December 12, 2006; Page A18
The authoritarian drift of Russia continues apace. Yesterday the Kremlin managed to pull the rug out from under the largest foreign investment in the country, Royal Dutch Shell’s $20 billion oil and gas project off the Pacific island of Sakhalin. You might call it the economic version of Polonium 210.
Connoisseurs of Russian black humor can appreciate the methods used to wrest control of the Sakhalin-2 project from the Dutch-British energy giant. In recent months, local authorities went after the company for “unauthorized tree felling” and other environmental and labor violations — finding about 100 in all. Last week, the Natural Resources Ministry threatened to pull permits needed to proceed with the exploration work over allegedly misused water permits. This is the same Russia whose environmental record includes Chernobyl and the dry Aral Sea, among other offenses.
It is a measure of the West’s fatalism about Russia that the Kremlin-engineered campaign to force Shell to hand Sakhalin to state-owned Gazprom came as no surprise. KGB man Vladimir Putin has been anything but subtle in his mission to put natural resources in the hands of his cronies.
Last year, the country’s top private oil concern, Yukos, was forcibly handed to state-run Rosneft, and Yukos’s boss, Mikhail Khodorkovsky, was exiled to Siberia. Foreign companies are barred from taking majority stakes in oil, gas or mineral exploration projects or from challenging Gazprom’s monopoly on gas exports. To get around the roadblocks put in its way, Shell yesterday offered to cede majority control of Sakhalin to Gazprom, retaining a minority stake. Watch for its “environmental” problems to be quickly resolved. Other existing exploration deals with BP, ExxonMobil and Total are also in the Kremlin sights.
Mr. Putin finds no shortage of defenders. After all, goes the refrain, Venezuela, Saudi Arabia, Mexico and other developing countries keep their oil and gas resources tightly held in state hands, too. Vladimir Putin’s Russia certainly belongs in that company. So, please remind us, what’s the country doing in the G-8 club of the world’s leading industrialized democracies?
This website and sisters royaldutchshellgroup.com, shellnazihistory.com, royaldutchshell.website, johndonovan.website, and shellnews.net, are owned by John Donovan. There is also a Wikipedia segment.
EBOOK TITLE: “SIR HENRI DETERDING AND THE NAZI HISTORY OF ROYAL DUTCH SHELL” – AVAILABLE ON AMAZON
EBOOK TITLE: “JOHN DONOVAN, SHELL’S NIGHTMARE: MY EPIC FEUD WITH THE UNSCRUPULOUS OIL GIANT ROYAL DUTCH SHELL” – AVAILABLE ON AMAZON.
EBOOK TITLE: “TOXIC FACTS ABOUT SHELL REMOVED FROM WIKIPEDIA: HOW SHELL BECAME THE MOST HATED BRAND IN THE WORLD” – AVAILABLE ON AMAZON.
