The Guardian: BP's Russian find alarms campaigners: “Shell is already facing the wrath of Friends of the Earth after one of its vessels ran aground and caused an oil spill at Kholmsk on Sakhalin. Yesterday, environmental groups expressed anger that the Anglo-Dutch group was seeking to appoint an expert in crisis management and public relations for the area.” (ShellNews.net)
Terry Macalister
Thursday October 7, 2004
BP has struck lucky in Russia with a potentially massive new oil and gas find off Sakhalin Island in the far east of the country but the success has alarmed environmentalists.
The latest news from Russia came as global oil prices hit a record peak of nearly $52 a barrel fuelled by the impact of Hurricane Ivan on American crude inventories.
The first well drilled was described by BP as "exciting" in a Sakhalin region that has already spawned multibillion pound developments for Shell and ExxonMobil.
BP is already benefiting from a $7bn (£4bn) merger with Russian oil group TNK which helped the British group to report an 11% rise in its third-quarter oil and gas output this week.
But the Sakhalin drilling is not part of the TNK tie-up and has been undertaken by BP in cooperation with another Russian oil firm, Rosneft.
BP said it had discovered significant amounts of oil and gas on the well drilled under an exploration licence for the Kaigansky-Vasukansky area.
A spokesman for the British oil company said the hydrocarbon discovery was "pretty exciting" but the scale of the find would not be known until the well was properly tested, probably next year.
The announcement caused alarm among environmental groups worried about Sakhalin's position as a whale breeding area.
BP said it used "whale watchers" on its vessels but had not seen any in the area. Nick Rau, oil campaigner with Friends of the Earth, said Sakhalin was Russia's largest single fishing area.
"We would be very concerned about any further developments in this area where there are a lot of endangered species. No one has yet looked at the cumulative effect of all these different oil developments."
Shell has been producing oil since 1999 at Sakhalin-2 while Exxon is planning to bring its Sakhalin-1 scheme on stream next year.
Sakhalin is seen as an important future source of oil for export to the US while the gas could be shipped to Asia.
Russian sources say the new site, Sakhalin-5, may hold 4.4bn barrels of oil - as much as the entire output of Qatar. But such estimates are seen by BP as unrealistic given the early nature of the drilling.
Shell is already facing the wrath of Friends of the Earth after one of its vessels ran aground and caused an oil spill at Kholmsk on Sakhalin.
Yesterday, environmental groups expressed anger that the Anglo-Dutch group was seeking to appoint an expert in crisis management and public relations for the area.
"Shell has created a beautifully crafted Potemkin village of environmental responsibility: it looks great, but there's nothing of substance behind it. It is very telling that we get an oil spin doctor before we get an oil spill response plan," said Doug Norlen of Pacific Environment.
Shell declined to comment last night.
http://www.guardian.co.uk/business/story/0,,1321222,00.html