Energy News

Russian police search ecological watchdog offices

Oct 18, 2006, 16:22 GMT

Moscow - Russian Interior Ministry agents searched the accounting offices of the country's ecological watchdog Wednesday, amid a crackdown the watchdog has waged on energy companies, especially Western ones, across the country.

'Two representatives of the ministry's organized crime unit appeared at about 9:30 a.m. ... and began to inspect documents in the accounting offices,' Oleg Mitvol, deputy head of the Federal Service for Natural Resources Use, told news agency Interfax.

Shortly after Mitvol's comments, an interior ministry spokesman denied the ministry had 'pretences' toward the watchdog.

'As [the service] issues licenses to explore for gas, we had to search licensing documents in conjunction with a criminal investigation,' Interfax quoted an unidentified spokesman as saying.

The source added that the investigation was centred around the Yuzhno-Tambeiskoye gas field, located on the northern Yamal Peninsula.

Mitvol also said Wednesday that the Sakhalin Island Prosecutor General's Office rejected claims by prosecutors that the federal service had acted improperly in recent checks on Sakhalin oil production sites.

Citing ecological violations, Mitvol last month revoked a key environmental permit allowing Royal Dutch Shell to explore and produce gas on Sakhalin, site of what will be the world's largest liquid natural gas development. Shell has invested 20 billion dollars into the project.

Many analysts have said the government pressure is aimed at giving state-owned gas champion Gazprom better terms as it tries to elbow its way onto Sakhalin. The so-called production-sharing agreements of companies including France's Total, BP and ExxonMobil have come under fire since then.

Signed in the early 1990s, the agreements allowed the Western companies more generous terms than they could expect today, as Russia asserts itself on world economic and political stages amid an influx of petrodollars and eight years of growth.

Russia provides one-quarter of Europe's gas.