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Last Updated: Thursday, 27 October 2005, 14:25 GMT 15:25 UK
Sakhalin residents call for Shell cash
Residents of the town nearest one of the world's biggest energy projects - Shell's oil and gas operation on Sakhalin Island, in Russia's Far East - are calling for more money from the Anglo-Dutch company.

Residents of Korsakov, on the southern tip of the island, complain that they have suffered during the construction of the Liquid Natural Gas platform that forms part of the Sakhalin II project.

They say there has been massive disruption, with the town's mayor, Gunardi Zlievkov, claiming that 2,000 heavily-laden lorries pass along poor-quality roads every 24 hours.

Shell pays around $50,000 a year to lease the land for the plant. Although Mr Zlievkov conceded that they are also spending around $4.5m on developing the town, he said he did not believe this money had been spent well so far.

"We can't live under such conditions," he told BBC World Service's One Planet programme.

"It's fair to ask Shell, we're not asking for something extra, 40,000 people live in a poor condition around the big plant."


The decision on where the revenues go is not Shell's, but the Russian government's - and it has decided to take all revenues back to Moscow.

But this has not stopped the growing anger in Sakhalin being directed at Shell, which operates on the island under the name Sakhalin Energy.

Workers at Sakhalin Energy
There's going to be more development here, long-term, good employment, for an area that's suffering from depopulation
Sakhalin Energy boss Ian Craig
Viachislav Adienen and his wife Ludmilla are among those who do not like the way the island is developing.

"In the beginning, we thought it might be very good for the future," he said.

"But now, when we see what's happening all around, we're strongly against it. The dust is unbearable. Life has changed."

Life of Sakhalin has never been easy - Chekhov once described it as "one of the most depressing places in Russia."

But the island suffered severe economic decline after the collapse of the Soviet Union. As a result, many were hopeful their problems would be solved when the Sakhalin II platform development was announced.

In the capital, Yuzhno-Sakhalinsk, there has been a mini-bonanza, with new hotels and shopping centres springing up, catering to the influx of tens of thousands of construction workers.

Seven thousand people from the island have also been employed. But the vast majority of islanders say they are still yet to see any meaningful benefits.

Despite the oil and gas flowing from their island, most people still use coal to heat their homes, and struggle to make ends meet.

"We only get two hours' of water in the morning, and two hours' in the evening," said Peter Polyanin a Korsakov fisherman.

He said he was yet to see the trickle-down effect of the new plant.

"Personally, I can't see that there have been any benefits," he added.

"Life doesn't change here at all. Since Soviet times, nothing has really changed."

More development

As a result of the development, Sakhalin is now home to Russia's biggest foreign investments.

"One thing that perhaps isn't appreciated in the West is the huge potential that we have here," said Ian Craig, who manages the site on Sakhalin.

Sakhalin Energy rig
Plans are under way to develop two more platforms
"The gas that Sakhalin Energy has is enough to supply what Russia's supplying Europe with for four or five years.

"So there's going to be more development here, long-term, good employment, for an area that's suffering from depopulation. I think that's a good thing for the island."

Mr Craig conceded that it would be "difficult to argue" that everyone in Korsakov would be happy with the development.

But he pointed out that there were over 1,000 Korsakov residents employed by the plant, and he was certain this would "make a big difference to their lives."

He pointed out that over $300m had already been spent throughout Sakhalin on roads, bridges, airport improvements, ports and hospitals.

"During the construction phase, there is disruption, and it is very difficult to avoid that," he added.

"But once construction's complete, the impact on their lives will be minimal - and there will still be good, high-quality, long-term employment for them and their families, that wouldn't have been there before."

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