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UpstreamOnline: Dutch demand answers from Kremlin

Bot  By Upstream staff

(Call for clarity: from the Netherlands’ Foreign Minister Ben Bot)

Dutch Foreign Minister Ben Bot has demanded clarification from Russia over the Ministry of Natural Resources’ revocation of environmental permits for the $20 billion Shell-led Sakhalin 2 development.

“The way the Russian authorities have acted towards Shell is worrying and undermines confidence in Russia,” Forbes quoted Bot as telling Netherlands broadcaster NOS.

On Monday, a spokesman for the Ministry of Natural Resources said that “the prosecutor general on Saturday issued an order to cancel … the approval of the ecological assessment. We are required to fulfil this order”.

The prosecutor general has justified the withdrawal of the permits granted to Shell during the 1990s by saying the group had not provided “in-depth or complete enough documents” to prove it was going to respect environmental standards.

But analysts saw the decision as a political one by the Kremlin, aiming to increase its control over the strategic energy sector.

Shell owns 55% and is the operator of the giant Russian gas field. Japan’s Mitsui & Co Ltd and Mitsubishi Corporation hold the remaining 45%.

Cost overruns have marred the project, doubling the cost of developing the field to $20 billion and delaying its start-up to 2008 from 2007.

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