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MosNews: Russia Warns Exxon’s Sakhalin-1 Project of New Checks by Month-End

Created: 02.03.2007 07:22 MSK (GMT +3), Updated: 07:22 MSK

Russia plans to start new checks on the Exxon Mobil-led Sakhalin-1 oil and gas project at the end of March, the country’s environmental watchdog official said on Thursday, March 1.

Oleg Mitvol, deputy head of the Russian environmental agency RosPrirodNadzor, said the examination of the scheme on the Pacific island of Sakhalin would focus on how Exxon and its partners fulfill their environmental obligations.

“We plan to start the first part of the checks —- the paperwork —- on March 28. About a month after that, probably in May, the second part —- the checks on the ground —- is to begin,” Mitvol said, quoted by Reuters.

Previous inspections, conducted last year by Russia’s technical standards agency, RosTekhNadzor, delayed full scale exports from the project by several months after it said Exxon needed to do more work at its Pacific export terminal.

Mitvol also led inspections of Royal Dutch/Shell’s neighboring Sakhalin-2 oil and gas scheme last year, and analysts said his actions helped persuade the group to sell a controlling stake to Gazprom for $7.45 billion.

The pressure quickly subsided after the sale.

Gazprom’s Sakhalin-2 deal was one of the latest examples of the Kremlin’s desire to regain control over all big projects in top industries.

But analysts say a similar outcome is unlikely at Sakhalin-1, where the project also includes powerful state-controlled Russian company Rosneft as a partner.

Exxon’s Sakhalin and BP’s venture TNK-BP remain the last large foreign-led energy projects in Russia.

Mitvol also said his agency would start another inspection of French company Total’s Kharyaga oil project in Russia’s Arctic on March 12.

“Previous checks, conducted last year, discovered some problems in fulfilling the licensing agreement, so we will check whether they have been settled,” he said.

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