Sakhalin II Oil and gas project

Reacting to today's announcement from Sakhalin Energy that it will reroute the offshore pipelines in its Sakhalin II oil and gas project, international NGOs monitoring the controversial development remain highly concerned that this move represents only one step towards the protection of the endangered western gray whale and as such does not justify backing from international project financiers.

Significantly, while Sakhalin Energy has decided to listen to the recommendations of an independent scientific review panel convened by the World Conservation Union (IUCN) regarding the rerouting of the offshore pipelines, its decision not to relocate the PA-B platform in the Piltun-Astokhskoye field goes against the expert panel's advice. Commenting on the sensitive location of the platform in relation to the whales' feeding area, the panel noted: “Clearly, from the perspective of gray whale conservation, the farther away the platform is from the foraging grounds the better.”

Petr Hlobil, Campaigns Coordinator of CEE Bankwatch Network, said, “Sakhalin Energy's refusal to relocate the PA-B platform is based on their confidence that their mitigation measures can offset potential impacts on the whales. Yet the IUCN's panel was explicit in its report about a string of information gaps in the company's data relating to mitigation measures. The panel's advice to relocate the platform as far away from the foraging grounds as possible was clearly a coded way of saying that, on the evidence to date, Sakhalin Energy can not be trusted.”

Today's announcement from Sakhalin Energy does nothing to allay fears about other highly hazardous aspects of the Sakhalin II project's environmental and social impacts, including the need to develop an adequate Indigenous Peoples plan

In 2003 the European Bank for Reconstruction and Development (EBRD) determined that the Sakhalin II project's Environmental and Social Impact Assessment is "unfit for purpose" and said that it will not finance the project unless fundamental social and environmental problems are resolved. Support is also being considered by Japan Bank for International Cooperation, the U.S. Export-Import Bank, and the U.K. Export Credits Guarantee Department. A total of USD 5 billion is being sought from these public lenders.

Petr Hlobil commented, “The international public lenders, like the EBRD, as well as the private banks that are planning to commit massive investments into Sakhalin 2 should insist on further changes to the project before any deal is signed. Despite today's triumphalism from the oil company, the project is still not fit for purpose, in terms not only of the platform location but also the lack of sufficient mitigation measures for onshore environmental and social impacts. There are still, to take one example, major question marks over how Sakhalin Energy plans to deal responsibly with pipeline river crossings over economically vital salmon spawning grounds on Sakhalin Island.”

For more information, contact:
Petr Hlobil
CEE Bankwatch Network
Tel: +420 274 78 22 08
petr.hlobil at ecn.cz