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The Guardian: Fears over Sakhalin-2 revealed in Shell emails

Terry Macalister
Monday November 6, 2006

Shell was warned more than four years ago by one of its own senior officials that he had major reservations about safety issues inside the troubled Sakhalin-2 development in eastern Russia.

Internal Shell emails sent to the then technical director of the Shell-led Sakhalin Energy company raise fears about the size of wells, drilling in an earthquake area, and an unforgiving schedule.

One of the messages from Hans Bouman, asset manager for the NAM company, jointly owned by Shell and Esso, questions whether one division of Shell turned down the opportunity to develop Sakhalin because of its own concerns.

The emails have surfaced as Shell comes under attack from the Kremlin over costs soaring to £12bn and allegations of environmental damage caused by the liquefied natural gas scheme.

The correspondence between Mr Bouman and the then technical director of Sakhalin, Engel van Spronsen, follows a visit by Sakhalin Energy officials to see how NAM operated the Groningen field.

“When they talked (with great enthusiasm!) about the well completions and other problems (earthquake area, young faults that have gas plumes, half a year no access to platform etc) and I saw the completion design, I started to worry,” writes Mr Bouman.

“Engel, several of us had the same feeling: this is not going too well. On some general questions why not this or that (e.g. sub sea templates like in Troll or Draugen) we heard: yes you are right but we are now schedule-driven,” he adds.

The NAM executive then goes on to say that he has received emails from another member of the Sakhalin team who was also alleged to be apprehensive.

“I heard from Teun van Waart that many moons ago EP [Shell exploration and development] declined to do something on this field because the risks were too high and that G&P [Shell gas and power] had signed a contract anyhow,” he adds. Mr Bouman goes on to admit that all this was “probably hearsay and no science or hard facts but still: I get this sinking feeling. I would NEVER EVER want to be schedule driven … on a $9bn project. That is asking for problems.”

A source close to Sakhalin Energy dismissed the gravity of the revelations, saying these were personal remarks made years ago about issues that had later been dealt with. “The author of the emails indicated himself, the issues raised in the emails were based on ‘… probably hearsay and no science or hard facts …’ This email exchange took place in 2002 and it highlighted some uncertainty in available studies at the time,” the source said.

“Without wishing to comment on the particular issues raised by the author, we would like to state that since 2002 extensive further work has been undertaken to understand more thoroughly the geology and expected performance,” said the source.

“The well engineering programme was revised to reflect the outcome of the studies and changes made to the design of the wells. These changes have been incorporated into the revised cost and budget and schedule that was announced in July 2005,” he added.,,1940522,00.html 

The Hans Bouman, Engel van Spronsen Sakhalin emails and its sister websites,,,,, and are all owned by John Donovan. There is also a Wikipedia article.

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