By Brian Johnson - 18th September 2006
EU energy commissioner Andris Piebalgs has reacted strongly to Russian plans that could stall a multi-billion euro oil and gas development off the north coast of Japan.
Russia on Monday announced that it has revoked a crucial environmental permit for the Sakhalin-2 development that could see work on the €16bn energy project, led by Royal Dutch Shell, halted.
“I take this announcement very seriously indeed,” said Piebalgs.
“In order to ensure that companies are willing to invest in multi-billion euro energy projects, a secure and predictable investment climate is necessary in Russia as in the EU or indeed any country.”
FT Europe reports that the cancellation, by the natural resources ministry, comes as Moscow looks to bring more strategic assets under Kremlin control.
The paper says that energy analysts believe the decision has political motives and could be linked to Moscow’s desire to see its state controlled gas monopoly, Gazprom, obtain a stake in Sakhalin-2, the world’s biggest oil and gas venture.
Piebalgs said that without a predictable investment climate in Russia there would be uncertainty about the world's future energy supplies.
“Every country has the legitimate right to ensure that any oil or gas extraction on its territory is undertaken to the highest possible environmental standards,” said Piebalgs.
“But in the event that such issues have been identified regarding the Sakhalin-2 development, I believe that they should be clearly and unequivocally identified by the Russian authorities and Shell must be given an appropriate time to resolve them.”
The Latvian commissioner said that the EU’s energy partnership with Russia must be based on mutual respect, predictability and non-discrimination.
“This applies as much to the ability of EU companies to invest in Russia as to the right of Russian companies to sell gas and oil freely at both upstream and downstream levels in the EU.”
“I shall be writing to Russian energy minister Kriskenko to offer my support for a rapid resolution of this issue,” added Piebalgs.
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