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RIA Novosti: Top prosecutors may launch criminal case against Sakhalin II

13:33 | 27/ 10/ 2006 

MOSCOW, October 27 (RIA Novosti) – The Prosecutor General’s Office may launch a criminal case against the Sakhalin II oil and gas project in Russia’s Far East once the Ministry of Natural Resources submits a report on the environmental damage caused by the project, a spokeswoman for the country’s top prosecution body said Friday.

Earlier this week, Russia’s Natural Resources Minister Yury Trutnev gave the country’s environmental watchdog another month to complete its inquiry into alleged violations in implementing the Sakhalin II energy project. He said the result of the inspection will be submitted to the Prosecutor General’s Office.

“We are not excluding criminal proceedings,” Marina Gridneva said. “The materials will be thoroughly checked and the decision will be made.”

The multibillion-dollar project, led by Royal Dutch Shell, has been accused of inflicting large-scale damage on Sakhalin’s ecosystem, including illegal deforestation, the dumping of toxic waste, and soil erosion.

The production-sharing agreement behind the project, which allows Shell to comfortably recoup all its expenses before sharing any of its profits with the state, is also hugely unpopular with the Russian government.

Shell holds a controlling 55% stake in Sakhalin Energy, while Japan’s Mitsui and Mitsubishi own 25% and 20%, respectively.

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