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UpstreamOnline: Russian watchdog targets Eni

By Upstream staff

Russia’s environmental agency said today it is set to start investigating a unit of Italian energy player Eni which has contracted to work on Shell’s Sakhalin 2 development.

The move came a day after Eni chief Paolo Scaroni said rising pressure on Western energy companies in Russia had delayed an asset swap deal between Eni and Russia’s gas monopoly Gazprom.

Today Scaroni backtracked, saying talks were going well and were on track.

The environmental agency Rosprirodnadzor said in a statement it had submitted documents about illegal deforestation by the contractor to prosecutors.

It has previously threatened to open multiple probes against many contractors, without giving their names.

Today it specifically underlined that one of the contractors was Starstroi, which it said was a subsidiary of Eni. Starstroi is in fact a subsidiary of oilfield services company Saipem, which is controlled by Eni.

The Sakahalin 2 project includes construction of the world’s largest gas liquefaction plant to supply Japan and the US.

Rosprirodnadzor has threatened to halt the project and withdraw its environmental permits, although the Shell-led group says it is still on track to ship the first liquefied natural gas in 2008.

Many analysts have interpreted the rising pressure as a Kremlin strategy to squeeze foreigners out of the strategic energy sector or force them to cede bigger stakes to national companies on better terms.

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