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London Evening Standard: Shell shaken by Sakhalin dictat

Robert Miller, Evening Standard
3 August 2006

SHARES in Royal Dutch Shell slipped 20p to 1952p today on reports that the oil giant has been ordered to suspend construction of a pipeline on Russia’s Sakhalin Island off the eastern coast of Siberia. 

Oleg Mitvol, deputy head of the ecological unit at Russia’s Resources Ministry, asked for the suspension because of concerns over safety and the environment.

Shell, in partnership on the £10.7bn Sakhalin 11 project with Japanese liquefied natural gas shippers Mitsui and Mitsubishi, hopes to tap into 17 trillion cubic feet of gas and 1.2 billion barrels of oil.

Last year the costs for the second phase of the Sakhalin project, the biggest foreign investment in Russia, doubled after environmental groups forced Shell to redesign on- and offshore-pipelines to protect whale migrations and salmon runs.

In The Hague last November, President Vladimir Putin was said to have criticised the cost escalation to Shell boss Jeroen Van der Veer, pictured.

Mitvol, who is also concerned that the Sakhalin pipeline runs through areas at risk from landslides ‘at any time’, said: ‘We are waiting for the end of August. We need to get some more documents and, after that, we prepare a lawsuit for the arbitration court in Sakhalin demanding to suspend construction.’

A Shell spokesman said: ‘The company has not received neither official notification from RosPrirodNadzor nor the mentioned report of the Far Eastern Academy of Science regarding the violations and hazards. Therefore the company cannot give any comments on the RosPrirodNadzor statement.’ and its sister non-profit websites,,,,,, and are owned by John Donovan. There is also a Wikipedia feature.

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