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The Scotsman: Russian threat to Shell over environmental inspections

By: Martin Flanagan
Published: Oct 26, 2006

RUSSIA has prolonged an environmental inspection of Royal Dutch Shell’s dollars 22 billion Sakhalin oil and gas project and may prosecute the scheme, a minister said yesterday.

Yuri Trutnev, Russian’s natural resources minister, told a meeting of environmental inspectors and officials from Sakhalin Energy: “The breaches at Sakhalin-2 fall under five articles of the criminal code.

“This falls under criminal law and we think it’s necessary to apply it. All the relevant documents should be sent to the prosecutor general within two weeks.”

Trutnev cited illegal tree felling as among the violations.

The comments were seen as sharply ratcheting up of the tension between the Russian authorities and the British/Dutch oil giant, and of the wider pressure on many foreign energy operators in Russia.

Many analysts believe efforts to renegotiate oil contracts in that country alongside allegations of environmental damage are really about the government seeking more control of the country’s multi-billion dollar oil industry.

On Tuesday, BP boss Lord Browne deflected questions about pressures foreign companies are facing in Russia.

He said: “There has been much speculation covering our Russian activities, but in reality there has been no change. Our relationships with the government and our partners [in the TNK-BP joint venture in the country] remain strong.”

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