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Regulator won’t seek compensation from Sakhalin-2 operator

violations in Sakhalin-2 project.jpg

A Russian environmental regulator will not go to court and seek compensation for the environmental damage from the operator of the Sakhalin-2 oil and gas project, a top official with the regulator said Thursday, ITAR-TASS reported.

The operator, Sakhalin Energy, is prepared to remedy the damage, said Oleg Mitvol, a deputy director with the Federal Service for Natural Resources Oversight

Russian natural gas monopoly Gazprom, who has recently joined the project as the controlling shareholder, has established a working group to assess the damage to the environment, Mitvol said. Gazprom is expected to reach agreement with the regulator on its actions aimed at remedying the damage, the official said.

In case Sakhalin Energy is unable to remedy the damage, it will have to pay compensation, Mitvol said. The damages will be assessed by sometime in June-August, he added.

Gazprom reached a deal in December to buy a 50% plus one share in the Sakhalin-2 project from the project's current shareholders, Royal Dutch/Shell and Japan's Mitsui and Mitsubishi, for U.S. $7.45 billion. The deal followed nearly a year of sustained attacks on the project by Russian regulators over purported environmental violations. Gazprom was expected to close the deal before March 31.

The Sakhalin-2 project area, located on Russia's Sakhalin Island, has reserves of 150 million tonnes of crude and 500 billion cubic meters of natural gas.

© Prime-Tass

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