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Dow Jones Newswires: Russian Offcl: Sakhalin-2 Permit May be Pulled This Week

Saturday September 16th, 2006 / 21h36 
 
MOSCOW -(Dow Jones)- A key environmental permit for a $20 billion oil and gas project led by Royal Dutch Shell PLC (RDSA.LN) may be canceled as early as this week, a Russian official said Saturday after the General Prosecutor’s Office issued a statement calling the document at odds with Russian law.

Withdrawing the permit would halt work on Phase-2 of the project, the developer, 55%-Shell-owned Sakhalin Energy Ltd., has previously said. Phase-2 is a multibillion dollar integrated oil and gas development under which Sakhalin Energy plans to start producing liquefied natural gas, or LNG, by summer 2008.

“I think that the Ministry of Natural Resources will cancel the permit,” said Oleg Mitvol, deputy head of the Russian state environmental watchdog, Rosprirodnadzor, which has led the charge to shut down Sakhalin Energy’s operations over environmental complaints. “We have a very strong position.”

Sakhalin Energy couldn’t be reached for comment. A spokesperson for Shell in London said she couldn’t comment immediately, while Japan’s Mitsui & Co. (8031.TO) and Mitsubishi Corp. (8058.TO), which are also shareholders in Sakhalin Energy, weren’t immediately available for comment. 

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