RUSSIA: Russian Foreign Minister Sergei Lavrov seeks to calm Western concerns over Russia's energy policy

Russian Foreign Minister Sergei Lavrov sought to alleviate Western concerns over Russian energy deals on Wednesday (September 27), saying talk of revising production sharing deals or pushing foreigners out of the sector was unfounded, Russian news agencies reported. A recent barrage of threats from Russian officials to withdraw an ecological permit for the Shell-led Sakhalin-2 oil and gas project have sparked fears that Russia wants to renegotiate the production sharing agreement (PSA). "The (environmental) checks that need to be carried out do not mean that the licenses in the framework of developing Sakhalin-2 will be revoked. The only aim of these checks is to ensure a fulfilment of agreements by all parties, without any exceptions," said Lavrov at a meeting of oil executives, federal government and regional officials on Sakhalin on Wednesday. On Tuesday (September 26), Natural Resources Minister Yuri Trutnev said work on the Royal Dutch Shell-led Sakhalin-2 project could continue while a full-scale ecological probe, due to start on October 25 and last a month, is held. Shell was not immediately available for comment. Shell has come under fire from Russia after admitting the project would cost $20 billion, twice as much as it originally estimated, complicating talks on a strategic swap of assets with state-controlled gas monopoly Gazprom. The doubling of Shell's costs has also infuriated Gazprom, which wants to take an equity stake in Sakhalin-2. The project will supply liquefied natural gas to export markets such as Japan and Korea. Concerns were also raised about the neighbouring Sakhalin-1 PSA project run by Exxon Mobil, after industry sources said oil pipeline loading had been suspended for technical checks. Exxon Neftegaz, a group uniting Exxon and its partners in Sakhalin-1, has said it was unaware of any order to suspend work and business is continuing as usual. Despite Lavrov's reassurance, Kremlin accountants, environmental investigators and Gazprom are all still demanding answers from Shell. Even as he spoke, investigators from the Natural Resources Ministry's environmental agency, which has led the campaign on Sakhalin-2, arrived to inspect its facilities. They were joined by experts from WWF International, which has repeatedly warned that Shell's offshore platforms were threatening the breeding areas of grey whales and pipeline river crossings were damaging salmon migration routes. A one-month probe by the ministry will begin on October 25.

ITN Source | September 27, 2006

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