Posts Tagged ‘Oleg Mitvol’

News articles generated by royaldutchshellplc.com and its Shell insider sources in 2009

Article by Glen Frost, Editor, The PR Report

Yes, 15 billion. This is the claim of John Donovan, a UK blogger who campaigns against  the global oil producing giant Shell (full name Royal Dutch Shell) using his blog www.royaldutchshellplc.com .

Arguably the most powerful blog in the world dedicated to covering one company; and intrigued as to how the site developed such influence, Glen Frost met with the blog’s founders, John and Alfred Donovan, to get the full story.

EXTRACTS

The blog is now so popular, and trusted, the site appears on the front page of major newspapers (see pictures), and has ex‐employees from Shell contributing regular articles

The Russian connection: the scoop that made the  Donovan’s blog famous

The Donovans had been collecting and publishing information online about Shell’s activities since 2001; this information dates back to the mid 1980’s and their former business relationship with Shell. Over the years, more and more people in the oil industry discovered the website, and the Donovan’ s have been swamped with information about Shell from both suppliers, contractors, insiders and former employees.

Some of this information concerned Shell’s activities in Russia from 1996. A Shell‐led consortium (called Sakhalin Energy) and the Russian Government entered into a production sharing agreement. It was information on alleged environmental abuses by the consortium from the Donovan’ s that killed the deal. John Donovan said he suspected his information was the trigger but didn’t know for sure until Oleg Mitvol, a senior figure in the Russian Government, stated so in a media interview.

Asked by a journalist from PetroleumArgus, a trade magazine, who his sources were for the environmental abuse charges that Mitvol laid against the Sakhalin Energy consortium, Mitvol, then deputy head of Russia’s environmental watchdog Rosprirodnadzor, said he had “email correspondence between executives in Sakhalin Energy management from 2002.”

The compromising material had come from Donovan, owner and blogger of the anti‐Shell website www.royaldutchshellplc.com, Mitvol said.

Donovan estimates the value lost to Shell is US$15 billion.

The Donovan’s website is a full frontal attack on Shell’s management and ethics. Shell has tried to shut the site down on the grounds that it uses the company name. However, the site www.royaldutchshellplc.com  makes no money, and, crucially, is registered in the USA, where laws on websites are weighted in favour of the domain owner.

“Our site receives up to 2.2 million hits a month; we want it to become a magnet for people who have a problem with the
company,” says Donovan.  “Many of the people using the site are Shell employees.

Blog publishes market sensitive information

Donovan publishes market sensitive information on the site, and he, and the website, are now quoted by esteemed news organisations like Reuters and The Financial Times. For example, Donovan  published information questioning the level of Shell’s reserves, in which the company was found to have inflated its oil and gas reserves by some 20% in 2003‐04, which led to negative media headlines.

The picture (right; The Daily mail, UK 8th Sept 2009) shows how Donovan’s blog published details of staff cuts before Shell had announced them to the markets and the media.

Because of the blog, and the Donovan’s insistence on publishing all information he can verify about Shell, good and bad, John Donovan’s influence with the media is now global, instant and at a senior level – John lists the names of all the UK, US and global media outlets, their Editors or senior correspondents covering corporate news or the oil sector as his contacts.

Shell’s external PR advisors

A post on the Donovan’s website links to an article in a recently published book on corporate reputation and the rise of blog sites that attack, or expose, poor corporate ethics and illegal or dubious corporate activity, and what CEOs should do about such sites; http://www.shellnews.net/images/CorporateReputationAED.pdf ‐ the book is written by Dr Leslie Gaines‐Ross, who, incidentally, was previously CMO of Burson‐Marsteller USA, who manage Shell’s public relations.

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EXTRACT FROM BOOK REFERRED TO ABOVE: “REPUTATION LOSS – 12 Steps to safeguarding and Recovering Reputation”

One such empowered activist is arch Shell critic Alfred Donovan. No one was more surprised than Royal Dutch Shell PLC to learn that this 88-year-old British army veteran had purchased the Internet domain name www.royaldutchshellplc.com. The gadfly Donovan was a well-known, though underestimated, critic of the company. By acquiring the domain name, Donovan obtained the perfect platform to voice his criticisms of the oil giant. Who would have thought a decade ago that such an unlikely individual could stand up to a corporate powerhouse, waging a war of words against one of the world’s largest companies?

Documents released by Royal Dutch Shell Plc under the Data Protection Act to John Donovan, a prominent critic of the world’s largest oil company, show that Shell does not deny that his intervention in the Sakhalin2 project in Russia cost Shell billions – according to the Sunday Times – $22 billion.

Shell internal correspondence from December 2006 to March 2007 reveal that Shell was concerned that:

“…the Sunday Times has picked up the Sakhalin/drilling leaked e-mail story from Donovan’s website, They are responding with agree Os and As that have been used previously with the Guardian, but are first trying to kill the story by pointing out that is old news – slim chance that this will work.”

The story said that insider information supplied by John Donovan to the Russian government official Oleg Mitvol, known as the “Kremlin attack dog”, had cost Shell $22 billion, according to calculations made by the newspaper based on information from Shell annual accounts.

The article also featured an interview with Mitvol in which he indicated his surprise at the lack of a fight put up by Shell before it surrendered its majority stakeholding in the project. The interview with him was mentioned in a Shell internal email dated Saturday 3 February 2007. Later that same day, just hours before planned publication on Sunday 4 February, the article, which was so embarrassing to Shell senior management, was killed.

A Shell internal email dated 22 March 2007 headed “Subject: RE: News Management Grid”, reported our speculation that Shell had managed to suppress the article. There was no confirmation, nor any denial.

A Shell internal email dated 20 July 2009 discussed a Sunday Times article that was published on 19 July 2009, two years after the aborted article. The new article, which had been scrutinized by Shell, contained the following reference to the same subject:

In 2005, when the Kremlin was building a case against Shell over the Sakhalin gas project, the Donovans provided confidential documents regarding alleged environmental infractions directly to Oleg Mitvol, the minister who led the case. Shell was ultimately forced to sell a stake to the Russians, leading to billions in lost revenue. Mitvol publicly acknowledged the help provided by the Donovans in building his case.

The Shell email took issue with a reference in the article to the outcome of the most recent High Court action John Donovan brought against Shell. The person who authored the email was apparently misled by the Shell press statement issued at the time, which was a classic example of Shell Media spin (outright deception).There was however, no challenge to the veracity of the statement about Shell Sakhalin losses.

An extract from a recent Guardian article covering the same issue:

Four years ago Shell was embroiled in a bitter dispute with Russia’s environmental regulator over drilling for gas at Sakhalin Island. It was eventually forced to relinquish its majority stake in the project, costing Shell billions in lost revenue. Later, the regulator, Oleg Mitvol, publicly acknowledged the Donovans’ help in getting information about alleged claims of environmental abuses by Shell.

It is notable that in none of the Shell internal communications has Shell ever taken issue with the claim that the involvement of John Donovan and his website royaldutchshellplc.com in Sakhalin2, did indeed cost Shell billions. It also resulted in the resignation of the Project Director and Deputy Chairman of Sakhalin Energy Investment Company, David Greer. But that is another story (scandal).

Related extracts…

Prospect Magazine: Rise of the gripe site: 25 February 2007

…it is the home of www.royaldutchshellplc.com, a website which can claim to have cost Shell billions of dollars—and helped Vladimir Putin score another victory over western energy interests.

one world trust Accountability in Action Newsletter July 2007:

Royaldutchshellplc.com – The power of a website:

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.

Mr. Mitvol, 42 years old, sprang to global prominence in 2006 when he accused Royal Dutch Shell of a string of environmental failings at its giant Sakhalin II oil and gas project in Russia’s Far East. Under pressure from Mr. Mitvol and other Russian officials, Shell, which had a 55% stake in the project, sold control to state-controlled OAO Gazprom. Shell now owns a 27.5% stake in the project.

Mitvol, deputy head of environment watchdog RosPrirodNadzor, led a 2006 attack on the Sakhalin-2 energy project that ended only after Royal Dutch Shell (RDSa.L) ceded control of the project to state-controlled gas giant Gazprom (GAZP.MM)

Mitvol was appointed deputy head of the environmental regulator in April 2004, but came to international attention in late 2006 when he led a campaign against oil major Shell that resulted in a lucrative project being sold to Gazprom.

RIA Novosti

Deputy head of Russian environmental watchdog dismissed

[caption id="" align="alignnone" width="200" caption=""Kremlin attack dog" Oleg Mitvol"][/caption]

20:55 | 09/ 09/ 2008

MOSCOW, September 9 (RIA Novosti) – A plaque bearing the name of Oleg Mitvol has been removed from the door of his office at the Russian environmental watchdog, the out-of-favor deputy head of Rosprirodnadzor told RIA Novosti on Tuesday.

Mitvol said the deputy natural resources minister, Semyon Levi, signed an order Tuesday on his dismissal due to personnel cuts, but failed to hand him the document.

Mitvol said the document was signed in the absence of Minister Yury Trutnev, who on Tuesday told journalists in Irkutsk that he hoped the conflict between Mitvol and his boss, Vladimir Kirillov, would be resolved.

“I would very much like to speak to Trutnev,” he said.

But a source in Rosprirodnadzor told RIA Novosti that Mitvol had been informed of his dismissal, which Mitvol denied.

In June, Kirillov dramatically reduced the role of his outspoken deputy, who had become known for high-profile campaigns against oil companies.

Mitvol was appointed deputy environment chief in April 2004 but came to international attention in late 2006 when he led a campaign against oil major Shell that resulted in a lucrative project being sold to Gazprom.

He brought the government’s attention to damaging development work being carried out through the Sakhalin II oil and gas project in Russia’s Far East, then led by Shell.

He has also spearheaded campaigns over ExxonMobil-led Sakhalin-I, the Kovykta gas field developed by TNK-BP, and a pulp mill next to Siberia’s Lake Baikal.

Although in most cases the environmental damage Mitvol has highlighted, including deforestation, toxic waste dumping and soil erosion, has been well documented by environmental groups, the campaigns have often been portrayed in the Western media as part of the Kremlin’s drive to bring key oil and gas assets back under its control.

Back in 2005, Mitvol gained publicity within Russia with widely reported cases involving pop diva Alla Pugachyova and electricity monopoly chief Anatoly Chubais over their country estates, which Mitvol said should be demolished because they had been built without planning permission in water-protection zones.

Reports that Kirillov planned to sack Mitvol emerged soon after the new chief’s appointment in January this year.

One of Krillov’s predecessors, Sergei Sai, tried to dismiss Mitvol in late 2006, but was overruled by the natural resources minister.

http://en.rian.ru/russia/20080909/116655565.html

Mr Mitvol had led the pressure on Royal Dutch Shell over its Sakhalin 2 oil and gas project off the east coast of Russia, which led to it having to cede control in the project to Gazprom.

Having bullied Shell into handing over control of its Sakhalin-2 gas field, we thought his reward would be the Order of Lenin, not a broom cupboard.

n 2006 he gained international attention by leading a campaign against oil major Shell that led to a lucrative project being sold to Gazprom.