Russian authorities may order the Sakhalin Energy Ltd. international energy consortium to stop pumping oil at Sakhalin-2
Russian authorities may order the Sakhalin Energy Ltd. international energy consortium to stop pumping oil if the company does not correct environmental violations registered over the past year.
Russian officials also said they are still several bureaucratic steps away from actually halting production at the international venture, which is developing an offshore oil and gas site known as Sakhalin-II on Russia's Pacific coast.
Sakhalin Energy currently pumps about 80,000 barrels a day of crude oil, and plans to start shipping liquefied natural gas, or LNG, to East Asian and North American markets starting in 2008. The Sakhalin Energy consortium is majority owned by Shell, while a subsidiary of Japan's Mitsui & Co. Ltd. (MITSY) holds a 25% stake and Diamond Gas Sakhalin, a subsidiary of Japan's Mitsubishi Corp. (8058.TO), holds 20%.
Last year Shell announced a preliminary swap deal with Gazprom that would give the Russian gas giant up to 25% in Sakhalin Energy in exchange for a 50% interest in Gazprom's massive Zapolyarnoye gas field in northern Russia.
Russia's Ministry of Natural Resources said in a release on Thursday that Sakhalin Energy had pumped more coolant water from its offshore production platform back into the sea than allowed under its operating licenses, hadn't turned over information to the Russian authorities by deadline and had registered higher-than-acceptable levels of pollution in the surrounding waters.
If environmental problems continue, the Ministry said Friday, officials will order the company to stop pumping oil by revoking its water-use license.
