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MosNews: Russia Launches Environmental Probe into Total’s Siberian Oil Field

EXTRACT: Months of pressure last year on another vast hydrocarbon project in the Far East, Sakhalin-2, regarded by experts as the Kremlin’s drive to regain control of the country’s mineral resources, culminated in the purchase by state-controlled energy giant Gazprom of 50 percent plus one share in the project from Shell and two Japanese companies involved.

THE ARTICLE

Created: 13.03.2007 12:28 MSK (GMT +3),

Russia’s environmental and technological watchdog has launched a routine probe into the Kharyaga oil field operated by France’s Total in northern Russia, the agency said on Tuesday, March 13.

The Federal Service for the Oversight of the Environment, Technology and Nuclear Management said it would look into the company’s compliance with technological and environmental requirements at the deposit, located in the Yamalo-Nenents Autonomous District, including its pipelines and production facilities.

A mineral resources regulator Rosnedra launched a separate probe into the licensing agreement for the project on Monday.

Late last year, the regulator initiated the talk of revoking license for Kharyaga development after discovering that the operator had failed to follow field development recommendations, including the gas drive recovery process, burning up 60 percent of the natural gas produced in 2005.

Also in April 2006, the Natural Resources Ministry accused Total of failing to meet its targets for Kharyaga under a 1995 production-sharing agreement (PSA), saying the investor had failed to increase production of crude and introduce new technologies and equipment for effective production since the agreement came into force in 1999.

Total owns a 50 percent stake in the project, alongside Norway’s Hydro (40 percent) and Russia’s Nenets Oil Company (10 percent).

This month will also see an inspection driven by alleged environmental violations begin at the Sakhalin-1 oil and gas project off Russia’s Pacific coast, operated under a PSA by U.S. oil giant ExxonMobil.

Months of pressure last year on another vast hydrocarbon project in the Far East, Sakhalin-2, regarded by experts as the Kremlin’s drive to regain control of the country’s mineral resources, culminated in the purchase by state-controlled energy giant Gazprom of 50 percent plus one share in the project from Shell and two Japanese companies involved.

In early February, authorities warned TNK-BP that it could be stripped of its license for the giant Kovykta natural gas deposit in East Siberia over failure to meet its obligations to supply nearby areas with gas and gave the company three months to rectify the situation.

Kovykta, with 1.9 trillion cubic meters of proven reserves, is highly important to the Russian government, which is pursuing an ambitious project to build a gas pipeline network to meet Asian nations’ energy needs and to diversify its export destinations

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