sakhalin resources

EBRD pulls out of finanancing controversial Sakhalin II project

The EBRD claims that changes to the shareholders and the structure of the company mean that it is not feasible for the EBRD to pursue the current project.

There has been much resistance to the controversial $20 billion project; Friends of the Earth International activists in Japan and England, Wales & Northern Ireland have been campaigning against EBRD financing for several years.

Sakhalin II is:

• The biggest integrated oil and gas project that includes the biggest LNG processing facilities ever built;
• The third largest Project Finance deal ever undertaken, and by far the largest ever undertaken in the oil and gas sector;
• Plagued with two billion dollars in cost overruns.

The Western Grey Whale population off Sakhalin Island is under threat by a the proposed construction of a series of oil pipelines, to be built by Shell and financed by a number of UK financial institutions. image: Sakhalin Environment Watch

The Sakhalin II project:

• Threatens the world's most critically endangered population of grey whale with extinction through proposed off-shore platforms adjacent to, and undersea pipelines trenched directly through, the whales' feeding habitat;
• Threatens abundant wild salmon-bearing streams (the Russian Far East has 1/3 of the world's remaining wild salmon stocks) by trenching pipelines directly through stream beds and by burying pipelines underground in this highly seismic area;
• Threatens wildlife and endangered species through habitat destruction;
• Threatens the fisheries-rich Aniva Bay through the dumping of industrial wastes and run-off;
• Poses the potential of a catastrophic oil spill not unlike the Exxon Valdez.

A recent report produced by CEE Bankwatch and GenderAction showed that along with the terrible environmental impacts, Sakhalin II has led to increased prostitution human trafficking and HIV/AIDS.