July 10, 2008

Environmentalists Ask Exxon to Change Sakhalin-1 Pipeline Route

MOSCOW. July 9 (Interfax) - Twelve international environmental organizations have asked Exxon Mobil, a U.S. company which operates the Sakhalin-1 project, to change the route of a pipeline that is being built under the project, Worldwide Fauna (WWF) said in a press release.

The company is planning to build the oil pipeline through the Piltun Bay, which is part of a marine reserve being set up for the gray whale.

The leading environmentalists warned the oil company that the possible death of aquatic flora and fauna during the construction of the pipeline could lead to a project delay and further costs, because in that case the Russian environmental watchdog (Rosprirodnadzor) will have every right to withdraw the state environmental experts' positive decision, which might delay the project implementation for an indefinite period.

Earlier Exxon and Rosneft (RTS: ROSN), the U.S. company's partner in the Sakhalin-1 project, stated that the oil and gas fields in the northeastern shelf of the Sakhalin island will be developed without any damage to the gray whale population.

Exxon is planning to start the construction of the oil pipeline in the 2008-2009 winter season. The company is due to get the decision of environmental experts by this fall.

The Sakhalin-1 project participants are: Exxon Neftegaz Ltd. (30%), India's ONGC (20%), Rosneft (20%) and Japan's SODECO (30%). The project involves the development of the three fields in Sakhalin's northeastern shelf: Chayvo, Odoptu, and Arkutun-Dagi.

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