Russia revokes approval for Shell-led project

Russia’s Natural Resources Ministry said today it has revoked the environmental approval of a Shell-led liquefied natural gas project on the Far East island of Sakhalin, a decision that could effectively halt work on the project.

A state safety watchdog also criticized an oil terminal built by Exxon Mobil Corp., and analysts said the moves could be a step toward reconfiguring a handful of decade-old deals that put Western companies in control of some of Russia’s richest oil and gas fields.
In a statement, the resources ministry said it had decided to revoke the permit at the $20 billion Sakhalin-2 project “and satisfy the arguments of the prosecutor’s office,” which alleged over the weekend that permission to develop the second phase of project had been granted illegally.

An order to this effect has been prepared, the ministry said, and must be approved by the state technological safety oversight agency watchdog, Rostekhnadzor. It would take legal effect after that.

Ministry spokesman Rinat Gizatulin was later cited by Dow Jones Newswires as saying that the decision may only be temporary and that the license could be reinstated within six months.

Houston Chronicle