Royal Dutch Shell Group .com No public financing for Shell’s Sakhalin II project!: Posted 29 November 2005

It is very likely that the EBRD is going to take an important decision about the Sakhalin II project in the next few days - therefore we would like to ask you for urgent help.

The Shell-led Sakhalin Energy company is seeking up to USD 300 million from the European Bank for Reconstruction and Development (EBRD) for the highly controversial Sakhalin II project in the Russian Far East, the largest oil and gas project in the world.

Despite a wide range of areas where the Sakhalin II project violates the EBRDs lending guidelines, against all the odds it seems that any day now the EBRD will decide that the project is in a suitable state for funding.

An independent panel of experts convened by Shell found in February 2005 that the off-shore platforms and undersea pipelines of Sakhalin II threaten the last 100 critically endangered Western Gray Whales with extinction, and that the loss of one additional adult female per year “would be sufficient to drive the population towards extinction with high probability.”

At the same time, Sakhalin II currently has no oil spill response plan proven to work in the dangerous sea ice conditions common in the waters off Sakhalin Island. The island’s ecology and economy is thus threatened by the oil company’s negligence.

The project’s eight hundred kilometres of onshore pipelines slice through wild salmon rivers despite the fact that these salmon are a primary source of income for one third of the island’s residents and are crucial to indigenous peoples’ culture and livelihoods. The project’s dumping of dredged wastes into the fisheries-rich Aniva Bay makes these community impacts even worse.

Sakhalin II is based on an inequitable Production Sharing Agreement between the Russian Government and the oil company that will result in far less revenues for the Russian side than originally promised. This, combined with the recently announced USD 10 billion cost overrun, will result in little - if any - economic benefit for Russia or Sakhalin Island.

Tell your country’s representative on the EBRD board of directors not to support EBRD financing for the Sakhalin II project!

You can do so by signing and immediately sending the text below to your representative at the EBRD.

Sample Letter

Dear ,

Your constituency is being asked to support the Sakhalin II oil and gas project in the Russian Far East through the European Bank for Reconstruction and Development (EBRD). The EBRD's management seeks your acceptance of the project’s Environmental Impact Assessment (EIA) despite the fact that over the last three years the bank has found worsening examples that Sakhalin II does not comply with the EBRD's environmental and social policies:

  • Independent experts have concluded that the project threatens the critically endangered Western Gray Whale with extinction
  • No oil spill response plan is in place that is proven to work in dangerous sea ice conditions, threatening the island’s ecology and economy

Sakhalin II pipeline construction is slashing across over100 wild salmon rivers and spawning beds; damaging the habitat of keystone species that provide primary income for 1/3 of island residents, and that are crucial to indigenous people’s culture and livelihood

Dredging wastes are being dumped into Aniva Bay and the illegal construction of a pier has taken place despite the importance of this fisheries-rich water to the island’s economy

  • A USD10 billion cost overrun, an inequitable revenue sharing scheme, and long-term environmental damage will leave the island worse off than before.

Acceptance of the Sakhalin II EIA will send a dangerous message that EBRD is willing to ignore its own policies and to disregard spiraling project risks.

We urge you to reject the Sakhalin II EIA as “unfit for purpose.”



Sakhalin Environment Watch´s website on Sakhalin II project

Pacific Environment´s website on Sakhalin II project

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