A Deafening Silence on Sakhalin Island

When Russian Energy Minister Viktor Khristenko made this comment on 31st May, I wonder if he realised the truth of his words would be put to the test within a week:

Russian Energy Minister Viktor Khristenko went on the defensive today, saying that Russia does not discriminate against foreign explorers, in a bid to quell concern over a series of high level disputes with foreign companies.

“Our approach to foreign and domestic investors is exactly the same,” Viktor Khristenko told Reuters at an energy conference.

Really?  Consider this oil spill on Sakhalin Island, which occurred on Monday night:

A major oil spill in the north of Sakhalin Island has contaminated a river used by endangered fish species to spawn, a spokesman for a regional environmental group said Tuesday.

“Local residents discovered the spill,” the spokesman said. “They saw an open valve at the base of a well spewing oil, which was flowing into the river Piltun. After blocking off the flow, they called the local Rosneft subsidiary, Okhaneftegaz, as well as the police.”

An inspection team found large pools of oil at the site, and estimated the spill at no less than 700 cubic meters (2,100 cubic feet). An area of no less than two hectares (4.9 acres) has been contaminated.

The head of the local emergencies service said the well has now been sealed off and the oil flow stopped.

An environmental spokesman said the river Pultin is used by several endangered fish species to spawn.

He said that an official notice of the spill, consisting of written and photographic documentation, has been sent to the Sakhalin prosecutor’s office, the local government administration, the environmental protection agency and the Sakhalinmorneftegaz oil and gas company.

So a Russian oil company leaves a valve from a well spewing oil into an ecologically significant river on Sakhalin Island, and the story merits a 187-word article buried far from the front page, and no comment is made by any government official or major environmental body? 

Can you imagine what the response would have been had a Shell or Exxon managed consortium been responsible for the spill?  It was the routing of a pipeline across such a river that was the primary reason cited for threatening to withdraw Sakhalin Energy’s license, just before Gazprom helped itself to a majority stake (at which point all environmental concerns were miraculously assuaged).  Note that the pipeline in question did not leak and spill any oil, nor did the pipeline contain any oil: the routing of the pipeline was enough, so the Russian environmental regulators reasoned, to revoke the operating license.  Had Sakhalin Energy caused such a spill as the one which occurred in the Piltun river on Tuesday, we would have had TV crews on the scene, the very top of the government tree denouncing the foreign energy companies for desecrating the Russian nature, and fresh calls for the expulsion of those same companies from operating in Russia.  Directors would have been lucky to avoid a night in jail.

Sadly, it is almost inevitable that another oil spill will occur in Sakhalin Island at some point in the future, despite all precautions being taken to prevent such an incident.  Should a foreign oil company be held responsible, it will be interesting to contrast the subsequent media and governmental response to the deafening silence we are witnessing this week.

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2 Responses to A Deafening Silence on Sakhalin Island

  1. W. Shedd says:

    I can’t imagine that anyone really thought that domestic and foreign gas and oil companies were playing by the same environmental rules, despite the lip-service by government officials.

    However, I do take the Russian government’s “renegotiation” of foreign corporate oil/gas development deals with a grain of salt. They obviously felt their position was improved and sought leverage for reworking contracts. I’m sure it was neither the first nor the last time that a long-term contract was revisited. The ham-handed fashion in which it happened was Russia being Russia. We’ve all observed, grumbled, and shrugged our shoulders on that score before.

  2. Larry Barrow says:

    Tim,
    I lost your alternate email address. Send it to me if you get a chance.

    Leisure Suits will make a come back.

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