Russia accuses Total of environmental violations

23rd January 2007, Comments 0 comments

MOSCOW, Jan 22, 2007 (AFP) - Russian authorities on Monday accused the French oil group Total of violating the country's environmental regulations in its exploitation of a major energy field in the north of the country.

MOSCOW, Jan 22, 2007 (AFP) - Russian authorities on Monday accused the French oil group Total of violating the country's environmental regulations in its exploitation of a major energy field in the north of the country.

"There are important ecological violations in the activity of the Total company," the head of Russia's audit court Sergey Stepashin said, quoted by Interfax news agency.

He also said the French firm had not respected the deadlines it had agreed to and that the oil it was pumping from the Kharyaga field had not reached the expected amount.

"This has cut into the revenues of the budget of the Russian Federation on dfferent levels," Stepashin said, adding that the deal Total signed for the Kharyaga field was "disadvantageous" for Russia.

The move fits a pattern of Russian government pressure on foreign oil companies that signed production sharing agreements (PSAs) with the Russian state in the 1990s.

Total is one such company, as well as Exxon of the United States and Anglo-Dutch group Shell.

The PSAs were agreed at a time of low global oil prices and a period of weak Russian government. Moscow now sees the agreements as outdated and unfavourable to the Russian state.

Critics say that Moscow is using environmental regulations to force foreign companies to accept greater Russian participation in their projects.

The Kharyaga field currently produces around 20,000 barrels per day and has been the object of bitter dispute for years, with the Russian government accusing Total of excessive delays in completing the project.

Total controls 50 percent of the field, the Norwegian group Hydro 40 percent and local authorities 10 percent.

Copyright AFP

Subject: French News

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