Foreign firms to face strict checks in Russsia

Moscow, October 25:

Russian president Vladimir Putin said on Wednesday that his government will strictly monitor all companies, including foreign ones, for environmental violations. Several Western oil companies that control energy projects in Russia have come under intense environmental scrutiny in recent months in what analysts say reflects a Kremlin drive to increase the state role in the strategic oil and gas sector.

Putin was asked during a live, televised question-and-answer session by a resident of the Far East city of Nakhodka about foreign-led projects on the Pacific island of Sakhalin.

Putin noted that “every developed country” faces the challenge of balancing growth and environmental protection, citing a costly government decision to reroute a planned Pacific oil pipeline away from Lake Baikal.

“We will preserve Baikal, you can’t measure it in money terms, it’s our national heritage. The same is the case with our work in other areas, this concerns both foreign and domestic companies,” Putin said.

“Environmental agencies in collaboration with ecological non-governmental organizations will thoroughly monitor compliance with current legislation,” he added. The foreign energy projects facing pressure include Sakhalin-2, a multi-billion-dollar liquefied natural gas development in Sakhalin led by Royal Dutch Shell PLC.

Sakhalin-2 is one of a handful of major field developments signed in the 1990s by BP PLC, Exxon Mobil Corp., and Total SA.

The deals - called production sharing agreements - handed control of energy projects to foreigners as a way to get them going at a time when Russia lacked the money to get them.