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Russia cites environment in scotching Far East oil deal
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Special to World Tribune.com
RADIO FREE EUROPE/RADIO LIBERTY
Tuesday, September 19, 2006
The Russian government
announced on September 18 that it has withdrawn environmental
approval granted in 2003 for the Sakhalin-2 liquefied natural gas
(LNG) project, in which Royal Dutch Shell holds a 55 percent stake
with the rest divided between Japan's Mitsui and Mitsubishi, "The
Wall Street Journal" and the "International Herald Tribune" reported
on September 19.
An official of the Russian Federal Service for the
Oversight of Natural Resources (Rosprirodnadzor) said that the
project has already led to damage to salmon-bearing rivers and
"excessive logging" along the pipeline route.
Shell denies that it
has violated Russian environmental laws.
Russia is probably seeking
to renegotiate the $20 billion deal to its advantage rather than
block it altogether. Agreements with Shell and other Western oil
giants were concluded at a time when oil prices were low and Russia
sought foreign capital.
Now that Russia is awash in petrodollars, the
government is reportedly seeking to ease the foreigners out in favor
of domestic, state-run firms like Gazprom and Rosneft. London's
"Financial Times" wrote on May 25 that the Russian authorities are
considering revising some existing oil and gas deals with foreign
partners in order to further tighten Russian state control over
energy resources. Those projects include Sakhalin-1 and Sakhalin-2
(see "RFE/RL Newsline," May 26, August 4, and September 6, and 18,
2006).
Copyright © 2006 East West
Services, Inc.
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