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BBC Monitoring Service: Russian official puts cost of Sakahlin-2 environmental damage at 50bn dollars

Published: Oct 16, 2006

Excerpt from report by Russian news agency ITAR-TASS

Moscow, 16 October: The cost of making good the environmental damage caused by the operator of the Sakhalin-2 project will be astronomical, between 10bn and 50bn dollars. This estimate was given in a conversation with an ITAR-TASS correspondent by deputy head of Rosprirodnadzor [Russia’s Federal Service for the Regulation of the Use of Natural Resources] Oleg Mitvol, who this month headed an inspection carried out the agency at the facilities of the project’s operator, the Sakhalin Energy company.

“This sum is determined by the high cost of land reclamation and the cleaning of the sea bed in the Aniva bay,” he explained. [Passage omitted.]

So far, the Sakhalin Energy company “has not proposed any engineering solutions for eliminating the environmental violations,” he complained. “So far, the project’s operator has continued its activities mainly in the political field,” Mitvol believes. [Passage omitted.]

The final damage figure can not be calculated until the end of next summer, Mitvol said.

Meanwhile, it was announced on Friday [13 October] that Russian Natural Resources Minister Yuriy Trutnev would personally visit Sakhalin on 24-26 October to learn about the results of the of the checks into the observance of the environmental protection legislation at the two oil and gas deposits of the Sakhalin-2 project. [Passage omitted.]

[In an earlier report, at 0900 gmt, ITAR-TASS quoted Trutnev as saying the executive director of Shell had shown him that some of the violations had already been eliminated. Trutnev said, however, that it was impossible to eliminate some violations, such as illegal felling of trees. He said sanctions may be imposed on Sakhalin energy, “though it is too early to speak of their scope”. ITAR-TASS recalled that Shell has a 55-per cent stake in Sakhalin Energy, while Japanese companies Mitsui and Mitsubishi had 25 and 20 per cent respectively.

In a later report, at 1515 gmt, ITAR-TASS quoted Mitvol as saying the checks of the Sakhalin-2 project would continue after the official end of the inspection on 25 October.

A report by RIA-Novosti news agency, at 1409 gmt, quoted Mitvol accusing Sakhalin Energy of “political blackmail”.]

Source: ITAR-TASS news agency, Moscow, in Russian 1006 gmt 16 Oct 06

BBC Monitoring

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