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The Ottawa Citizen: Endangered whales find an unlikely friend in Russia’s Putin

President Putin

Russian President Vladimir Putin, shown at an Orthodox Christmas service yesterday, has invoked the fragile habitat of the grey whale in a dispute with Royal Dutch Shell over oil. (Photograph by Reuters)

A shrewd battle for control of oil in the Pacific could be all the grey whale needs to survive, writes Mike Blanchfield. Published: Monday, January 08, 2007

With tens of billions of petrodollars floating in limbo, there are no runaway winners in the long and nasty battle over who will ultimately control the lucrative oil and gas deposits around Russia’s remote Sakhalin Island.

Unless you count the approximately 100 grey whales — the last on Earth — swimming idly off its shores in the frigid waters of the northern Pacific Ocean.

The whales are the last of a seriously endangered species, but they have found an unlikely but formidable ally in their life-and-death struggle to avoid extinction: Russia’s inscrutable President Vladimir Putin.

“I don’t think anybody’s accused Mr. Putin of being a raging environmentalist,” said Francis Grant-Suttie, director of private-sector relations at the World Wildlife Fund (WWF) in Washington.

“At the same time, he watched his government take a very active, hands-on role with how energy in Russia is being managed.”

Mr. Putin has become the unlikely saviour of grey whales — whether he cares for them or not — because of a bitter legal dispute that has raged for several months between the Kremlin and an international consortium led by Royal Dutch Shell.

At stake is control of the $20-billion Sakhalin-2 oil and gas project, the largest foreign investment venture in Russia’s booming energy sector.

Russia wanted to renegotiate its profit-sharing agreement with Shell because overruns have doubled the cost of the project from an original $10 billion. That has serious implications for the Kremlin because, under its original deal with Shell, it won’t see a penny until investors recover their costs .

Russia first signed the agreement back in 1994, when it was poorer and weaker after the collapse of the Soviet Union. But as far as Shell and its two Japanese partners are concerned, a deal is a deal.

Mr. Putin, the former KGB spy-turned-politician who has never been sold short on his ability for tactical thinking, played the environmental card: Russia essentially froze the project by saying the company had violated several of its environmental laws.

Russia concluded that Sakhalin-2, among other things, was damaging grey whale feeding grounds off the island and that pipelines would pass through ecologically sensitive areas.

Shell and many analysts cried foul, accusing the Kremlin of masquerading as environmentalists in the name of a cash grab.

After all, this came after Russia cut gas supplies to Ukraine, sparking widespread international allegations that the Kremlin was wielding energy as a political weapon. Analysts say this is all part of a scheme to ensure Russia’s state-owned energy firm, Gazprom, can gain a controlling interest in Sakhalin-2.

By mid-December, reports emerged that Gazprom had finally managed to secure a majority stake in Sakhalin-2.

But to environmentalists, much of this is beside the point.

As Igor Chestin, the head of the WWF’s Russian branch, told Britain’s Guardian newspaper recently: “We are prepared to be prostitutes with anyone if the end result is protection of the environment.”

© The Ottawa Citizen 2007

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