The Sakhalin Times

Around 200 protestors rallied in front of the Japanese Consulate General in Yuzhno-Sakhalinsk on February 7 to hand over a list with three demands to the Japanese Consul General, Yoshihisa Kuroda. The protestors held banners saying “Yes to friendship, no to handing over the islands”, “Russia’s borders are washed away with the blood of our fathers and grandfathers” and “Russian youth knows the borders of its motherland”, some both in Russian and Japanese.

Representatives of regional departments of major Russian political parties, the Sakhalin Cossack military unit and youth supported the protest action.

The protesters demanded Japan to cancel the so-called ‘Northern Territories Day’, which is celebrated in Japan on February 7. This date was set by the Japanese parliament in 1981 to celebrate the first Russo-Japanese Treaty of 1855, the Treaty of Shimoda. According to this treaty the islands Iturup, Kunashir, Shikotan the Habomai islet group are in Japanese possession. The protestors claimed the holiday to be “infringing upon Russian sovereignty and abusive to the victims of Japanese militarism”.

At a government-sponsored rally in Japan marking ‘Northern Territories Day’, Japanese Prime Minister Junichiro Koizumi renewed his country’s call that Russia should return the islands, the Associated Press reported.

The second demand was for Japan “to stop the production, contraband and distribution of maps depicting the Kuril Islands as Japanese territory”.

The third demand concerned the return of gold reserves worth 80 billion dollars to Russia, which was supposedly stored at Japanese State banks at the beginning of the twentieth century.

Japanese Consul General Yoshihisa Kuroda refused to accept the list with demands.

The protestors claim to file a case against Japan at the International Court of Justice if Japan does not comply with the demands.

Recently, 50 Cossack families settled down on the Kuril Islands of Kunashir, Shikotan and Iturup to help the islands develop. Another 72 families are planning to move there within the next five to seven years, reported Leonid Sapronov, the head of Sakhalin Cossack military unit, which amounts to approximately 3,500 people on Sakhalin. “The Cossacks have always been pioneers in Russia, they considerably expanded the territory of Russia,” Sapronov commented.

The Russian Far Eastern coalition of environmental organisations ‘Living Sea’ launched an Internet campaign to save the Western Gray Whale on February 10. The Internet site calls on Russian citizens to send letters to Russian President Vladimir Putin, the Russian government, the Natural Resources Ministry and Sakhalin Governor Igor Farkhutdinov “to introduce some important changes to the oil and gas projects that will not considerably affect the implementation of the projects, but will give the gray whales a chance to survive”.

The launch of the campaign ‘Internet in defence of gray whales’ came ten days after Sakhalin-2 operator Sakhalin Energy announced it would invest 5 million dollars to an expanded grey whale research programme that will go beyond Sakhalin to Korea, Japan and China.

Sakhalin Energy CEO Steve McVeigh on January 30 at a press conference in Moscow explained the details of the programme. An independent council comprising Sakhalin Energy, whale specialists, representatives of the regional government and other contributors would administer the research programme. Sakhalin Energy is working in partnership with VNIRO (Russian Research Institute of Fisheries and Oceanography) in setting up the programme.

The aim of the research is to find out about the entire life cycle of the western gray whales. The results will be subject to peer review by independent specialists will be publicly available, McVeigh said.

Nevertheless, the environmentalists said in their press release on February 10 they think the money is nothing but “a screen for continuing the Sakhalin-2 project in a cheap and environmentally dangerous way”. They added that it is good that the oil and gas company finances the survey, but that it would not help these unique endangered mammals to survive. “Even if the company would transfer 25 million dollars for the gray whale survey, it will not change the fate of the population until Sakhalin Energy changes its plans for constructing a pipeline over the whales’ feeding area,” the head of Sakhalin Environmental Watch, Dimitry Lisitsyn, commented.

The starting date of the campaign is linked to ‘International Whale Day’ on February 19. The website http://www.orca.krsk.ru/whale gives information about the Sakhalin population of approximately 100 grey whales. On their website the environmentalists blame Sakhalin oil and gas companies for creating conditions that have an adverse effect on the feeding and reproduction of the whales. In 1999, environmentalists first registered ten skinny whales; by 2000 this number has increased up to 27 species.

Environmentalists foresee more danger for the gray whales population in the future as “Exxon Neftegas Limited is planning to pierce through Piltun Bay, the centre of the gray whales’ feeding area, and Sakhalin Energy intends to lay four oil and gas pipelines over the southern part of the feeding area and to install a new platform closer to the area than Molikpaq”. In their press release they write: “We consider it immoral of Sakhalin Energy to spent money for the survey and at the same time to plan the pipeline lying over the feeding area of the whales. To give whales a chance to survive, the company must change the location of the pipelines and the new platform.” They stressed that in order to decrease the danger for the whale population it is enough to introduce changes to the project, not to shut it down.

British energy group BP on February 11 announced it had agreed in principle with its Russian partners Alfa Group and Access-Renova (AAR) to combine their interests in Russia to create the country’s third biggest oil and gas business, in which they will each have a 50 per cent stake.

The new company will incorporate TNK and Sidanco, which, between them, produce approximately 1.2 million barrels of oil a day.

It will also own significant exploration interests in Siberia and Sakhalin, together with a major downstream business that includes interests in five refineries and a retail network of more than 2,100 sites in Russia and the Ukraine.

For its 50 per cent stake in the new company BP will pay AAR 3 billion dollars in cash on completion of the deal and three subsequent annual tranches of 1.25 billion dollars in BP shares, valued at market prices prior to each annual payment.

The transaction, which will be effective from 1 January 2003, is scheduled for completion in the summer.

Russian Transportation Minister Sergey Frank announced his ministry is giving priority to the development of the transportation infrastructure on Sakhalin. “We cannot allow Sakhalin’s undeveloped transport infrastructure to become a restraining factor for the development of Sakhalin oil and gas projects,” Frank said at a press conference on February 11 after a meeting with the Sakhalin administration.

The transportation minister said he expected to sign a cooperation plan with the regional administration by February 16. By that time, he would also announce how much the ministry is going to spend on the modernisation of the transportation infrastructure, but he could already say millions of roubles would be spent for this purpose.

Tokyo Gas, the world’s No. 3 liquefied natural gas (LNG) buyer, may become Sakhalin Energy’s first LNG customer. Tokyo Gas spokesman Yoichi Shibata said by the middle of this year, the company may sign a contract to buy 1 million metric tons a year beginning as early as 2007, Bloomberg reported on February 2.

The contract would be the first major agreement of the Sakhalin Energy consortium - which includes operator Royal/Dutch Shell and the Japanese trading companies Mitsui and Mitsubishi - with a Japanese company. Japanese media quoted analysts as saying the deal would boost the commercial viability of the Sakhalin-2 project and could trigger agreements with other Japanese companies.

“It’s good news for Shell and other investors in Sakhalin,” Bloomberg quoted Toshinori Ito, an energy analyst at UBS Warburg Japan. Tokyo Gas probably got a competitive price compared with other suppliers “or else they would not have chosen Sakhalin. Tokyo Gas has strong bargaining power”.

Japan, the world’s biggest LNG buyer and No. 2 oil user, plans to reduce the risk of supply disruptions from the politically unstable Middle East, which supplied more than 80 percent of the country’s oil last year, Bloomberg wrote.

The Sakhalin gas fields provide the nearest alternative source of fuel in the form of cleaner-burning gas, Bloomberg quoted analysts.

Tokyo Gas currently purchases 7.5 million tons of LNG annually from producers in Alaska, Malaysia, Brunei, Indonesia, Qatar and Australia.

A string of new LNG projects in the Asia-Pacific region may lead to a glut of the fuel starting in 2005 and lead to a drop in prices, said Ito at UBS Warburg. The development of the Sakhalin project will add to the supply glut, he said, Bloomberg wrote.

The competition may become more intense in coming years as Japan’s demand is unlikely to grow before the end of this decade, Shigeru Muraki, Tokyo Gas’ general manager of gas resources said in an interview last year according to Bloomberg.

Criminal groups in Russia have tried to introduce 61 infiltrators into customs bodies in 2002, the press secretary of the Sakhalin customs, Yuri Gurshal, reported. Security departments screened 12,000 applicants for a job in the customs and refused 380.

In 201 cases, customs officers violated customs laws in 2002. Almost all cases were brought to court, Gurshal said.

The US Consulate General in Vladivostok issued a warden message for American citizens on Sakhalin on February 11. The aim was to remind US citizens of the need to remain vigilant due to a heightened threat of terrorist actions that may target civilians, including the possibility of attacks by non-conventional weapons. It also reminded American citizens travelling or living overseas to avoid demonstrations and provided standard preparedness advice. The Consulate General said that the worldwide caution would expire on 4 May 2003.

The Sakhalin railroad, by order of the Russian Railway Ministry, is preparing to adjust the narrow gauge on Sakhalin (1067mm) to the Russian mainland standard gauge (1520m), the press office of Sakhalin railroad reported. A survey of the work must be completed by May 30 and a feasibility study should be ready by 15 December 2003. The cost of the feasibility study and design works is estimated at 4.7 million dollars.

A law banning the sale of alcohol within 100 metres of kindergartens, schools, universities, churches and hospitals on Sakhalin came into force on January 10, the press office of the Sakhalin Duma reported. Alcohol sale was also banned at airports, railway stations and military units. However local administrations have the right to allow the sale of alcohol in some establishments within the 100-metre area, the press office wrote.

The price of a bus ticket in public buses in Yuzhno-Sakhalinsk will not be increased, the city transportation department reported. The current price of 7 roubles for a bus ticket will be raised to 10 roubles only in ‘public taxis’ - mini-buses for 10 to 14 people with a taxi sign on the roof. Hundred-fifty of the 350 buses operating in Yuzhno-Sakhalinsk currently have the status of public taxis, TIA Ostrova reported.

The price increase for public taxis will come into force on February 17, the transportation department said.

Employees of Poronaisk central hospital threatened to go on strike on January 27 demanding two-month back wages, TIA Ostrova reported. The hospital administration persuaded the doctors not to go on strike and promised to solve the financial problems as soon as possible. The doctors received 40 percent of their salaries after a visit of the head of the Poronaisk administration, Gennady Babchenko, TIA Ostrova wrote.

The Sakhalin customs meets less than one third of the requirements for providing services to the oil and gas projects operating under the Production Sharing Agreements (PSAs), the head of Sakhalin customs, Vyacheslav Goloskokov, reported. He said the Sakhalin customs might become an obstacle for the development of the oil and gas projects if the personnel management is improved and the information technology is not modernized.

Goloskokov said the Sakhalin customs lack offices and 60 percent of its computers cannot handle the information it has to process. A possible solution to the problem is the implementation of a computer registration system for cargo of the oil and gas companies and installation of new software in 2003 to process large amounts of customs declarations.

The head of the Sakhalin customs noted cargo traffic connected with the Sakhalin-1 project had grown considerably in 2002. He mentioned the difficulty was that the cargo arrived in Chayvo, where the customs infrastructure is not developed. The cargo documents were issued in Yuzhno-Sakhalinsk and customs officers working in shifts examined the cargo in Chayvo, Goloskokov reported.

In 2003, cargo traffic is expected to rise 1.5 times due to transportation of goods for the LNG-plant construction in Prigorodnoye, Goloskokov said.

The telecommunication company Dalsvyaz reported that it had completed laying fibre optic cable between Yuzhno-Sakhalinsk and its suburbs Lugovoye and Novo-Aleksandrovsk at the beginning of February. The modernisation took about six months and cost 6.2 million roubles (about 195 thousand dollars). Dalsvyaz said it would considerably decrease the overload of the telephone network and improve the quality of the connection.

“Well-trained, highly skilled and dedicated.” That is how Harry Samuels, regional coordinator of the ‘English Language Fellow Program’, describes Russian English teachers. The Vladivostok based coordinator came to Yuzhno-Sakhalinsk in the beginning of February to give several seminars and workshops to English teachers working in Sakhalin schools and universities. The aim of the seminars was to teach the teachers to adjust the language use to the audience, to make an effective presentation, how to structure it and how to use visual aids and the Internet effectively.

Samuels is one of ten teachers travelling around Russia within the framework of the English language fellow programme, which is implemented by the Public Affairs Section of the US Embassy in Moscow.