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The Guardian: Protests increase over Shell pipeline: "Earlier this year the EBRD, which has been asked to provide public money, deemed the scheme "unfit for purpose" because safeguards had not been put in place covering various issues. But a board meeting today will decide whether to finally ditch the project or proceed with a 120-day consultation of local people before making a final decision. ": Wednesday 14 December 2005

WWF says Russian project is affecting rare whales
Group fears development bank will give backing


Terry Macalister
Wednesday December 14, 2005
The Guardian

 
The European Bank for Reconstruction and Development (EBRD) appears poised to overlook mounting concern about the future of an endangered whale species today and give its blessing to a $20bn (11bn) Shell gas project in Russia.

Pressure on both the bank and the oil company rose last night when the World Wildlife Fund said a new survey showed the feeding patterns of the last remaining 100 Western Pacific whales were already being hit by preparations for Sakhalin 2.

The developments came as Shell confirmed plans - disclosed in yesterday's Guardian - to increase its overall annual capital spending by 27% to $19bn to pay for the rising cost of various projects including Sakhalin, a huge oil and liquefied gas installation on an island off Russia's east coast. The scheme has become a major headache for the Anglo-Dutch group because of ecologists' protests and a doubling in costs from an expected $10bn.

Earlier this year the EBRD, which has been asked to provide public money, deemed the scheme "unfit for purpose" because safeguards had not been put in place covering various issues. But a board meeting today will decide whether to finally ditch the project or proceed with a 120-day consultation of local people before making a final decision.

The EBRD, set up by western governments to help build market economies in eastern Europe, said it could not pre-empt the meeting's outcome but the WWF fears a go-ahead for Shell. The group warned that any moves to proceed would make a "mockery" of the Equator Principles, which govern the behaviour of financial institutions in sensitive cases such as this.

The EBRD will have to take into consideration the latest survey from the WWF, which covers the whales' peak feeding season. It shows fewer whales were present in the feeding ground nearest to the base of a new concrete platform built by Shell. Last night the oil group said it had done all it could to ensure that the whales were not affected and pointed out that its platform was seven kilometres away from the feeding ground.

"We also rerouted the offshore pipeline further south and have obtained the best possible scientific advice from a panel of experts to assess the impact on the whales," said a company spokesman. But Paul Steele, WWF International chief executive, said Shell had failed to meet even its own environmental standards. "We urge the bank to decline financing until Shell faces up to its own responsibilities," he said,adding that a decision to proceed by the EBRD would encourage commercial banks that had held off funding the pipeline until they had seen what the EBRD decided to do.

Meanwhile, the US oil group ConocoPhillips confirmed yesterday that it had tied up a $33bn deal to take over Burlington Resources to create the largest natural gas producer in north America.

Burlington shareholders will receive $46.50 cash plus 0.7214 Conoco shares for each of their shares but Conoco stock fell 5% - its second heavy fall in 48 hours - as some analysts questioned whether it was paying too much. They fear Conoco is coming in at the top of the market when gas prices are expected to fall but Fadel Gheit, an analyst at Oppenheimer & Co brokerage, believed it was a "good deal".


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