Shell criticised for Russian exploration project

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Thursday 28 July 2005 – WWF <?xml:namespace prefix = st1 ns = ''urn:schemas-microsoft-com:office:smarttags'' />UK Website
Shell's Sakhalin project has the very real risk to drive the Western Gray Whale towards extinction.
Shell's second quarter results show an income of $5.2 billion, but ignore the social and environmental cost of their exploration, in particular around the island of Sakhalin and the impact on the critically endangered Western Gray Whales that could be driven towards extinction by the project.In the last two years Shell has down graded their oil reserve estimates and admitted a doubling of cost in developing their flagship Sakhalin II liquefied natural gas project, a $10 billion overspend, as well as severe delays. Following on from these calamitous years Shell has been profit focussed and has shown little regard for responsible environmental or social development on Sakhalin. ''Shell is bulldozing through the Sakhalin project with little regard for their social and environmental impacts,'' said Robert Napier, WWF Chief Executive. ''Their Sakhalin project has the very real risk to drive the Western Gray Whale towards extinction according to an independent study conducted by leading whale scientists. It has also caused untold damage to many important salmon spawning streams resulting in local communities protesting and blockading roads. Yet Shell continues to forge ahead.'' International banks have not backed the Sakhalin II project and the European Bank for Reconstruction and Development (EBRD) has still not approved the project which it has described as 'unfit for purpose' due to environmental concerns in June this year. In addition to the EBRD, WWF is calling on all the Equator banks (banks signed up to the Equator principles - a set of voluntary social and environmental guidelines covering project finance over $50 million) not to back Sakhalin II, as well as all other potential investors.''In addition to the high financial risk banks are also in danger of tarnishing their reputation by backing the Sakhalin project, with all its associated environmental and social impacts,'' added Robert Napier.''If Sakhalin is one of the 'elephant' projects announced by Shell's chief executive Jeroen van der Veer last month then based on current evidence the world will have to suffer a lot more damage in the future.''Shell announced an increase in its exploration expenditure for 2005 and 2006 as they explore in more and more remote and environmentally sensitive places in the world. WWF warns Shell that the high environmental impacts and risks on Sakhalin must not be repeated in two equally remote areas in the near future - the Barents Sea (North of Russia) and Beaufort Sea (North of Canada).