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Sakhalin II Cost Overrun: $20 billion, £22 billion, $25 billion or $26 billion?

Dear Mr Van der Veer

Reference my email of 26 Sept: Email to Jeroen van der Veer: the Sakhalin II crisis

Bloomberg have been in contact with me overnight kindly providing the precise calculation for the Sakhalin II $22 billion project cost (which they have cited again in an article published today).  In other words, it was not an error, but a deliberate step up in the figure quoted: a Bloomberg article on 24 September was still quoting the $20 billion figure.  

Confusion reigns… 

A Wall Street Journal report this morning is still using the $20 billion sum. 

Bloomberg insists that the correct figure is $22 billion. 

As we have previously pointed out to you, a figure of $25 billion was mentioned in The Observer article on Sunday.  

Until such time as Shell clears up the confusion over this hugely important issue, we stick by our figure of $26 billion, which is based on information from usually reliable Shell insider sources.

Given the gravity of the current crisis, it really is imperative that the confusion is ended. 

What is the current highest projected Sakhalin II project cost stated in Shell internal documents? 

The answer will be of considerable interest to your project partners, shareholders, employees and the Russian government.  

The stability and reputation of Royal Dutch Shell is at stake if the truth is being deliberately withheld at this crucial time. 

Yours sincerely
John Donovan 


Malcolm Brinded, Chief Execution, Shell Exploration & Production
Richard Wiseman, General Counsel, Shell International Petroleum Company Limited

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