and/or mockery of a person, place, politician, corporation, or institution.” However, with the right contacts, a gripe site can become much more than simply a soap box. As The Royal Dutch Shell plc website shows, a gripe site can have a profound impact on global organisations.

Donovan’s battle with Shell began over breaches of contract with regards to sales promotions campaigns he and his father devised that were used to attract customers to Shell petrol stations. Shell and the Donovans settled out of court. But it was after Shell apparently made disparaging remarks about the Donovans that John set up Royaldutchshellplc.com.

Donovan “wanted the site to become a magnet for people who had a problem with the company.” The site has not only cost Shell billions of dollars in Russia, but Prospect Magazine reports that the Ogoni tribe of Nigeria also use the website to spread information about Shell’s activities in the Niger Delta, and that even Shell insiders unhappy with the company use it.

Royaldutchshellplc.com is just one of many examples of how the Internet makes it possible for concerned individuals to initiate discussion about global organisations, post and share information about organisational actions and their impact, and provide a common forum for affected stakeholders. At the very least, ‘gripe sites’ such as this have a valuable watchdog function and remind global companies of the power of public opinion – thus forcing them to confront weaknesses in their own accountability.

ENDS 

Shell’s loss of its majority holding in the Sakhalin-2 project and consequential loss of revenues, resulted from internal Shell/SEIC documents and emails supplied to us by insider sources, that we passed on to the so-called “Kremlin attack dog”, Oleg Mitvol.

Mitvol used it as evidence to force Shell to surrender its majority stake in Sakhalin-2. He was unambiguous in identifying me as being the source of the only evidence on which he threatened litigation against Shell/SEIC. 

EXTRACTS FROM ARGUS MEDIA INTERVIEW WITH OLEG MITVOL: 19 NOV 2006

Q: Who will take Sakhalin Energy to court? 

A: I will take them. I have documents proving that the Sakhalin Energy management was aware that the company violated technical standards, but carried on trying to meet project deadlines and refused to stop work. I am confident of winning my case in Stockholm. 

Q: What documents are these? Where are they from? 

A: I have email correspondence between executives in Sakhalin Energy management from 2002. I received these letters from John Donovan, owner of the anti-Shell website www.royaldutchshellplc.com. I received them on 19 October and forwarded them to Sakhalin Energy with a request for an official reply. But I have not received any reply so far. I presume that they are in shock. 

Q: How could you prove that these documents are genuine? 

A: They appear genuine and we have special services working to prove this. Once they have been verified, we will have enough evidence to take Sakhalin Energy to court. If we win, the Sakhalin 2 consortium should pay compensation for all the environmental damages – which will come to over $10bn – as well as compensation to the state for loss of revenues caused by the additional delays. 

The World Wildlife Fund subsequently submitted the same evidence to the UK House of Commons Environmental Audit Select Committee. The relevant minutes of evidence, including a link to the leaked documents and emails, was ordered by the Committee to be published under parliamentary copyright. 

RDS losses from the forced sale to Gazprom of half of Shell’s interest in Sakhalin-2: 

1). In the RDS Annual Report 2007, Shell declared: ““The main impact on the Consolidated Balance Sheet was a decrease of $15.7 billion in property, plant and equipment and $6.7 billion in minority interest……”” This was partly offset by an increase of $3.7 billion under equity accounted investments. This means there was a loss of over $18 billion under those headings alone. 

2). We then have to add the reduction of proven reserves. Shell admitted in the same Annual Report (2007) a loss of “402 million boe of proven reserves” arising from the same transaction. An article published in The Observer newspaper on 16 March 2008 estimated the loss was actually 1.1 billion boe. At $80 per barrel, colossal sums are generated whichever figure for lost “proven reserves” is used in the calculation. 

Hence the headline on this leaflet is fully justified. As recognised by the One World Trust, a gripe site can indeed have a profound impact on global organisations.

Following an approach from a U.S. government representative, we have more recently supplied Shell high-level confidential documents and emails to the U.S. investigators of the Gale Norton corruption scandal. They say we have been “a great help”.

 

LEAFLET ENDS

BLOOMBERG ARTICLE: SHELL MAY CUT RESERVES AT LEAST 4 PERCENT ON SAKHALIN

UPDATE IN 2012

Video clip from TV documentary segment in which government minister Oleg Mitvol confirms John Donovan as being the source of important information supplied to the Russian government about Shell’s mis-0conduct as the majority partner in the Sakhalin2 project.

(Feature about John Donovan in TV programme – European Journal – broadcast in English language across Europe in May 2012)

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