Posts Tagged ‘Sakhalin 2’

At one point the largest foreign investor in Russia, Shell declined to comment on whether its business would be affected after the downing of the plane. The company lost four employees in the incident, it said yesterday.

BloombergBusinessweek article by Celeste Perri, Maud van Gaal and Fred Pals published 22 July 2014

For centuries, the fortunes of the Netherlands, the wind-swept country carved out of North Sea wetlands, have relied on preserving the peace with its global trading partners. Last week’s downing of an airliner carrying 193 Dutch nationals is testing one of its most important relationships, involving companies from Royal Dutch Shell Plc (RDSA) to Heineken NV. (HEIA)

The Netherlands was Russia’s third-biggest trading partner last year, data compiled by Bloomberg show. The Dutch, home to the busiest container port in Europe and the region’s biggest energy company, send dairy products, meat and machinery to Russia, which the U.S. says is complicit in the attack. read more

Extracts from a Motley Fool article by Arjun Sreekumar published 17 May 2014

Shell clearly has significant exposure to Russia. The worst-case scenario for the company, as well as for BP and other companies operating in the nation, would be if the U.S. and European Union sanctioned Russia’s energy sector. Such economic penalties would make it problematic for Shell to maintain relations with Gazprom… As I understand it, such a sanction, if imposed, would not impact Shell’s existing projects. However, it would affect new projects and expansion plans, including perhaps the proposed expansion of Sakhalin-2. It could also hamper Shell’s 50/50 joint venture with Gazprom in western Siberia’s Salym fields…  I remain cautious about Shell’s exposure to Russia. read more

Extract from an article by Nick Webb published Sunday 02 March 2014 by Independent.ie

THE controversial Corrib gas field is expected to come onstream by “mid 2015.” Gas was originally expected to flow from the Mayo field back in 2003. The project is now likely to be 12 years behind the original schedule. The cost of developing the field could be four times the initial estimate of €800m at over €3bn.

FULL ARTICLE

ADDED BY JOHN DONOVAN: “The Bad News” slide appeared in a 62 page Royal Dutch Shell internal PowerPoint presentation prepared in June 2000: “Excom Early Look Business Plan 2000″. Turned out to be chillingly accurate in relation to many Shell projects, including Sakhalin2 and the Alaska debacle. read more

As the detention of Greenpeace’s ‘Arctic 30’ by Russian security services approaches its second month, a shift of campaign tactics is taking place. Now Shell, Gazprom’s partner in developing oil and gas on the Arctic Shelf, is in the firing line.

The Ecologist: 13th November 2013

As the detention of Greenpeace’s ‘Arctic 30’ by Russian security services approaches its second month, a shift of campaign tactics is taking place. Now Shell, Gazprom’s partner in developing oil and gas on the Arctic Shelf, is in the firing line.

Greenpeace is targetting Shell in a new round of protests aimed at securing the release of the Arctic 30 protestors arrested on a Russian oil platform owned by oil and gas giant Gazprom in the Arctic Ocean 56 days ago. read more

Gazprom Expansion of Sakhalin-2 LNG Plant May Cost $7 Billion

January 30, 2012, 5:20 AM EST

By Jake Rudnitsky

Jan. 30 (Bloomberg) — OAO Gazprom and its partners in the Sakhalin-2 project may decide on expanding their liquefied natural gas plant this year, to add supplies by 2018, said Andrey Galaev, the venture’s chief executive officer.

An expansion may cost $5 billion to $7 billion based on preliminary estimates, Galaev told reporters today in Moscow. Depending on changes in oil and gas prices, the construction cost may drop as low as $3 billion or climb as high as $8 billion, he said. read more

Russia-InfoCenter – Moscow, Russia

10.06.2009

Royal Dutch Shell is interested in taking part in development of Sakhalin 3 project conjointly with Russian Gazprom, the spokesman for the Shell’s office in Russia said. Besides, he noted, that the company is also holding negotiations on cooperation in the number of projects with Rosneft.
      
Earlier Gazprom’s spokesman reported that licenses for exploration and development of three blocks of Sakhalin 3 project were at the preparatory stage. Both, Gazprom and Shell have experience of collaboration within Sakhalin 2 project.  read more

Royal Dutch Shell said it is examining plans with Gazprom to expand Sakhalin projects beyond their liquefied natural gas venture in the Far East.

Mr. Mitvol, 42 years old, sprang to global prominence in 2006 when he accused Royal Dutch Shell of a string of environmental failings at its giant Sakhalin II oil and gas project in Russia's Far East. Under pressure from Mr. Mitvol and other Russian officials, Shell, which had a 55% stake in the project, sold control to state-controlled OAO Gazprom. Shell now owns a 27.5% stake in the project.

Mitvol, deputy head of environment watchdog RosPrirodNadzor, led a 2006 attack on the Sakhalin-2 energy project that ended only after Royal Dutch Shell (RDSa.L) ceded control of the project to state-controlled gas giant Gazprom (GAZP.MM)

“Oil prices are lower, and may continue to stay low for a period, and that will ease access to reserves,” Shell Chief Executive Officer Jeroen van der Veer told Bloomberg News in an interview in London on March 4. “It is not happening now, but it will happen.”

Oil and natural gas development off the coast of Sakhalin Island in Russia's Far East could have forced endangered whales to leave their habitat in the area, a local WWF spokesperson said on Thursday.

In yet another example of Kremlin energy politics that so unsettle Western investors, in late 2006 Gazprom wrested control of the huge oil and gas field from Shell after it was accused of breaking environmental laws. Gazprom then became the majority owner.

Gazprom bought control of the $22 billion Sakhalin-2 project after a prolonged crisis that forced Royal Dutch Shell (RDSa.L), the project's former leader, and its partners to reduce their holdings. Analysts had expected the battle would lead to delays. Shell is now a minority shareholder, along with Japan's Mitsubishi (8058.T) and Mitsui (8031.T).

Yuzhno-Sakhalinsk, 18 February 2009: President Dmitry Medvedev today opened Russia's first liquefied natural gas (LNG) plant built by Sakhalin Energy Investment Company Limited (Sakhalin Energy).

Gazprom bought control of the $22 billion project after a prolonged crisis that forced Royal Dutch Shell, the project's former leader, and its partners to reduce their holdings. Analysts had expected that the battle would lead to delays. Shell is now a minority shareholder along with Japan's Mitsubishi and Mitsui.

"To invest or not to invest. We are convinced that it is better to keep on investing. You have to replace easier oil with more difficult oil. You can do that best with long-life projects that you can do for years," said van der Veer, singling out as an example Shell's $20 billion investment in Russia's Sakhalin 2 project.

The oil spill is believed to have occurred on Sunday after a tanker left the liquefied natural gas plant which is still under construction. The plant is owned by Sakhalin Energy which is the operator and investor for the $20 billion Sakhalin II project.

In the hard commercial world, Shell is, as always, prepared to do whatever it takes to meet its objectives, whether in the USA (bribery and corruption), Nigeria (fuelling corruption and violence, with no end to the gas flaring), the North Sea (production and profit before offshore worker lives) or in Russia (bribery and corruption on the Sakhalin-2 project).

Investors are now fleeing Gazprom stock...

The Russian national anthem blared over the loudspeakers as dozens of oilmen and officials braved the freezing cold to watch the tanker come in, celebrating the launch of year-round oil production from Sakhalin-2, the largest oil and gas project in the world.

A contract with the chief executive of Sakhalin Energy, the operator of the Sakhalin II oil and gas project off Russia's Pacific Coast, has been extended for 2009, a Gazprom executive said Thursday.

This article was originally published in the December 2008 issue of the IAGS Journal of Energy Security

SUNDAY, 14 DECEMBER 2008 00:00 WARREN WILCZEWSKI

Motivations behind the recent flurry of activity vary. With crude (and thus prices of gas exports linked to it) currently below Russia’s $70 budget break-even point, the Kremlin needs a catalyst to bring prices up again. In this sense the aftermath of the Georgia conflict must have been a disappointment. Despite reports of Russian bombs landing just meters away from the Baku-Tbilisi-Ceyhan oil pipeline, energy prices continued dropping throughout August. Simultaneous saber-rattling rhetoric from Tehran, and suggestions by Revolutionary Guard General Mohammad Ali Jafari of a possible strike on US forces in the Strait of Hormuz, also failed to slow this downward slide. As prices continued to fall into September Russian Deputy Prime Minister Igor Sechin, attending OPEC’s Vienna meeting as an observer, suggested closer cooperation with the oil cartel, and proposed holding a meeting of the group in Moscow. After even this move failed to halt the decline in oil prices, to which most of Russia’s gas supply contracts are linked, a new approach was required. read more

YUZHNO-SAKHALINSK, December 12 (RIA Novosti) - Sakhalin Energy launched year-round oil export deliveries on Friday via a new oil terminal as part of the Sakhalin II oil and gas project off Russia's Pacific Coast, the company said in a statement.

Foreign investors were given some serious lessons, when the state took over the Shell-led Sakhalin-2 project...

Mitvol was appointed deputy head of the environmental regulator in April 2004, but came to international attention in late 2006 when he led a campaign against oil major Shell that resulted in a lucrative project being sold to Gazprom.

Friday, November 07, 2008 Updated at 07 November 2008 0:11 Moscow Time.

Gazprom’s Sakhalin Energy venture began filling an oil pipeline from Sakhalin-2 that may allow it to start year-round crude production this year. 

Sakhalin Energy expects the first tanker loading at the port of Prigorodnoye by the end of 2008, said Marina Makarova, the firm’s pipeline development manager. 

(Bloomberg)

SOURCE ARTICLE

Shell's traditional rival BP is a safer short-term bet. Its production growth will be faster in the short term, and the projects offer higher margins. It is also spending less to deliver that growth. This gives investors greater comfort that falling oil prices won't endanger its dividend, and might explain why BP shares have outperformed Shell's by 7pc in since the beginning of September.

By John Donovan

7 October 2008

Shell employees will need to be even more on their guard when communicating by email or using instant messaging systems. Shell Global Security managed by Ian Forbes McCredie OBE, a former senior officer of the British Secret Service, will now have access to an archive of all such communications.

The new security monitoring systems are thought to be an attempt to stem the flow of leaked emails to what Reuters has described as the “unofficial” Shell website, royaldutchshellplc.com read more

Did Shell breach the rules?

Shell’s input into the Sakhalin environmental audit is questioned

Related Articles

Original Article read more

Gazprom's consolidated debt stood at 1.2 trillion rubles ($48 billion) at the end of 2007, up 52 percent on a year earlier, after the company acquired control both of the major Sakhalin-2 offshore project and of Moscow utility Mosenergo.

SOCHI, Russia, Sept 19 (Reuters) - Royal Dutch Shell plans a new exploration project in Russia and is considering three oil fields in Kalmykia in the Urals as possible sites, a source familiar with the plans said on Friday.

Plans by energy giants BP and Gazprom to exchange assets in Russia and create an international alliance for investments around the world have been shelved.

businessGreen.com

Greenwash Champions

Energy giant accused of leaning on authors of independent environmental report to help secure financial backing for controversial oil and gas extraction project

Tom Young, BusinessGreen, 01 Sep 2008

Royal Dutch Shell is facing allegations that it was heavy handed in influencing a supposedly independent environmental report on one of the world’s largest oil and gas extraction projects.

A report in The Observer yesterday cited email evidence that allegedly shows Shell looked to downplay some of the environmental criticism included in the review of the $22bn Sakhalin II Project in Russia – which has now received the bulk of the funding it required for work on the project to begin. read more

This article relates the saga of the Sakhalin II project, one of the earliest of the Russian production sharing agreements.

In one of the most blatant instances, Shell Oil was forced to yield control of its operations off Sakhalin Island in exchange for a payment of $7.4 billion from state-dominated Gazprom. Most outside analysts estimate that Shell's share was worth $15 billion to $17 billion.

Gazprom wrested control of the $22 billion Sakhalin-2 oil and gas project from Royal Dutch Shell for a fraction of market value.

Deliveries from the Sakhalin-2 project to customers in Japan and South Korea were postponed to early next year from the middle of 2008, Platts said.

Two years ago, the company was forced to surrender control of the huge Sakhalin-II oil field to Gazprom in what was seen as part of a wider move by the Kremlin to renationalise its resource assets.

Shell declined to comment, but a spokesman said the company had "learned our lesson in Russia" after the forced sale of half its stake in the $22bn Sakhalin-II oil and liquefied natural gas field, off Russia's east coast, in 2006 to state-owned Gazprom.

Mr Mitvol had led the pressure on Royal Dutch Shell over its Sakhalin 2 oil and gas project off the east coast of Russia, which led to it having to cede control in the project to Gazprom.

Cook joined the Shell board in 2004 in the aftermath of the embarrassing reserves scandal that cost chairman Sir Phil Watts and finance director Judy Boynton their jobs. She was devastated by the shake-up, having liked and respected Watts, but she refused to be deflected by the upheaval, choosing instead to get on with the job.

GOOD things come to those who wait. No pain, no gain. Every cloud has a silver lining. For investors in Royal Dutch Shell in need of a pep talk, these might be clichés worth repeating.

There is a chance – however remote – that growth might come inorganically, says ABN Amro, describing a merger with BP or Total as "possible and desirable"

The truth is that the rule of law in Russia was mocked, not strengthened, under Vladimir Putin, and it remains a sham. It offered no more protection for Shell (squeezed out of the Sakhalin-2 gas project after being threatened with a $30 billion environmental lawsuit) or Yukos (dismantled by the Tax Ministry and sold off to Kremlin allies) than it does now for BP or 140 million ordinary Russians.

A year earlier, Royal Dutch Shell was pressured to sell a controlling stake in the world’s largest oil and natural gas development, Sakhalin-2, to Gazprom. In that case, the government cited environmental damage in a pipeline project.

Of the 15 former Soviet republics, Kazakhstan is sitting on the sole "superfield" discovered in the last three decades. With proven reserves of 35 billion barrels, Kazakhstan potentially contains the world's third largest reserves of oil, after Saudi Arabia and Iraq.

Printed below are links to documents released to the owners of this website (Alfred Donovan and John Donovan) by Royal Dutch Shell following a Data Protection Act application: –

1. Shell internal email correspondence recording Shell’s intent to “Kill” a Sunday Times story about our involvement in the Sakhalin-2 debacle;

Sakhalin-2 file 7: 5 pages Shell/SEIC internal emails concerning wish to “kill” Sunday Times story (it was “killed”)

2. Email correspondence with Shell on Security Matters read more

David Greer knows about bad publicity. As deputy chief executive of Royal Dutch Shell's Sakhalin arm, running the Sakhalin-2 project off the far-east coast of Russia, he suffered the indignity of having an internal memo, which was designed to motivate his managers - "lead me, follow me, or get out of my way" - leaked to the Financial Times last year.

Below is a compilation of information put together for certain third parties. It all relates to our involvement in the Sakhalin-2 project which led to Shell's loss of its ownership stake and the resignation of David Greer. We have published for the first time the correspondence file relating to Oleg Mitvol, the so called "Kremlin Attack Dog".

Having bullied Shell into handing over control of its Sakhalin-2 gas field, we thought his reward would be the Order of Lenin, not a broom cupboard.

n 2006 he gained international attention by leading a campaign against oil major Shell that led to a lucrative project being sold to Gazprom.