THE SHELL LEAKS FILES: 30 AUGUST 2026
SLF-2007-042
The Sakhalin Papers XXXII: Parliament Rewrites the Rule — How a Sakhalin Financing Problem Entered Britain’s 2009 Export-Credit Law
The abandoned Sakhalin II judicial review had challenged ECGD’s power to “facilitate” exports when the goods and services concerned might already have been supplied. No court ever answered that question. Then Parliament changed the statute. The official record does not support saying that Sakhalin II alone caused the new law — but it establishes something considerably stronger than coincidence.
Archive reference: SLF-2007-042
Collection: The Sakhalin Papers
Principal records: Industry and Exports (Financial Support) Act 2009; Parliamentary debates of 16 March and 21 April 2009; House of Commons Environmental Audit Committee Eleventh Report, 20 October 2008; Government response published 5 March 2009; ECGD Annual Review and Resource Accounts 2009-10
Shell records: Royal Dutch Shell plc filings with the US Securities and Exchange Commission concerning Sakhalin II
Court record: Statement of Facts and Grounds in R (WWF-UK and The Corner House Research) v Secretary of State for Business, Enterprise and Regulatory Reform
Evidence standard: Parliamentary statements, legislation, Shell regulatory filings and official ECGD records are treated as documentary facts. Arguments advanced by WWF and The Corner House remain allegations or legal submissions unless independently established. No court ruled that ECGD’s 2004 Sakhalin commitment was unlawful, and the 2009 legislation is not characterised as an admission that it had been.
Introduction
Yesterday’s Shell Leaks File ended with three words from a British statute:
“with a view to facilitating.”
They had become surprisingly important.
Under the Export and Investment Guarantees Act 1991, Britain’s Export Credits Guarantee Department — ECGD — could provide guarantees and other assistance with a view to facilitating supplies by UK businesses to customers overseas.
WWF-UK and The Corner House seized upon those words in their 2007 Sakhalin II judicial review.
Their argument was straightforward in concept.
If British goods and services connected with Sakhalin II had already been supplied by the time ECGD finally decided whether to guarantee the financing, what exactly would the Government still be facilitating?
The Administrative Court never answered.
Sakhalin Energy withdrew its application for ECGD support on 29 February 2008, and the judicial review ended without a merits judgment.
Then something remarkable happened.
In 2009 Parliament removed the troublesome formulation.
The new statute allowed ECGD to support exports “in connection with” overseas supplies.
And Parliament expressly provided that those supplies could have taken place before the ECGD arrangements were made. (Legislation.gov.uk)
At first sight, it looks almost as though Parliament legislated away precisely the problem the Sakhalin claimants had identified.
The documentary trail allows us to go considerably further than resemblance.
But not quite as far as saying:
Sakhalin II caused the law to be changed.
The evidence is more nuanced — and more interesting.
1. The Problem Had Been Put Before the Administrative Court
The surviving Statement of Facts and Grounds in the WWF/Corner House judicial review quoted the statutory power under which ECGD operated.
The Secretary of State could make arrangements providing financial assistance:
“with a view to facilitating”
British supplies overseas.
The claimants argued that this wording imposed a real legal limitation.
Their pleading stated, in substance, that ECGD could not claim to facilitate something that had already occurred. It alleged that some Sakhalin preliminary contracts had already been entered into and that some of the relevant supplies were complete or nearly complete. (The Corner House)
This was not a judicial conclusion.
It was the claimants’ interpretation of the statute.
But it identified a practical problem that was undeniably real:
environmental due diligence could take years; major engineering contracts did not wait.
2. Shell’s Own Regulatory Filing Shows How Fast the Commercial Clock Was Running
The scale of that timing problem can be checked against authenticated Shell material.
A Royal Dutch Shell plc filing lodged with the US Securities and Exchange Commission records that by 21 December 2006 Sakhalin II Phase 2 was already more than 80 per cent complete, with approximately $12 billion invested by the end of the third quarter of that year.
The same filing recorded the agreement under which Gazprom would acquire 50 per cent plus one share of Sakhalin Energy, while Shell would retain 27.5 per cent. (SEC)
That was more than a year before Sakhalin Energy finally withdrew its ECGD application.
Thus the difficulty was not theoretical.
The project was being built while British officials were still considering whether environmental, social, financial and other conditions had been satisfied sufficiently for final export-credit support.
The physical project and the government decision-making process were operating on radically different timetables.
3. The Environmental Audit Committee Examined What Had Happened
After the Sakhalin application had been withdrawn, the House of Commons Environmental Audit Committee investigated ECGD’s approach to sustainable development.
Its Eleventh Report was published on 20 October 2008.
And there, unmistakably, was Sakhalin.
The Committee recorded WWF’s allegation that an application associated with the controversial Sakhalin development had received a legally binding conditional approval before full environmental assessments had been completed.
The Committee did not adopt every element of WWF’s allegation as a judicially established fact.
But it plainly considered the episode important enough to cite immediately before making this recommendation:
“No offer of support should be made, whether actual or provisional”
until ECGD’s Business Principles Unit had completed its assessment and its recommendations had been considered. (UK Parliament)
This is the first firm documentary bridge between Sakhalin and what happened to the law next.
Sakhalin was not merely lurking in the background.
It was expressly identified in the Parliamentary committee report immediately before the recommendation concerning the timing of conditional support.
4. The Committee Had Identified the Same Two-Clocks Problem
The National Audit Office evidence underlying the Committee’s inquiry explained why these cases could take so long.
For major projects with potentially high environmental impacts — explicitly including Sakhalin — provision and assessment of the necessary environmental information could take months or even years.
In Sakhalin’s case, updated impact assessments were not completed until late 2005, almost two years after the formal application.
The Business Principles Unit then had to assess compatibility with relevant environmental and social standards before the ECGD Risk Committee decided whether an application was acceptable for support. (UK Parliament)
That process was intended to protect environmental and social standards.
But it created the commercial dilemma.
If ECGD waited until all its due diligence was completed, the exporter might already have supplied the goods.
Under the wording of the 1991 Act, that raised a question:
How could ECGD subsequently say that its guarantee had facilitated an export that had already happened?
5. The Government Initially Rejected the Committee’s Recommendation
Here the documentary sequence becomes particularly interesting.
The Government’s formal response to the Environmental Audit Committee was received on 23 February 2009 and published on 5 March 2009. (UK Parliament)
On the recommendation that ECGD should make no actual or provisional offer until its Business Principles Unit had completed its assessment, the Government was unequivocal:
it did not accept the recommendation.
Its reason was practical.
Environmental assessment could take considerable time, while project sponsors’ tendering timetables could require exporters to bid before the assessment was complete.
The Government argued that exporters might not incur the cost of bidding unless ECGD could at least indicate the possibility of support.
Any such early assurance, it said, would necessarily remain conditional upon the project satisfying applicable environmental standards. (UK Parliament)
That response substantially describes the system that had produced the controversial 4 March 2004 Sakhalin letter.
Conditional indication now.
Environmental decision later.
6. Eleven Days Later, the Minister Presented a Legislative Solution
On 16 March 2009, the Industry and Exports (Financial Support) Bill received its Second Reading in the House of Commons.
Under-Secretary of State Ian Pearson explained Clause 2.
He quoted the old statutory wording.
Then he said plainly:
“there is a problem with the word ‘facilitating’.”
ECGD could not be said to have facilitated exports, he explained, if those exports had already been supplied. (Hansard)
The similarity to the legal issue raised in the abandoned Sakhalin judicial review is striking.
The WWF/Corner House pleading had argued that the Secretary of State could not facilitate supplies that had already occurred.
The minister now told Parliament that ECGD had a problem because it could not be said to facilitate exports that had already been supplied. (The Corner House)
There is, however, no evidence in the material examined for this instalment that Pearson copied the claimants’ argument or that Sakhalin was the sole origin of his statement.
That inference should not be made.
The importance lies elsewhere.
7. The Minister Himself Connected the Bill to the Environmental Audit Committee Recommendation
Pearson gave two main reasons for the statutory problem.
First, business practice had changed. Overseas buyers and project sponsors increasingly approached ECGD after procurement had already taken place, sometimes after supply had started.
Second, ECGD’s own decision-making had become more demanding because of expanded policies concerning corruption and environmental and social impacts.
The resulting due diligence could delay ECGD until after supply had commenced. (Hansard)
Then Pearson referred specifically to the Environmental Audit Committee recommendation:
no actual or provisional support should be offered until the Business Principles Unit had completed its assessment.
He explained that ECGD had previously tried to overcome the timing problem by making conditional offers before supply was completed, with the eventual guarantee dependent upon satisfaction of environmental requirements.
The Committee feared those early offers could weaken environmental scrutiny.
Pearson said he disagreed that they did — but said the Bill would allow ECGD to give effect to the Committee’s recommendation without weakening its Business Principles or due diligence. (Hansard)
This changes the evidential picture considerably.
8. The Documentary Chain Can Now Be Followed
The surviving records establish the following sequence.
In Sakhalin II, ECGD issued a binding conditional-support letter before its environmental assessment was complete.
WWF and The Corner House challenged that arrangement in judicial-review proceedings and questioned, among other matters, whether ECGD could still “facilitate” supplies once they had already occurred. (The Corner House)
The litigation ended without judgment.
The Environmental Audit Committee subsequently examined ECGD’s practices, expressly cited the Sakhalin conditional-approval controversy, and recommended that no actual or provisional offer should be given before Business Principles Unit assessment was complete. (UK Parliament)
The Government initially rejected that recommendation because of the commercial timing problem. (UK Parliament)
Then, during passage of legislation changing the meaning of ECGD’s statutory power, the responsible minister explicitly told Parliament that the new law would allow ECGD to implement the Committee’s recommendation while continuing to support exports even if supply had already occurred. (Hansard)
That is not conjecture.
That is the documented sequence.
9. But Was This the “Sakhalin Act”?
No.
That description would go beyond the evidence.
The Government’s official Explanatory Notes gave a broader commercial justification.
There was increasing demand for what it called reimbursement cover — ECGD backing for loans used to refinance UK exports already purchased.
Applications were also arriving at stages where goods or services might be supplied before ECGD could reach its decision, particularly where compliance with wider government policies had to be established.
The Government therefore considered it necessary for ECGD to be able to support an export whether or not the export had already taken place. (Legislation.gov.uk)
Changing project-finance practice was real.
So were applications unrelated to Sakhalin.
The legislation cannot responsibly be described as having a single-project purpose.
10. What Parliament Actually Changed
Clause 2 did something deceptively simple.
The old formulation authorised support:
“with a view to facilitating” exports.
The new formulation authorised arrangements:
“in connection with” exports.
Parliament then added an express provision allowing those arrangements to concern goods or services supplied before the arrangements were made, as well as supplies that were still to occur.
The provision was also capable of applying to supplies made before the new section came into force. (UK Parliament)
The linguistic change was small.
Its legal effect was substantial.
After commencement, ECGD no longer needed to fit every transaction within an argument that its intervention had helped cause a future export to occur.
There could now be a sufficient statutory connection even if the export had already taken place.
11. In One Respect, Parliament Removed the Exact Problem Raised by the Sakhalin Pleading
The abandoned judicial review had posed the question:
How can you facilitate something that has already happened?
The 2009 Act effectively removed the need to answer it for future cases.
ECGD could support an export in connection with supplies already made.
That does not mean Parliament retrospectively declared that ECGD’s March 2004 Sakhalin decision had been lawful.
Nor does it prove the claimants would have won their judicial review under the old wording.
No court ever decided that.
What Parliament did was alter the statutory architecture so that the same specific timing objection would no longer arise in the same form.
That distinction is crucial.
12. The Law Changed While Sakhalin II Was Already Exporting LNG
There is an extraordinary piece of chronology here.
While Parliament debated whether ECGD should have power to support exports after they had occurred, Sakhalin II itself entered the export phase.
Contemporaneous Oil & Gas Journal reporting recorded that Sakhalin II sent its first LNG cargo to Japan in March 2009. The cargo left the new Prigorodnoye facilities for Tokyo Bay. (Oil & Gas Journal)
Shell’s subsequent SEC-filed interim financial report independently confirmed that Sakhalin II, in which Shell then held 27.5 per cent, had begun LNG exports during the first half of 2009. (SEC)
Thus, while British legislators were fixing the statutory difficulty created when exports outran export-credit decision-making, the project that had provided Parliament’s Environmental Audit Committee with a concrete example was already loading LNG onto ships.
The ECGD application, of course, had already been withdrawn.
The new law did not finance Sakhalin II.
13. Environmental Groups Were Worried About the New Power
The change did not pass without scrutiny.
During the Commons proceedings on 21 April 2009, Liberal Democrat MP Lorely Burt moved an amendment requiring the Secretary of State to be satisfied that an adequate case-impact assessment had been completed before using the widened power.
She expressly thanked WWF, the Jubilee Debt Campaign and Transparency International for their assistance.
Her concern was that retrospective support might enable ECGD’s environmental, sustainable-development or anti-corruption safeguards to be circumvented. (Hansard)
Other MPs raised similar concerns.
The core question had changed slightly, but its origin was familiar:
if a major project was already physically proceeding, would officials really remain able to refuse financial support after adverse environmental findings emerged?
That was a policy concern, not a finding that ECGD would in fact lower its standards.
14. The Government Put Its Assurance on the Parliamentary Record
Pearson rejected that concern.
He told MPs that Clause 2 made no change to ECGD’s Business Principles.
The expanded statutory authority merely allowed ECGD to support British supplies that had already occurred by the time its assessments were completed.
Environmental, sustainable-development, bribery and corruption standards, he said, would continue to be applied. (Hansard)
The amendment was withdrawn after the minister placed those assurances on the record.
At Third Reading, Pearson again returned to the Environmental Audit Committee recommendation.
He said the new arrangement would allow environmental scrutiny to be completed before a final offer was made without regard to the timing of delivery of the export. (Hansard)
That sentence may be the clearest official description of what the legislation was designed to achieve.
The export could happen first.
The final ECGD decision could come later.
The word facilitating would no longer prevent it.
15. The Act Received Royal Assent on 21 May 2009
The Industry and Exports (Financial Support) Act 2009 became law on 21 May 2009.
The official Parliamentary record describes its second purpose as widening ECGD support to include exports that had already taken place. (UK Parliament Bills)
The change took effect immediately.
An unresolved legal problem that had existed under the 1991 wording had therefore been legislatively removed for subsequent ECGD transactions.
Again, this is not the same as a court deciding what the previous statute meant.
Parliament can change a law without deciding whether an earlier administrative decision complied with the old one.
16. ECGD’s Own Later Account Makes the Environmental Connection Explicit
ECGD’s 2009-10 Annual Review and Resource Accounts, laid before Parliament the following year, contains an unusually useful retrospective explanation.
It records the replacement of “with a view to facilitating” with “in connection with”, explaining that this clarified ECGD’s authority to support exports already partly or wholly supplied.
ECGD then identifies two elements of the context.
Major project sponsors increasingly sought finance after procuring goods and services.
And supplies had sometimes been made before ECGD could complete assessment of the project’s environmental, social and human-rights impacts.
The report stated that the amended power allowed support in such circumstances, while maintaining the requirement to meet relevant international environmental and social standards where applicable. (GOV.UK)
That is the Department’s own official explanation after enactment.
It strongly confirms that the tension between project timing and environmental due diligence was not an incidental side issue.
It was part of the reason the statutory language needed changing.
17. The Strange Government Reversal That Wasn’t Quite a Reversal
There remains an apparent contradiction worth examining carefully.
On 5 March 2009, the published Government response said it did not accept the Environmental Audit Committee recommendation barring provisional support before Business Principles Unit assessment was complete. (UK Parliament)
On 16 March, Pearson told Parliament that the Bill would allow ECGD to give effect to that recommendation. (Hansard)
Those statements look incompatible until the commercial problem is understood.
Under the old law, the Government argued that ECGD sometimes had to indicate conditional support early or risk reaching the end of environmental assessment after the export was already complete — at which point the statutory word facilitating created difficulties.
The new law removed that constraint.
Once ECGD could support already-completed exports, it no longer needed an early provisional offer merely to keep itself within the temporal logic of “facilitation.”
The legislation therefore allowed the Government to accommodate the Committee’s preferred sequencing without giving up the possibility of eventual export-credit support.
The policy environment had changed because Parliament was changing the legal framework around it.
18. Can We Now Say Sakhalin Caused the Change?
The evidence permits a carefully calibrated answer.
No — if “caused” means Sakhalin II was the sole reason Parliament legislated.
The Explanatory Notes and Parliamentary debates identify broader changes in international project finance, reimbursement-cover demand, later approaches by overseas project sponsors, competitiveness concerns and more extensive ECGD due diligence. (Legislation.gov.uk)
Yes — in the more limited sense that Sakhalin formed a documented part of the policy chain leading to the new framework.
The Environmental Audit Committee explicitly cited the Sakhalin conditional-support controversy immediately before recommending an end to actual or provisional offers prior to environmental assessment.
The minister then explicitly told Parliament that the legislation would enable ECGD to implement that recommendation.
That connection is contained in official Parliamentary records. (UK Parliament)
The defensible historical formulation is therefore:
Sakhalin II was a documented case study and catalyst within the debate that preceded the 2009 reform, but the surviving evidence does not establish that it was the sole or exclusive cause of the legislation.
That is considerably stronger than saying the resemblance was coincidental.
And considerably safer than inventing a single-cause explanation that the documents do not support.
19. Did Parliament “Legalise” What ECGD Had Done in 2004?
That would also be an overstatement.
The legality of the March 2004 conditional-support decision was never adjudicated.
The 2009 Act changed the statutory power prospectively and expressly allowed arrangements relating to goods or services already supplied.
But Sakhalin Energy had withdrawn its ECGD application more than a year earlier.
There was no surviving Sakhalin guarantee for the new legislation to rescue.
Nor does the Act contain a finding that ECGD had acted outside its powers in 2004.
The proper conclusion is narrower:
Parliament changed the statutory wording in a manner that removed for future transactions one of the principal timing questions raised by the Sakhalin litigation.
20. The Documentary Irony
The Sakhalin story produced an unusual sequence.
ECGD wanted time to perform environmental due diligence.
The project wanted to proceed.
British exporters wanted contracts.
A 1991 statute expected government support to facilitate exports.
A massive construction programme did not wait for Whitehall.
ECGD attempted to bridge the gap with conditional support.
Campaigners challenged that solution.
The challenge vanished before a judge could decide whether it was lawful.
A Parliamentary committee then cited Sakhalin and recommended that conditional offers should wait until environmental assessment was complete.
The Government objected that doing so would create serious commercial difficulties.
Then Parliament changed the law so that the goods could be exported first and ECGD could decide later.
The project that had helped expose the problem had meanwhile moved on without the British guarantee.
That is not a courtroom verdict.
It is something different:
a problem migrating from an unfinished judicial review into Parliamentary policy, and from Parliamentary policy into statute.
Documentary Findings
Established
The Export and Investment Guarantees Act 1991 originally empowered the Secretary of State to support overseas supplies “with a view to facilitating” them. (Hansard)
WWF-UK and The Corner House argued in their 2007 Sakhalin judicial-review grounds that ECGD could not lawfully facilitate supplies that had already occurred. The court never adjudicated that proposition. (The Corner House)
Royal Dutch Shell’s SEC-filed December 2006 material records that Sakhalin II Phase 2 was already more than 80 per cent complete, with approximately $12 billion invested, long before the ECGD process ended. (SEC)
The Environmental Audit Committee’s October 2008 report explicitly cited WWF’s allegation concerning the Sakhalin conditional approval before recommending that ECGD make no actual or provisional offer until its Business Principles Unit had completed its assessment. (UK Parliament)
The Government’s response, published 5 March 2009, initially rejected that recommendation on practical grounds relating to tendering timetables and the time required for environmental assessment. (UK Parliament)
On 16 March 2009, Ian Pearson told the House of Commons that the word “facilitating” was causing difficulty because ECGD could not be said to facilitate exports already supplied.
He also stated that the proposed legislation would allow ECGD to give effect to the Environmental Audit Committee recommendation without weakening its Business Principles or due diligence. (Hansard)
Parliament replaced the old wording with authority to make arrangements “in connection with” overseas supplies and expressly permitted support relating to goods or services supplied before those arrangements were made. (Legislation.gov.uk)
The Act received Royal Assent on 21 May 2009. (UK Parliament Bills)
ECGD subsequently stated in its official annual report that the legislative change addressed circumstances in which goods had been supplied before ECGD could complete environmental, social and human-rights assessment. (GOV.UK)
Established Connection to Sakhalin — But With Limits
Sakhalin was explicitly identified in the Environmental Audit Committee report that produced the recommendation later invoked by the minister when explaining the legislation.
That constitutes documentary evidence of a connection between the Sakhalin experience and the policy issue addressed by the 2009 reform. (UK Parliament)
The official record also identifies several broader commercial and administrative reasons for the statutory change.
It therefore does not establish Sakhalin II as the sole cause of the legislation. (Legislation.gov.uk)
Alleged — Never Adjudicated
WWF and The Corner House alleged that ECGD’s handling of the Sakhalin preliminary contracts unlawfully predetermined questions that should have been considered at final approval.
They argued that support could not “facilitate” supplies already completed.
They challenged the legality of making a binding conditional commitment before completion of environmental assessment.
Those were legal submissions.
The judicial review ended without a merits judgment.
Not Established
It is not established that a court found ECGD’s March 2004 Sakhalin commitment unlawful.
It is not established that Parliament passed the 2009 Act in order to correct an admitted illegality.
It is not established that the 2009 legislation was drafted solely because of Shell or Sakhalin II.
It is not established that the new law retrospectively validated the Sakhalin conditional-support letter.
It is not established that the 2009 Act weakened ECGD’s environmental or anti-corruption standards; ministers expressly told Parliament that it would not, although MPs and NGOs raised concerns about that possibility. (Hansard)
And the amended statute did not result in an ECGD guarantee for Sakhalin II.
That application had already been withdrawn.
Commentary
This is one of the more revealing files in the Sakhalin collection because the documentary story continues after the litigation stops.
If the archive ended with the abandoned 2007 judicial review, one could only say:
The claimants identified a statutory problem. ECGD disputed their case. Nobody knows how the court would have ruled.
That remains true.
But Parliament subsequently gives us another kind of evidence.
The precise word at the centre of the litigation — facilitating — was publicly identified by the responsible minister as a problem.
The precise timing issue raised by the litigation — exports occurring before ECGD could make its decision — became the subject of legislative amendment.
The Environmental Audit Committee expressly introduced Sakhalin into its examination of conditional support.
And the minister expressly linked the resulting legislation to the Committee’s recommendation.
This still does not manufacture the missing judgment.
It does something historically more useful.
It demonstrates that the difficulty exposed during the Sakhalin controversy was real enough to appear in Parliamentary scrutiny and sufficiently important that the statutory framework was subsequently altered so that ECGD would no longer face it in the same form.
The safest conclusion is therefore also the strongest one the evidence supports:
Sakhalin did not receive a court judgment on the “facilitation” issue. The law changed instead.
Source Record
The principal court record is the Statement of Facts and Grounds in R (WWF-UK and The Corner House Research) v Secretary of State for Business, Enterprise and Regulatory Reform. It identifies the March 2004 ECGD decision under challenge and records the claimants’ argument that assistance could not “facilitate” supplies already completed. It is a pleading and is not treated here as a judicial finding. (The Corner House)
The principal Parliamentary committee record is the House of Commons Environmental Audit Committee Eleventh Report, The Export Credits Guarantee Department and Sustainable Development, published 20 October 2008. It expressly records WWF’s Sakhalin allegation immediately before recommending that no actual or provisional offer of ECGD support be made until the Business Principles Unit assessment was complete. (UK Parliament)
The Government response, received on 23 February 2009 and published on 5 March, records the Government’s initial refusal to accept that recommendation and explains the commercial timing difficulties it believed would result. (UK Parliament)
The Hansard record of 16 March 2009 contains Ian Pearson’s explanation that the word “facilitating” had become problematic when exports had already been supplied and his statement that the Bill would enable ECGD to implement the Environmental Audit Committee recommendation without diluting due diligence. (Hansard)
The 21 April 2009 Commons proceedings record concerns raised with assistance from WWF, Transparency International and the Jubilee Debt Campaign, together with the Government’s repeated assurances that environmental, sustainable-development and anti-corruption standards would continue to apply. (Hansard)
The Industry and Exports (Financial Support) Act 2009 and its official Explanatory Notes document the replacement of “with a view to facilitating” by “in connection with” and the express extension of ECGD powers to exports already supplied. (Legislation.gov.uk)
The subsequent ECGD Annual Review and Resource Accounts 2009-10 confirms the Department’s own understanding that the amendment addressed both changing project-finance practices and situations in which exports occurred before environmental, social and human-rights assessments could be completed. (GOV.UK)
The authenticated Shell record includes Royal Dutch Shell plc filings with the US Securities and Exchange Commission. These establish that Sakhalin II was more than 80 per cent complete by late 2006 and that, with Shell holding 27.5 per cent after Gazprom’s entry, the project commenced LNG exports during 2009. (SEC)
Contemporaneous industry reporting independently recorded the first Sakhalin II LNG shipment to Japan in March 2009. (Oil & Gas Journal)
Archive disclaimer: The 2009 statutory amendment is not evidence that the abandoned Sakhalin judicial review would have succeeded. No court ruled on the legality of the March 2004 conditional commitment. The documentary evidence establishes that Sakhalin featured expressly in the Parliamentary committee process preceding the reform and that the legislation addressed the same general timing problem, while official records also identify broader commercial reasons for the amendment.
Site wide disclaimer also applies.
Next Archive File
SLF-2007-043 — The Sakhalin Papers XXXIII: The $5.3 Billion Alternative — When Britain’s Guarantee Disappeared and Japan Stepped In
On 29 February 2008, Sakhalin Energy withdrew its applications to Britain’s ECGD and the US Export-Import Bank.
Four months later, the financing story took a dramatic turn.
On 16 June 2008, the Japan Bank for International Cooperation announced project financing of up to $3.7 billion for Sakhalin II.
A syndicate of commercial banks would provide another $1.6 billion.
Total financing:
$5.3 billion. (JBIC)
The British guarantee that had generated years of environmental scrutiny, Parliamentary questions, Freedom of Information litigation and an unfinished judicial review was no longer required.
Yet financing for the project arrived anyway.
Why did JBIC proceed?
What environmental and social conditions accompanied the money?
Which commercial banks joined it?
What role did Japan’s enormous dependence upon imported energy play?
And what does the financing agreement tell us about the practical effect — or limitations — of the long campaign to prevent public financial institutions from supporting Sakhalin II?
SLF-2007-043 will follow the money.
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