Sakhalin-1 and -2 oil and gas development projects, Russia

Mobilizations against environmental impacts and harm to gray whale shakes shareholders partnership and makes EBRD withdraw

<div class="horipane"><div class="title active">Description</div><div class="content"><table class="table"><tbody><tr><td class="fld"></td><td class="columns"><div class="less">The Sakhalin-1 project develops three oil and gas fields offshore in the northeastern coast of Sakhalin Island in Russia and is operated by Exxon Neftegas Limited. Discovered in 1977, the production sharing agreement for the project became effective in the late 1990s and the exploration period has formally ended in 2001. Its sister project, the Sakhalin-2 project, also includes three offshore oil and gas platforms, 15 kilometres off the Russian island of Sakhalin, in the North Pacific Ocean, located just north of Japan, off the east coast of Russia. After a long period of funding issues and after the budget had doubled from 10 billion USD to 20 billion USD in 2005, the LNG plant is operational and has now reached full capacity. It is one of the largest integrated oil and gas projects in the world.</div><a class="seemore" href="#">See more...</a><div class="more" style="display:none">Concerns have long been raised about the environmental impact of the projects. The offshore projects are believed to put in danger the Western gray whales, a species already near extinction, which feeds in the waters around Sakhalin. Also, pipelines crossing seismic fault lines, rivers and streams as well as completed and ongoing deforestation for road construction have been identified as potential high risks for the local population and especially for the environment and wildlife.<br/><br/>In 2004, environmentalist organizations were outraged after an oil spill of approximately 1,300 barrels of fuel took place on 8 September at Kholmsk on Sakhalin Island, in an area administrated by Royal Dutch Shell. This event further fuelled criticism and encouraged protests by local, national and international organizations, asking for a moratorium on the Sakhalin marine activities.<br/><br/>The indigenous peoples living on the island, the Nivkh, Uilta and Evenki, pursue a traditional self-sustained lifestyle and economy, living off fishing, hunting, herding and wild plant gathering. They have been suffering from the negative ecological impacts of the oil and gas projects and have been raising awareness about the environmental impacts of the two Sakhalin projects since constructions started in the late 1990s. They have inter alia documented massive herring die-offs, damages to the fishing economy, decreases of saffron cod and they are fearing damage to salmon spawning streams as well as threats to the endangered Western Pacific Grey Whale by the Sakhalin-2 activity.<br/><br/>On 20 January 2005, the indigenous peoples asked the companies to sign a memorandum which would spell out cooperation on an independent cultural impact review and provide for the establishment of a compensation fund. When the companies refused to sign the document, more protests took place and direct action was taken, which included the blockage of roads and other forms of protest. In 2005, representatives of indigenous peoples blocked more than 100 pieces of heavy machinery to protest the oil and gas projects on Sakhalin. Protests continued throughout the year and in January 2006, over 300 protesters blocked the Sakhalin Energy LNG plant, which is part of the Sakhalin-2 project. Throughout the process, indigenous peoples have shared their concern that government and administration were using intimidation techniques in order to stop people from taking part in the protests.<br/><br/>A large part of the protest campaign of local indigenous communities and international NGOs also consisted in efforts of dissuading the European Bank for Reconstruction and Development (EBRD) of investing in the Sakhalin-2 project while it was still considering to do so.<br/><br/>After years of seesaw, the EBRD finally concluded its discussions and decided not to invest in the Royal Dutch Shell operated Sakhalin-2 project in 2011, after the Russian Gazprom agreed to become a majority owner. This development was welcomed by environmentalists, who have been and still are criticizing the Dutch company's management of the oil and gas project and its risks for the environment and indigenous peoples.<br/><br/>In 2005, after pressure from the media and international campaigns by NGOs such as WWF, Greenpeace and local indigenous organizations, Shell accepted the recommendations of an Independent Scientific Review Panel set up by the International Union for Conservation of Nature (IUCN) to re-route the offshore pipelines in order to avoid whale-feeding areas. Hence, the Panel has also found Shell's measures to be lacking a solid scientific basis. Moreover, in 2006, the Western Gray Whales Advisory Panel was established together by the IUCN and Shell in order to enhance the western gray whales' protection.<br/><br/><a class="seeless" href="#">(See less)</a></div></td></tr></tbody></table></div></div><div class="horipane"><div class="title active">Basic Data</div><div class="content"><table class="table"><tbody><tr><td class="fld">Name</td><td>Sakhalin-1 and -2 oil and gas development projects, Russia</td></tr><tr><td class="fld">Country</td><td><a href="/country/russia">Russian Federation</a></td></tr><tr><td class="fld">Province</td><td>Sakhalin Oblast</td></tr><tr><td class="fld">Site</td><td>Sakhalin island, offshore and onshore</td></tr><tr><td class="fld">Accuracy of Location</td><td>HIGH local level</td></tr></tbody></table></div></div><div class="horipane"><div class="title active">Source of Conflict</div><div class="content"><table class="table"><tbody><tr><td class="fld">Type of Conflict (1st level)</td><td>Fossil Fuels and Climate Justice/Energy</td></tr><tr><td class="fld">Type of Conflict (2nd level)</td><td>Oil and gas exploration and extraction<br /> Oil and gas refining</td></tr><tr><td class="fld">Specific Commodities</td><td><a href='/commodity/crude-oil'>Crude oil</a><br /><a href='/commodity/natural-gas'>Natural Gas</a></td></tr></tbody></table></div></div><div class="horipane"><div class="title active">Project Details and Actors</div><div class="content"><table class="table"><tbody><tr><td class="fld">Project Details</td><td class="columns"><div class="less">Offshore gas and oil projects</div><a class="seemore" href="#">See more...</a><div class="more" style="display:none">Liquefied natural gas capacity: More than 10 million tonnes of liquified natural gas and 47 million barrels of oil<br/><br/>Now at its full capacity, it takes 5% of the world’s current liquefied natural gas market.<br/><br/> <br/><br/>Sakhalin 1, current oil production: 250,000 barrels / day<br/><br/>Sakhalin 2, current oil production: 395,000 barrels / day<br/><br/>Sakhalin 3, current gas production: 53 x 10^6 m^3 / day<br/><br/>The facility Sakhalin 2 also includes two 800 km onshore pipelines as well as approximately 165 km offshore pipelines.<br/><br/><a class="seeless" href="#">(See less)</a></div></td></tr><tr><td class="fld">Project Area (in hectares)</td><td>Onshore processing facility: 62,2 hectares LNG plant: 490 hectares</td></tr><tr><td class="fld">Level of Investment (in USD)</td><td>20,000,000,000 USD (original estimate of 10,000,000,000 USD was revised in 2005)</td></tr><tr><td class="fld">Type of Population</td><td>Rural</td></tr><tr><td class="fld">Potential Affected Population</td><td>Around 580,000 (population of the island)</td></tr><tr><td class="fld">Start Date</td><td>01/01/1995</td></tr><tr><td class="fld">End Date</td><td>01/01/2011</td></tr><tr><td class="fld">Company Names or State Enterprises</td><td><a href='/company/royal-dutch-shell'>Royal Dutch Shell <small>(RDS)</small></a> from <a href='/country-of-company/netherlands'><small>Netherlands</small></a><br /><a href='/company/exxonmobil-corporation'>ExxonMobil Corporation <small>(Exxon)</small></a> from <a href='/country-of-company/united-states-of-america'><small>United States of America </small></a><br /><a href='/company/exxon-neftegas-limited'>Exxon Neftegas Limited</a> from <a href='/country-of-company/russia'><small>Russian Federation</small></a></td></tr><tr><td class="fld">International and Financial Institutions</td><td><a href='/institution/ebrd'>The European Bank for Reconstruction and Development <small>(EBRD)</small></a></td></tr><tr><td class="fld">Environmental justice organisations and other supporters</td><td>World Wildlife Fund: <br/><br/>Greenpeace:<br/><br/>Russian Association of Indigenous Minority Peoples of the North (RAIPON):</td></tr></tbody></table></div></div><div class="horipane"><div class="title active">The Conflict and the Mobilization</div><div class="content"><table class="table"><tbody><tr><td class="fld">Intensity of Conflict (at highest level)</td><td>LATENT (no visible organising at the moment)</td></tr><tr><td class="fld">When did the mobilization begin</td><td>LATENT (no visible resistance)</td></tr><tr><td class="fld">Groups Mobilizing</td><td>Indigenous groups or traditional communities<br /> International ejos<br /> Local ejos<br /> Neighbours/citizens/communities<br /> Indigenous communities Nivkh, Uilta and Evenki</td></tr><tr><td class="fld">Forms of Mobilization</td><td>Blockades<br /> Official complaint letters and petitions<br /> Public campaigns<br /> Street protest/marches<br /> Occupation of buildings/public spaces</td></tr></tbody></table></div></div><div class="horipane"><div class="title active">Impacts</div><div class="content"><table class="table"><tbody><tr><td class="fld">Environmental Impacts</td><td><strong>Potential: </strong>Biodiversity loss (wildlife, agro-diversity)</td></tr><tr><td class="fld">Socio-economic Impacts</td><td><strong>Potential: </strong>Loss of livelihood, Loss of traditional knowledge/practices/cultures</td></tr></tbody></table></div></div><div class="horipane"><div class="title active">Outcome</div><div class="content"><table class="table"><tbody><tr><td class="fld">Project Status</td><td>In operation</td></tr><tr><td class="fld">Pathways for conflict outcome / response</td><td>Environmental improvements, rehabilitation/restoration of area<br /> Repression<br /> Technical solutions to improve resource supply/quality/distribution<br /> Violent targeting of activists<br /> Withdrawal of company/investment<br /> EBRD backing out of financing the Sikhalin-2 project and the re-routing of the pipelines and establishing an independent panel in order to enhance protection of the western gray whales</td></tr><tr><td class="fld">Do you consider this as a success?</td><td>Not Sure</td></tr><tr><td class="fld">Why? Explain briefly.</td><td>Small successes, like the EBRD backing out of financing the Sikhalin-2 project and the re-routing of the pipelines and establishing an independent panel in order to enhance protection of the western gray whales, have been achieved by the environmentalist movements in Sakhalin. Hence, the project has already done a lot of damage to the local flora and fauna during the past decades and is likely to continue harming the wildlife as well as the traditional lifestyle of indigenous communities in the future, as long as it is operating. The demands for a moratorium remained unheard.</td></tr></tbody></table></div></div><div class="horipane"><div class="title active">Sources and Materials</div><div class="content"><table class="table"><tbody><tr><td class="fld">References</td><td><table><tr><td><p> BRADSHAW, Michael (2003), Prospects for oil and gas exports to Northeast Asia from Siberia and the Russian Far East, with a particular focus on Sakhalin, Sibirica: Journal of Siberian Studies, 2003, Vol. 3(1), p. 64-86<br/></p></td></tr><tr><td><p> Indigenous Peoples in Sakhalin, Russia, campaign against oil extraction, 2005-2007, Global Nonviolent Action Database,<br/><a class="refanch small" href="" target="_blank">[click to view]</a></p></td></tr></table></td></tr><tr><td class="fld">Links</td><td><table><tr><td><p> Demand for Moratorium on Sakhalin-2 Marine Activity, Greenpeace, 21 September 2004,<br/><a class="refanch small" href="" target="_blank">[click to view]</a></p></td></tr><tr><td><p> Green groups welcome EBRD Sakhalin-2 pull-out, by Tom Bergin, Reuters, 12 January 2007,<br/><a class="refanch small" href=" " target="_blank">[click to view]</a></p></td></tr><tr><td><p> RUSSIA: Support the Indigenous Peoples' Protest Against Big Oil in Sakhalin, Pacific Environment, CorpWatch, 25 January 2005,<br/><a class="refanch small" href="" target="_blank">[click to view]</a></p></td></tr><tr><td><p> Indigenous People Protest LNG Project on Sakhalin, The Moscow Times, 21 January 2005,<br/><a class="refanch small" href="" target="_blank">[click to view]</a></p></td></tr><tr><td><p> Sakhalin-2 oil and gas development project, WWF.<br/><a class="refanch small" href=" " target="_blank">[click to view]</a></p></td></tr><tr><td><p> EBRD pulls out of Sakhalin-2 project, Friends of the Earth, 24 January 2008,<br/><a class="refanch small" href="" target="_blank">[click to view]</a></p></td></tr><tr><td><p> ExxonMobil starts up Sakhalin-1 Odoptu field, Oil & Gas Journal, 29 September 2010,<br/><a class="refanch small" href="" target="_blank">[click to view]</a></p></td></tr><tr><td><p> UPDATE: 1-ExxonMobil says not planning to leave Sakhalin project in Russia, Reuters, 16 May 2014,<br/><a class="refanch small" href="" target="_blank">[click to view]</a></p></td></tr><tr><td><p> Sakhalin firm ignoring whales: IUCN, The Japan Times, 22 February 2009,<br/><a class="refanch small" href="" target="_blank">[click to view]</a></p></td></tr><tr><td><p> Sakhalin 1 – Project homepage, Exxon Neftegas Limited,<br/><a class="refanch small" href="" target="_blank">[click to view]</a></p></td></tr><tr><td><p> Sakhalin 2 – an overview, Shell Global,<br/><a class="refanch small" href="" target="_blank">[click to view]</a></p></td></tr><tr><td><p> IUCN and Sakhalin Energy continue joint efforts to protect whales, IUCN, 9 January 2012, http<br/><a class="refanch small" href="://" target="_blank">[click to view]</a></p></td></tr><tr><td><p> Russia: Indigenous peoples protest against Sakhalin oil, gas projects, by Tass Staffer, originally published by Itar-Tass news agency, 21 January 2005,<br/><a class="refanch small" href=" " target="_blank">[click to view]</a></p></td></tr></table></td></tr><tr><td class="fld">Media Links</td><td><table><tr><td><p> Map of the platforms, Gazprom<br/><a class="refanch small" href="" target="_blank">[click to view]</a></p></td></tr></table></td></tr><tr><td class="fld">Other Documents</td><td><table><tr><td><p><strong>EBRD out!</strong> © Sakhalin Environment Watch<br />Source:<br/><a class="refanch small" href="" target="_blank">[click to view]</a></p></td></tr><tr><td><p><strong>A gray whale closed to the plant</strong> Source:<br />A Western Gray Whale near an oil drilling platform operated by Shell, Mitsubishi, and Matsui near Sakhalin Island. Photo by Greenpeace Russia<br/><a class="refanch small" href="" target="_blank">[click to view]</a></p></td></tr></table></td></tr></tbody></table></div></div><div class="horipane"><div class="title active">Meta Information</div><div class="content"><table class="table"><tbody><tr><td class="fld">Last update</td><td>06/05/2015</td></tr></tbody></table></div></div>