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UPI: Kremlin defends its environmental record

September 27, 2006

Moscow is registering irritation that its putative environmental concern over a massive foreign-owned oil project is seen as a veil for nationalization.

The government’s Natural Resources Ministry recently pulled an environmental permit of the Sakhalin-2 petroleum project, which is led by Royal Dutch Shell PLC. That move followed an unsuccessful effort by Kremlin-controlled OAO Gazprom to gain a 25-percent stake in the lucrative project.

Since then Western governments, primarily Japanese and European, have blasted Moscow and warned that such tactics sour Russia’s foreign investment climate.

In response, the deputy head of the Natural Resources Ministry’s inspectorate denied that President Vladimir Putin’s administration was deliberately fabricating environmental issues to pave the way for more nationalization, the Guardian said Wednesday.

There is nothing about business or political interests here. There are only ecological problems on Sakhalin, Oleg Mitvol said.

A day before Mitvol’s comments, ministry officials said their monthlong inquiry into Sakhalin-2 could result in Shell and its foreign partners having to spend hundreds of millions of dollars in improvements. Failure to make those improvements could result in legal problems, the ministry warned.

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