WWF Warns EBRD Against Loans to Sakhalin Project

GENEVA - The European Bank for Reconstruction and Development (EBRD) should not make loans to Shell's giant energy project off Russia's Pacific coast without more measures to protect the environment, WWF said on Friday.

The conservation group said ice and poor weather around the proposed Sakhalin oil and gas operation would make it nearly impossible to clean up any spills for half of the year, placing marine life at risk in the case of an accident.

"This is the most difficult place on earth to have to respond to an oil spill," Paul Steele, WWF International's chief operating officer said in a report.

"Wave heights in spring and winter are often five times higher than current recovery methods can cope with," he said.

The EBRD's board is expected to vote in June on whether to approve a US0 million loan to support the Royal Dutch Shell Plc-led Sakhalin-2 project, which has drawn heavy criticism from green groups.

The massive oil and gas fields off the north coast of Sakhalin Island are located near the feeding grounds of the critically endangered Western Grey whale.

Shell and its partners Japan's Mitsui and Mitsubishi say they are working to safeguard the species.

Their Sakhalin Energy consortium spent about US million on whale research from 1997 to 2005 and agreed last year to reroute offshore pipelines.

WWF, formerly known as the World Wildlife Fund, urged the European development bank to be cautious in its involvement in the US billion project.

"The EBRD cannot agree to fund this project whilst remaining consistent with its environmental values and maintain its credibility," Steele said. "If it goes ahead and funds Sakhalin, its environmental reputation will be heavily tarnished."

Story Date: 28/4/2006