Environmental protection urged as Russia’s Gazprom takes over Shell shares in Sakhalin-2

Thursday, 21 December, 2006
Moscow, Russia
The International Fund for Animal Welfare (IFAW – www.ifaw.org) is urging decision-makers to ensure that environmental protection is a priority for future running of the troubled Sakhalin-2 – an oil and gas project which jeopardises the world’s last remaining 100 Western Pacific gray whales.
Today Gazprom, Shell, Mitsui and Mitsubishi signed an agreement which will see Gazprom, the Russian oil and gas giant, take over half plus one share of Shell’s 55% stake of Sakhalin Energy Investment Company (SEIC). Earlier this month it was reported that Shell would keep a blocking stake of at least a quarter in Sakhalin-2, with Russia’s Gazprom controlling the majority after a predicted takeover of 50% of the shares of both Mitsui and Mitsubishi. SEIC will continue to operate the Sakhalin-2 project; future decisions will be made by a board representing all shareholders. 

IFAW UK Director Robbie Marsland, who visited Sakhalin this summer to view construction work, said: “Whoever ends up running this project must do all they can to protect the last remaining Western Pacific gray whales.”

IFAW has been campaigning on the Sakhalin issue for more than five years because of concerns about the fate of the critically endangered whales. Construction of an off-shore pipeline near to the feeding ground was completed this summer and monitoring of the whales using photo-identification techniques revealed a number of the whales have become skinny since construction work began, prompting fears that their feeding habits are being disrupted.

“IFAW will continue to monitor the Western Pacific gray whale population in its only feeding ground off the North-Eastern coast of Sakhalin, as well as the industrial activity in this region. We will further insist that all decisions taken by SEIC, including any new shareholders, will be made with respect to the environment, the whales and the Russian legislation,” said IFAW Russia director Maria Vorontsova, responding to latest reports on the new Gazprom-Shell deal.

President Putin has welcomed the 7.45 billion USD agreement, saying: “I very much appreciate that federal environmental agencies and investors agreed on the procedure of solving the problems…The principal questions may be considered solved, and the decision making approaches agreed on.”

Russia’s Ministry of Natural Resources announced three months ago that it was  going to revoke its environmental certification of the second phase of Sakhalin-2, a  $20 billion off-shore oil exploration project, citing numerous infractions of environmental requirements.

Since the activity of SEIC was put under strict control of the Russian environmental watchdog, Rosprirodnadzor, which  IFAW and other world renowned NGOs have been insisting on for the last six years. Fuel industry rumours have suggested the move to revoke environmental certification was financially motivated.

Examples of damage shown to international media and representatives of IFAW and other NGOs in September included damage to the sea bed near a liquefied natural gas plant at Aniva Bay (Southern Sakhalin), as well as destruction of primary forest, river crossings and salmon spawning grounds resulting from the laying of land-based oil and gas pipelines.

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Brian Sharp, Emergency Relief Officer, Stranding Coordinator
Manager, Marine Mammal Rescue and Research
Dr. Maria (Masha) N. Vorontsova, Regional Director, Russia & CIS
Regional Director, Russia & CIS
Matt Collis, Director, International Policy
Director, International Policy
Patrick Ramage, Program Director, Whales
Program Director, Marine Conservation