Shell vs.The Environment & The Public Trust

The Public has a Right to the Truth - Officials have a Duty to Act
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Shell Loses Fifty to a Hundred Billion Dollars or More
Russia Uses the Power of the Internet
Shell recently said that "there were no legal grounds for Russia's resources ministry to cancel environmental approval for Sakhalin 2." There would not have been any legal grounds had Shell realized the power of the internet in the hands of someone Shell antagonized (go here). Had the "legal grounds" regarding environmental breaches not been leaked, Shell would not have had to capitulate. Dow Jones announced today (12-21-06) that Shell settled the Sakhalin-2 project environmental problem with Russia, by giving up control of the project and half of Shell's entire future revenue stream for less than half of Shell's development costs. "The Sakhalin Energy consortium, led by Shell, agreed to sell a 50% stake plus one share in Sakhalin-2, the world's largest integrated oil and gas project, to Russian gas monopoly OAO Gazprom for $7.45 billion" - Dow Jones. That "one share" is Shell's loss of financial control. Russia will now pay Shell instead of Shell paying Russia on a project Shell engineered, built and controlled until today. 
 
Shell Oil obviously does not realize the power of spreading information for free on a website. In this case Royaldutchshellplc.com. "On 18 October 2006, the Donovans published an article confirming they had for some time been supplying information to the Russian government relating to Sakhalin II. Information in the form of Shell internal emails and Shell insider comments, posted on the “Live Chat facility on the website, were passed by the Donovan's to Oleg Mitvol, the Deputy Head of Rosprirodnadzor, the Russian Environmental Agency. The information revealed alleged potentially calamitous flaws. The revelations came at a difficult time for Shell in view of the strong objections voiced by President Putin to spiraling project construction costs which have increased from $10 billion, to reportedly $28 billion. The website provided a conduit for the potentially important information which might not otherwise have reached the Russian Environmental Agency. In November 2006, Oleg Mitvol confirmed in an interview published in "This Week in Argus FSU Energy", that the evidence on which a prosecution against Sakhalin Energy claiming $10 billion in damages is being mounted, was supplied by John Donovan of royaldutchshellplc.com. Mr Mitvol is quoted as saying: "Who will take Sakhalin Energy to court? I will take them. I have documents proving that the Sakhalin Energy management was aware that the company violated technical standards, but carried on trying to meet project deadlines and refused to stop work. I am confident of winning my case in Stockholm. What documents are these? Where are they from? I have email correspondence between executives in Sakhalin Energy management from 2002. I received these letters from John Donovan, owner of the anti-Shell website http://royaldutchshellplc.com/." - for more info go to Wikipedia. For a collection of environmental articles on Sakhalin II go here. 
 
SeeitReal.com
Shell allowed a simple squabble to grow into a free website that helped cost Shell control of the World's largest oil and gas project, and lose half or more of the expected revenue from that endeavor. Money down the drain (more here). The Shell management that made the mistake, over Royaldutchshellplc.com, no longer work for Shell. If Shell is to make that same mistake over SeeitReal.com revealing information about the Texaco problem and Shell's dumping of its retail environmental responsibilities in the U.S. (see About Us), it is Shell's President David Sexton who will have made that mistake (see Shell Oil Company). It would make infinitely more sense for Shell to handle this matter early (see Living Website) than to let it get out of control as it did with Royaldutchshellplc.com (Shell funded them by settling a libel claim for over $585,000 plus costs). Unlike Royaldutchshellplc.com, no one is angry at SeeitReal.com and there are no outstanding legal issues between us. SeeitReal.com just wants Shell to do the right thing and clean the Texaco problem without Shell failing tests in a bad faith attempt to hide it. Given the stakes, is cooperation too much to ask?
Why the Environmental Issue Was So Important
Here's the economic analysis of the contractual "rope" Shell used to hang itself with cost overruns on Sakhalin 2. And here's why Russia needed the environmental information the website Royaldutchshellplc.com provided them. Given the nature of the PSA (Petroleum Sharing Agreement), environmental issues were the only way Russia could break the contract: sakhalinenergy.com/docs/media/en/194/FT_22-11-06_en_no map.doc [We are informed and believe, Shell had this document deleted after seeing it referenced here, but the original article is available here or a pdf here.]  So will the loss of billions wake Shell up to the fact that in the internet age Shell can no longer hide the truth the way Shell used to? As Royaldutchshellplc.com contributed to billions lost on Sakhalin2, SeeitReal.com is confident it contributed to the timing and amount of the $6.5 million dollar settlement in Riverside County (see Recent Settlement) and that it can eventually do more (see Pattern of Avoidance).