Royal Dutch Shell Plc  .com Rotating Header Image

Daily Telegraph: Russians turn up heat on Exxon, Hambro

By Russell Hotten
Last Updated: 1:33am GMT 13/12/2006

The Russian agency pursuing Royal Dutch Shell over its Sakhalin-2 project has turned up the heat on Exxon Mobil and Peter Hambro Mining in what could be further assaults on foreign investors.

RPN, the state-run environmental watchdog, said it was starting fresh checks on Exxon’s Sakhalin-1 oil development and on all 54 operating licences affiliated to Hambro, Russia’s third largest gold producer.

Hambro shares crashed 154 to 822p yesterday amid fears it could be a repeat of the Sakhalin-2 affair. Shell looks set to relinquish control of Sakhalin-2 after Moscow claimed the company violated environmental conditions.

The move alarmed investors and Western governments which believe the allegations have more to do with attempts to regain assets sold in the 1990s. Hambro said it welcomed the chance for discussions with RPN. “It gives us a chance to go through in detail what their concerns are,” the company said.

Yesterday, the Kremlin risked a clash with Washington when RPN’s deputy head, Oleg Mitvol, said he had begun checks on Sakhalin-1, in which Exxon owns 30pc.

On Monday, Moscow said Shell made proposals to resolve the Sakhalin-2 dispute, thought to involve Shell giving majority control to state-run Gazprom for up to $4bn cash and other assets.

Shell owns 55pc of the Sakhalin Energy joint venture. Some analysts believe Shell’s loss on the project could be as high as $6bn (£3.1bn) and seriously dent its reserves base.

However, without knowing the terms of any settlement and any future investment required by Shell, investors will not be able to assess the impact. “It’s all down to politics. It’s beyond the fundamentals of the project,” said Peter Hitchens, analyst at Teather & Greenwood.

After declining to comment on Monday, Shell yesterday said worldwide reports it had given up control of Sakhalin were premature. “There’s been a lot of reporting that we’ve thrown in the white flag. The negotiations have not been concluded,” said spokesman Alf D’Souza.

RPN continued its attack on Shell’s environmental record yesterday, when Mr Mitvol said he may bring $30bn in damages claims against Shell to the international arbitration court in Stockholm. “We will be ready to take legal action from March,” he said.

A Shell spokesman said: “Sakhalin Energy is yet to receive any findings from the RPN environmental audit. The company has reiterated its willingness to respond to any issues raised by RPN.”

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2006/12/13/cnoil13.xml

royaldutchshellplc.com and its sister websites royaldutchshellgroup.com, shellenergy.website, shellnazihistory.com, royaldutchshell.website, johndonovan.website, shellnews.net and shell2004.com are all owned by John Donovan. There is also a Wikipedia article.

0 Comments on “Daily Telegraph: Russians turn up heat on Exxon, Hambro”

Leave a Comment

%d bloggers like this: