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Email to Jeroen van der Veer: the Sakhalin II crisis

Dear Mr Van der Veer

Can I please press you to clear up the confusion over the projected cost of the Sakhalin II project? My father, Alfred Donovan, raised this vitally important issue in his email to you yesterday (Email to Jeroen van der Veer: Resolving the Sakhalin II impasse).

It is imperative because the current crisis has come about as a result of the doubling of costs from $10 billion to £20 billion. The Putin government is understandably concerned that the date when revenues are going to start flowing to Russian state coffers from the Sakhalin II PSA will now be delayed by many years.  

My father mentioned that even higher projected project costs are floating around: e.g. the $25 billion mentioned in The Observer article on Sunday and the $26 billion figure given to us by Shell insiders who have an excellent track record as being reliable sources of Shell confidential *leaked information. Today we have another figure quoted, this time $22 billion in the Bloomberg article: Bloomberg: Russia Delays Shell Cancellation Threat to Oct. 20 (Update2)

As you are aware, there have been accusations and controversy over the timing of the Russians being notified of the $10 billion overrun. The situation will become even more acute if a cover-up is now taking place about yet a further substantial escalation in costs.

Under the circumstances, I respectfully suggest that the issue is clarified as a matter of urgency with a press statement being released by Royal Dutch Shell Plc forthwith? This issue is probably the single most important one facing Shell and its stakeholders at what is a time of great uncertainty. 

I make this request as a member of Royal Dutch Shell Plc.  I have been a Shell shareholder for many years. 

I would ask you to seriously reflect on what will happen if you ignore this request and it subsequently emerges that the true scale of the Sakhalin II cost overrun has been hidden from investors and the Russian government.  My guess is that if authentic documentary evidence of a cover-up on this issue comes to light, it will spell the end for the current executive management of Shell.  

Yours sincerely
John Donovan


*We have for example published Shell internal emails within hours of them being sent, including one sent by you personally. 

PS. and are now operational.


Mr Malcolm Brinded, Chief Executive, Shell Exploration and Production

Mr Richard Wiseman, General Counsel, Shell International Petroleum Company Plc and its sister non-profit websites,,,,,, and are owned by John Donovan. There is also a Wikipedia feature.

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