Shell, TNK-BP Feel the Kremlin's Heat

[CHIMO]

Russia turned up the heat on huge foreign-led energy projects on Monday, ordering a full environmental probe of Royal Dutch Shell's Sakhalin venture and warning TNK-BP over violations at its Kovykta gas field.

Russian moves to put the brakes on Shell and ExxonMobil developments on Sakhalin Island in the Far East have raised suspicions that the Kremlin is seeking a bigger stake for Gazprom in the multibillion-dollar projects, signed when oil prices were lower and power lay with foreign investors.

The government says it is motivated by concerns over the environment -- Sakhalin is adjacent to feeding grounds for the endangered gray whale -- and dissatisfaction that the fields are running well over budget, cutting into Moscow's future earnings under the production sharing agreements that govern them.

Natural Resources Minister Yury Trutnev said in a statement Monday that there was no question of removing Shell's license for the world's biggest liquefied natural gas project.

http://www.themoscowtimes.com/stories/2006/09/26/041.html