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RIA Novosti: Russia launches probe into ExxonMobil-led project in Far East

12:27 | 28/ 03/ 2007 

MOSCOW, March 28 (RIA Novosti) – Russia’s environmental watchdog launched a probe Wednesday into alleged environmental violations at the Sakhalin I hydrocarbon project off Russia’s Pacific Coast, which is run by U.S. giant ExxonMobil, a Rosprirodnadzor deputy head said.

Oleg Mitvol said the Federal Agency for the Oversight of Natural Resources would start with paperwork, which would take a month, and continue with inspections at the site in May.

“We will examine the documents and later, in May, we will start environmental probes,” Mitvol said.

The head of the Far Eastern geological institute’s branch in Sakhalin Island said earlier that some sections of the Sakhalin I pipeline in the north of the island were threatened by soil erosion.

“[The ground beneath] the pipeline has been eroded, [some of its sections are] hanging loosely, and soil erosion has triggered strong mud flows where they did not occur before,” Nikolai Kazakov said, also citing other experts who said the offshore section of the pipeline had also registered violations.

The checks at Sakhalin I were earlier planned for the fall of 2006, but were postponed over inquiries into another vast hydrocarbon project in the Far East, Sakhalin II, also developed under a production-sharing agreement (PSA) envisaging major tax benefits for the companies involved.

Months of pressure last year on Sakhalin II led by Shell, culminated in the purchase by Russia’s state-controlled energy giant Gazprom [RTS: GAZP] of 50% plus one share in the project.

France’s Total oil company is under a second probe into compliance with technological and environmental requirements of its operating license for the lucrative Kharyaga oil field in northern Russia. A regulator said the license could be revoked.

The Russian-British venture TNK-BP has also received a warning about its license for the giant Kovykta natural gas deposit in East Siberia over a failure to meet its obligations to supply nearby areas with gas.

Experts regard a series of checks into foreign oil and gas companies operating in Russia as the Kremlin’s drive to regain control of the country’s mineral resources.

Kazakov said the problems facing Sakhalin I – developed by the operator Exxon Neftegas Limited (30%), Russia’s state-controlled Rosneft [RTS: ROSN] (20%), India’s ONGC (20%) and Japan’s Sodeco (30%) – were largely similar to those at Sakhalin II, though the terrain where its infrastructure was built was simpler for engineering and geological work.

The watchdog said earlier it would issue its findings after the inspections of both projects in Sakhalin were completed.

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