MOSCOW, Nov 13 (Reuters) – Russian state oil firm Zarubezhneft has audited the cost estimate of the Royal Dutch Shell-led
The Russian government has disputed the Shell figures since the Dutch-British firm doubled its estimate for the second phase of the project from $10 billion to $20 billion.
That would put the total cost of the venture, which involves building the world’s biggest liquefied natural gas plant on the Pacific island of Sakhalin, at $22 billion.
The cost increase would directly hit the Russian state because the structure of the contract — a production sharing agreement (PSA) — allows Shell and its minority partners, Japan’s Mitsui (8031.T: Quote, Profile, Research) and Mitsubishi (8058.T: Quote, Profile, Research), to recoup their own costs before sharing any profit with the government.
Russian officials have put pressure on Shell over the jump in costs, probing its environmental and technical compliance and threatening to sue the project for billions of dollars or even scrap the PSA altogether.
Vedomosti quoted two sources close to Zarubezhneft as saying the audit, which was commissioned by the Energy Ministry, was completed in July. The biggest cost overrun it identified was an $800 million overspend on contractor costs.
Contractors on the project include Russian firm Starstroi and Italy’s Saipem (SPMI.MI: Quote, Profile, Research).
Zarubezhneft, the Kremlin’s foreign oil company, sprang to prominence last year when it was named as the worst offender in a United Nations report into sanctions-busting payments to the former Iraqi regime of Saddam Hussein.
A spokesman for Sakhalin Energy, the company operating Sakhalin-2, was not immediately available for comment.
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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.
