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MosNews: Environmental Watchdog Seeks to Annul Licenses of State Oil Company Rosneft

Created: 20.10.2006 12:23 MSK (GMT +3), Updated: 12:41 MSK

Russia’s environmental protection agency Rosprirodnadzor has submitted the documents on revoking licenses held by the Sakhalin branch of state-controlled oil company Rosneft. This information was reported by the country’s Natural Resources Ministry on Thursday, Oct. 19.

The ministry said serious violations had been revealed during inspections of Sakhalinmorneftegaz’s compliance with environmental protection legislation. The company in question works on the oil-rich island in Russia’s Far East, which is also the site of the controversial Sakhalin-2 project led by Anglo-Dutch oil major Royal Dutch/Shell.

“The Federal Service for the Oversight of Natural Resources has submitted to the Federal Agency for the Management of Mineral Resources documents on revoking production licenses issued to Rosneft-Sakhalinmorneftegaz,” the ministry said in a statement that was quoted by RIA Novosti.

Environmental experts have established instances of land and water pollution at two major fields being developed by Rosneft — at Katangli and Central Okha, on the northeast coast of the island — and decided to launch an administrative probe into the company’s activities in the area.

Russia’s environmental authorities have been stepping up pressure on oil producers. In September, the Natural Resources Ministry withdrew a key permit for Shell’s Sakhalin-2, being implemented under a product-sharing agreement dating back to 1994.

They also warned the country’s largest private producer Lukoil that it might lose at least 20 licenses for failure to develop oil and gas fields in Western Siberia and the Urals.

Some analysts say the latest moves are linked to the Kremlin’s goal of increasing state control over the energy sector, while others say that authorities are just trying to draw everyone’s attention away from the scandal with Shell. The majority of experts agree that there will be no actual license recall and that Shell’s work under 1994 PSA will continue.

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