Royal Dutch Shell is facing the prospect of multi-billion lawsuits from the Russian government seeking compensation for supposed environmental damage, it emerged yesterday, writes Andrew Johnson.
Oleg Mitvol, the deputy head of Russia’s environmental agency Rosprirodnadzor, said it was considering action after describing Shell’s plans to rectify damage at Sakhalin-2 as “not serious”. He said “We had expected to see technical solutions and they are dealing with small local problems.” The government could scrap the project.
The Russians have claimed Sakhalin-2, based on a Pacific island, has caused environmental damage that could cost $50 billion (£26 billion) to put right. They said the project had led to a bay being polluted and too many trees had been cut down.
The Russian government is furious that costs at Sakhalin have more than doubled to $20billion. It is also thought to be piling on pressure to persuade Shell to sell some of its Sakhalin-2 stake to Russian group Gazprom at a favourable rate.
Shell declined to comment on Mitvol’s remarks.
11/11/2006
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