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Sakhalin Whales Panel Faults Gas Venture

Sakhalin Whales Panel Faults Gas Venture

By: iStockAnalyst   Friday, June 13, 2008 7:15 PM

LONDON -(Dow Jones)- A scientific panel report released Friday revealed ongoing concerns that the Sakhalin-II oil and gas joint venture hasn’t complied with all of recommendations on the protection of the endangered Western Gray Whale.

The news could complicate financing for the joint venture managing the Russian Far East project, Sakhalin Energy Investment Co., or SEIC, which is controlled by OAO Gazprom (GAZP.RS) with Royal Dutch Shell PLC (NYSE:RDSB) (RDSB.LN) as the second largest shareholder. Sakhalin Energy is close to finalize loans of over $5 billion led by the Japan Bank for International Cooperation.

The Western Gray Whale Advisory Panel was commissioned in 2004 by Shell to provide advise on measures to protect the rare whale specie.

But in its latest report published on its Web site, the panel expressed concerns that SEIC doesn’t intend to adhere to its recommendation for slower speeds for vessels that could potentially strike whales. It also says the joint venture continues to delay the deployment of noise-monitoring equipment and criticizes its adequacy.

The report also says that some of the oil-spill response plans haven’t even been approved by the Russian government.

These criticisms are “important because the banks have said that compliance with all of the (panel’s) reasonable recommendations is a condition of financing, and SEIC committed to doing so in its Health, Safety, Environment & Social Action Plan,” Doug Norden, a policy director environmental group Pacific Environment, pointed out.

-By Benoit Faucon, Dow Jones Newswires; +44 207 842 9266; [email protected]

    (END) Dow Jones Newswires   06-13-08 1915   Copyright (c) 2008 Dow Jones & Company, Inc.

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