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RIA Novosti: Russian govt. orders full report on Sakhalin II damage

YUZHNO-SAKHALINSK, October 25 (RIA Novosti) – Russia’s natural resources minister said Wednesday he has ordered that a comprehensive review of damage caused by the Sakhalin II oil and gas project in Russia’s Far East must be completed in a month, and for a full report to be drawn up within four months.

Yury Trutnev also said that all findings of earlier probes into the project, led by oil major Royal Dutch Shell, are to be submitted to the Prosecutor General’s Office within the next two weeks.

“Our intervention has probably come too late,” he added.

Trutnev said he hoped Sakhalin Energy, the project operator, will submit to the ministry a plan for rectifying its violations.

Russia’s authorities have been stepping up pressure in recent months on oil projects developed by foreign and domestic companies, which some experts view as the Kremlin’s attempt to increase state control over the energy sector.

In September, the Natural Resources Ministry withdrew a key environmental permit for the huge Sakhalin II oil and gas project, which is being implemented under a production-sharing agreement dating back to 1994.

In late September, the ministry also announced planned probes into another production-sharing agreement, the Kharyaga deposit in Northern Russia, implemented by the French oil major Total, and the Kovykta gas project in East Siberia, developed by the Anglo-Russian joint venture TNK-BP.

Trutnev also warned of a possible revocation of licenses from companies that violate legislation or provisions of agreements on production at mineral deposits.

Trutnev said companies may not necessarily know all the specifics of deposits in the initial development stages, which is why they must introduce timely changes by updating figures and rationalizing projects.

He pledged that the ministry will continue to demand compliance with licensing agreements and to “monitor their implementation.”

Trutnev cited a decline in the number of violations of licensing agreements, adding that the ministry was focusing on environmental issues.

He added that he hoped Total would rectify irregularities at the Kharyaga deposit, noting that the company has been given time to bring all its indicators into compliance with the licensing agreement.

“Serious violations have been exposed, particularly those relating to prospecting, drilling and production,” he said.

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