ASIA

Shell under pressure from Russians

A potential row between the Russian government and Royal Dutch/Shell, could result in the Anglo-D...

This clash could seriously jeopardise the Shell-led £6 billion gas energy project in Sakhalin. While the reasons behind the investigation are unknown, locals and ecologists say that the oil giant is not giving enough back to the community and is ruining their coastline.

Artyukhov confirmed that his ministry had reason to file a number of complaints about the energy giant, with possibly more to come.

He said "based on the ministry's information, we can expect a number of new complaints, right up to bringing up the question of withdrawing licences."

Shell has come under heavy fire ever since it decided the pipeline, which would carry the Sakhalin oil and gas, would be built underground. This move has angered ecologists who question the validity of building an underground pipeline in an area prone to earthquakes.

Another bone of contention is the fact that Sakhalin residents have yet to benefit from the up to £18 billion in investment that the island is expected to receive. Furthermore, despite having a clause in the original contract stating that up to 70% of the labour and goods used should be Russian, Shell has yet to fulfil this stipulation.

The Shell-led Sakhalin Energy consortium has already invested around £6 billion on the island and is expected to make a profit in the hundreds of billions of dollars. Out of this, the Kremlin is expected to get an estimated £29 billion in commission payments, so a ban is unlikely. However, the ministry's 'investigation' could be seen as a ploy to renegotiate of the terms of the original project.

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