29 September 2006
Expert comments on the Sakhalin II situation by a Shell Insider…
This website and sisters royaldutchshellplc.com, shellnazihistory.com, royaldutchshell.website, johndonovan.website, and shellnews.net, are owned by John Donovan. There is also a Wikipedia segment.The costs of Sakhalin have doubled, so the payback time is approximately doubled. If 2013 is the new estimate for breakeven, based on a start up in 2008 and $22bn costs, then it is fair to assume that the date should have been 2009, based on $10bn costs and start-up in 2007 – as per the PSA.
(1) Apart from the $12bn in extra costs to be paid by the Russians (how much of this is Shell “overhead”?) an NPV calculation shows that the value of the future income stream due to the four year delay, and assuming a discount rate of 12% (typical for upstream E&P projects) is reduced by 60%.
(2) Shell calculates the costs of delaying the project by one year as $10bn. The $10bn includes $5bn as the notional cost of delaying the income stream by one year. However, the cost overrun and the delay in start-up means that the Russians are being asked to wait an extra four years for their income already, which by Shell’s own calculations is going to represent a cost of $20bn ($5bn x 4 years).
Whether Shell’s figures (2), or the NPV calculation (1) is used, the true additional cost to the Russians of the extra $12bn in costs and a one year delay (to 2008) of first exports is going to be over $30bn
The $2bn annual cost (quoted by Shell) of buying LNG elsewhere to fulfil the Sakhalin contract in case of a delay implies that the price to be paid by the Japanese for Sakhalin gas is too low: if Sakhalin gas was being sold at a market price, it would be possible to replace the gas on the world market at approximately the same price for which it was being sold.
It is hardly surprising that the Russians are questioning the viability of the project.
Royal Dutch Shell conspired directly with Hitler, financed the Nazi Party, was anti-Semitic and sold out its own Dutch Jewish employees to the Nazis. Shell had a close relationship with the Nazis during and after the reign of Sir Henri Deterding, an ardent Nazi, and the founder and decades long leader of the Royal Dutch Shell Group. His burial ceremony, which had all the trappings of a state funeral, was held at his private estate in Mecklenburg, Germany. The spectacle (photographs below) included a funeral procession led by a horse drawn funeral hearse with senior Nazis officials and senior Royal Dutch Shell directors in attendance, Nazi salutes at the graveside, swastika banners on display and wreaths and personal tributes from Adolf Hitler and Reichsmarschall, Hermann Goring. Deterding was an honored associate and supporter of Hitler and a personal friend of Goring.
Deterding was the guest of Hitler during a four day summit meeting at Berchtesgaden. Sir Henri and Hitler both had ambitions on Russian oil fields. Only an honored personal guest would be rewarded with a private four day meeting at Hitler’s mountain top retreat.
IN JULY 2007, MR BILL CAMPBELL (ABOVE, A RETIRED GROUP AUDITOR OF SHELL INTERNATIONAL SENT AN EMAIL TO EVERY UK MP AND MEMBER OF THE HOUSE OF LORDS: 
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A head-cut image of Alfred Donovan (now deceased) appears courtesy of The Wall Street Journal.
