Shell cedes control of Sakhalin-2 to Gazprom

MOSCOW: Gazprom, the Russian energy monopoly, seized control of the world's largest combined oil and natural gas development Thursday after a highly publicized campaign of pressure on its foreign operator, Royal Dutch Shell.

The sale of 50 percent plus one share followed months of mounting regulatory problems at the site, problems that President Vladimir Putin, in announcing the entry of Gazprom into the project, said would now likely be resolved.

Gazprom will pay $7.45 billion for the controlling share of Sakhalin-2, a price analysts said was below market value.

The agreement will lower the British-Dutch oil company's production potential and the amount of its reserves, but it removes a large measure of uncertainty over the deal by establishing the Kremlin's support.

Putin announced the deal at a Kremlin meeting with executives from Shell, Mitsui and Mitsubishi, who are partners in the consortium, and Gazprom. He made a point of saying that Russia remained open to energy investment.

Read all on Herald Tribune

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Oil production in Sakhalin reached 14 million tonnes in 2007

YUZHNO-SAKHALINSK, December 29 (Itar-Tass) - Oil production in Sakhalin reached 14 million tonnes in 2007. It is a record-high result over the entire history of exploitation of oil fields on the island and on its shelf, governor of the Sakhalin region Alexander Khoroshavin said on Saturday summarising the results of the year. In 2006, the oil production on the island reached some six million tonnes.

• Sakhalin on Wikipedia
• Sakhalin 1 project
• Sakhalin 2
• Sakhalin 2 on Wikipedia
  

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Oil Production on Sakhalin: How Long Before We See Another Valdez?

Compiled by Nikolai Maleshin with information provided by Elena Surovikina and Gary Cook.

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This past June foreign oil companies forming the joint consortium, Sakhalin Energy Ltd., celebrated the official commencement of oil drilling on the shelf off Sakhalin Island in the Russian Far East. Their festivities, however, were somewhat dampened by a protest organized by Greenpeace Russia and Sakhalin Environmental Watch. The groups' opposition is summarized by their slogan, "the first oil means the last fish."

The Sea of Okhotsk is one of Russia's most biologically diverse and productive marine ecoregions. Economically, the Sea of Okhotsk is a critical resource for Russia, supporting approximately 70 percent of the nation's marine products, including a high percentage those intended for export such as crab and echinoderms. From January to May 1999, the export of these species generated $80 million for Russia. (The estimated worth of illegally exported marine products is an astounding $300 million). In comparison, Sakhalin's oil export revenues during this same period reached a modest $50 million. While the price of oil is continuing to drop, the price for marine products rose 29.4 percent during the first half of 1999.

Oil development now poses a grave threats to the marine region and all of its valuable living resources. Alarming signs of things to come were seen this past spring when mass numbers of Pacific herring (Culpea pallasi) washed ashore in the Piltunsky Gulf , just 16 km inshore from the Molikpak oil drilling platform. The official explanation of the massive fish death was DDT poisoning. However, analyses conducted by two independent laboratories in different countries revealed no traces of DDT in the fish. The tests did identify the presence of oil in the fish, pointing to oil extraction ativities as a culprit in the fish mortality.

Read Full Text on RussianConservation.org

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Russian embassy in Pakistan works in usual regime

ITAR-TASS

ISLAMABAD, December 29 (Itar-Tass) - The Russian embassy in Islamabad has been working in a usual mode, but it has tightened security following the recent dramatic developments in Pakistan and death of ex-prime minister Benazir Bhutto who fell victim to a terrorist attack.

None of the workers of the Russian embassy or their families has been hurt during local protest acts staged in Islamabad in recent days.

On Saturday, the situation in Islamabad was reported calm. After nationwide mourning for Benazir Bhutto was declared all state organizations, shops, banks, markets and fuelling stations remain closed. Heavy police forces have been guarding the area of the presidential palace, governmental organizations and the diplomatic enclave.

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