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Gazeta.ru: Authorities continue to pressure foreign investors

Next year, Sakhalin Energy, operator of the Sakhalin-II oil project, will face serious fines. Russian Natural Resources Minister Yuri Trutnev said the consortium, led by Shell (which is Sakhalin Energy’s key shareholder), “violated numerous environmental regulations in a barbarous way.”

Analysts, however, said that this is just an attempt to pressure the company into ceding a large stake in the project to Gazprom. Political experts believe that Sakhalin Energy has already accepted the fact that it will have to make concessions.

The exact amount of the fines may be determined by mid-2007, the minister said. “However, Moscow does not intend to review the production-sharing agreement under which foreign investors are developing Sakhalin-II,” he said.

This is an odd statement, experts told the paper.

“If the PSA is not reviewed, than it is unclear how Gazprom will join the project. After all, foreign investors were almost ready to give it a 30% stake,” said Natalia Yanakayeva, an analyst with CentreInvest Group.

“Apparently, 30% is not enough for Gazprom, and it wants to get more,” she said.

Yet no one will give the state-controlled gas monopoly a controlling stake, and it will most probably have content itself with a stake equal to the one held by Shell, she said.

The operator understands that it will have to concede, political experts told the paper.

“Sakhalin Energy has no other choice,” said Dmitry Oreshkin, a researcher at the Geographical Institute at the Russian Academy of Science. Environmental violations committed by the company are no greater than at any other large construction site in Russia, he said.

Pressure put on the project is an element of political PR, where environmental agencies are setting the tone, he said.

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