Posts from ‘July, 2006’

International oil giant Shell will make its final decision on whether to invest in Phase 13 of South Pars gas field development project in 2007. Mullahs’ Managing Director of Pars Oil and Gas Company Akbar Torkan said the final investment decision (FID) on Phase 13 of South Pars gas field which pertains to Shell will be made available next year, adding that the FID on Phase 11 will also be available at the end of this year.

He said that based on talks with the managing director of Shell, the company is not going to finalize its decision on investment in Phase 13 this year, however, according to the plan, the company is expected to make its final investment decision in 2007 instead.

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EXTRACT: The market was still feeling the ramifications after Royal Dutch Shell declared force majeure on crude deliveries from Nigeria’s Bonny oilfield for this month and next. The move means contracts might not be honored during those two months.

THE ARTICLE

AFP , NEW YORK
Sunday, Jul 30, 2006,Page 10

Advertising Oil prices slumped on Friday following news of slower economic growth in the US, which prompted fears for demand in the world’s biggest consumer of energy, traders said.

New York’s main contract, light sweet crude for delivery in September, plunged US$1.30 to close at US$73.24 a barrel.

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By Gordon Jaremko,
CanWest News Service

EDMONTON — Alberta’s youngest oilsands mega-mine set out Friday to grow briskly by 65 per cent even though expansion costs have skyrocketed.

About 6,000 to 7,000 construction workers will build a 100,000-barrels-a-day addition to the Athabasca Oil Sands Project over the next four years on a schedule laid out by senior partner Shell Canada. The giant job will be divided equally between the three-year-old operation’s Fort McMurray open-pit mine and Scotford bitumen upgrader east of Edmonton, Shell president Clive Mather and oilsands vice-president Brian Straub told a conference call for financial analysts and media.

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Nick Mathiason
Sunday July 30, 2006

The Shell-owned consortium behind the $20bn oil and gas project in Sakhalin off the east coast of Russia is seeking UK taxpayers’ money to help pay for the scheme, even though it is based in the tax haven of Bermuda.

Campaigners are demanding the Export Credits Guarantee Department deny funds to Sakhalin Energy. James Leaton of WWF said: ‘ECGD was set up to promote UK exports. Less than 5 per cent of the project is British and it is already 75 per cent complete. It is unacceptable that taxpayers’ money is being spent to endorse projects based in a tax haven that contribute to climate change.’

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30 July 2006 
By Richard Curran

The growing momentum to solve the issues over the Corrib gas field might see the multi-billion-euro project actually move forward sometime soon. The publication of the report by the mediator in the dispute, Peter Cassells, into finding a solution may not in itself fix the problems but it is another step in the direction of finally landing new Irish gas on Irish shores.

At a time when gas prices for consumers and businesses are set to rise again, progress on Corrib couldn’t be more welcome. But pumping Corrib gas into Irish homes will not necessarily be the panacea that many might think.

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July 30, 2006
Stephen O’Brien
 
SHELL is to announce within two weeks that it is prepared to reroute the Corrib gas pipeline in Mayo, in an attempt to end the local protests that have stymied the €900m project.

The state-owned Bord Gais is expected to become involved in the selection of a new route when it joins forces with Shell in the project. 
 
The rerouting is likely to involve moving the pipeline about 200 metres from local homes. The nearest house to the current route across the Rossport peninsula is 70 metres away.

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EXTRACT: Last November Total began to expand its deepwater Gulf of Mexico position in a “like kind” exchange with Shell Exploration & Production. Under the agreement, Total would convey its interests in four onshore fields in South Texas for Shell’s 17 percent interest in the deepwater Tahiti field, among the largest finds in the Gulf of Mexico.

THE ARTICLE

Both Hess Pony, Total Alaminos Canyon discoveries are oil; sidetrack planned on Hess acreage; Total well confirms structure

Ray Tyson
For Petroleum News
Headline: Total, Hess confirm deepwater Gulf finds

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EXRACT: Shell a target?: According to Britain’s Financial Times and other publications, Browne had an even bigger transformation up his sleeve — a merger with arch-rival Shell. Just how serious that plan ever became isn’t clear. It appears the idea was brought up to Shell leaders in the second half of 2005 and didn’t gain much traction.

Admired CEO will take another job as he’s ‘absolutely hooked on business’

Allen Baker
For Petroleum News

John Browne’s recent announcement that he plans to step down as BP CEO at the end of 2008 came amid a flurry of rumor and speculation. There were reports he had hoped to escape the company’s mandatory retirement policies and stay on past the age of 60. In point of fact, he has managed to escape that policy to some extent, since he’ll turn 60 in February of 2008, 10 months before his planned departure.

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By Gary Park

Imperial Oil-ExxonMobil Canada, a Shell Canada-led partnership and Husky Energy are pushing ahead with various aspects of large-scale oil sands projects, taking the high road during a time of accumulating negatives.

The joint effort by the ExxonMobil sister companies involves the 300,000 barrel per day Kearl project that carries an initial cost projections of C$4.5 to C$6.5 billion to recover 4.41 billion barrels of bitumen over 50 years, is ready to enter the regulatory approval stream.

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Guest 2770: 28 July 2006

Shell Shocked: “This company has been losing ground now for many years, and I don’t like that,” says Jeroen van der Veer, the 58-year-old chief executive. “I didn’t see the reserves crisis as something isolated–no, I think the whole company was losing ground. We knew it, but we kept on doing more of the same.”

Any other minion who knew he was losing ground but still continued in same fashion would have been sacked. Why does he not step down himself and admit he was not up to the task? Or does he like the status and is convinced the others are even worse? With bright micromanagers like Brinded around he may well be right. And not being in control may increase the chance of having to go to jail?

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By CLIFFORD KRAUSS
Published: July 29, 2006

Chevron reported yesterday that its second-quarter earnings climbed by 18 percent, marking the company’s highest profit for any three-month period. But the results paled next to the earnings announced this week by other large oil companies, and Chevron’s stock price dropped substantially on a day when American markets otherwise soared.

Like Exxon Mobil, Shell, BP and ConocoPhillips, who have all reported a banquet of riches in recent days, Chevron said that it had been profiting from the rising price of oil, which is now more than $70 a barrel, and strong refining margins.

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Published: Jul 28, 2006

THE High Court has reserved judgment in a multi-million claim for damages by a county council against energy giant Shell.

The legal action followed the leakage of petroleum products from a Shell petrol station which halted construction of new civic offices in Trim, Co Meath.

Damages estimated at between 5m-6m are being sought by the Meath Co Council after a hydrocarbon discharge in 2001 from a petrol station owned by Irish Shell Ltd at Watergate Street, Trim, contaminated an adjoining site previously used as a car park for the local swimming pool.

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By: Lorna Siggins, Irish Times
Published: Jul 29, 2006

Shell E&P Ireland has said that the Corrib gas partners will “respond positively and in full” to the report on the Corrib gas pipeline published yesterday by Government mediator Peter Cassells.

In its strongest indication yet that it would review the high-pressure pipeline’s onshore route, the company has welcomed the publication of the mediator’s “detailed and thorough” document. However, it says that it needs to consider a number of its recommendations.

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EXTRACT:  Meanwhile, Shell is in talks with the Securities and Exchange Commission about whether reserves held in gas-to-liquids projects should be booked under the regulator’s rules, Chief Executive Jeroen van der Veer said Thursday. The issue of booking is sensitive for Shell, which was forced to restate reserves fives times in 2004 and 2005. 

Net Tops $10 Billion, a Gain
That Could Intensify Anger
About High Prices at Pump
By JEFFREY BALL and BENOÎT FAUCON
July 28, 2006; Page A2

Exxon Mobil Corp. reported its second-highest quarterly profit ever, a result likely to intensify political anger at the oil industry at a time when many U.S. consumers are paying more than $3 a gallon for gasoline.

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THE WALL STREET JOURNAL ONLINE

Crude-oil futures tumbled by more than $1 a barrel, settling at $73.20 on the New York Mercantile Exchange, on renewed hopes of a resolution of the violence in the Middle East. Here is Friday’s roundup of energy-related news:

* * *
CHEVRON’S MISS: Chevron did its part to dissipate some of the public rage being directed at Big Oil these days, reporting — get this — disappointing quarterly earnings. Not that a $4.35 billion profit, on $53.54 billion in revenue, is anything to sneeze at. But Wall Street analysts, on average, expected a little more from Chevron’s earnings per share, and its stock fell 2.5%. A big expense to repair equipment damaged by last year’s hurricanes hurt results.

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By Andy Critchlow & Stephen Voss

DUBAI: Royal Dutch Shell, Europe’s second-biggest oil company, yesterday said the Pearl GTL project may cost as much as $18bn, triple earlier estimates.

The project will cost $4 to $6 per barrel of oil equivalent to produce, The Hague-based Shell said yesterday in a statement. The venture is expected to produce the equivalent of 3bn barrels of oil during its lifetime, the company said in a separate statement.

Oil and gas project costs are climbing amid shortages of equipment, labour and raw materials such as steel. A year ago, Shell said costs for its Sakhalin II venture in Russia’s Far East doubled to $20bn. Shell yesterday cut its 2006 output target.

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Jul. 29, 2006. 01:00 AM

CALGARY—Shell Canada Ltd. aims to proceed with expanding its oil sands mining operation despite surging costs, and has given its partners 90 days to respond to its proposal, it said yesterday.

Shell Canada, which owns 60 per cent of the Athabasca Oil Sands Project, said it believes boosting the production to 255,000 barrels a day from the current 155,000 could cost between $10 billion and $12.8 billion.

That is up from last year’s $7 billion estimate, with the huge increase driven by a squeeze on labour and materials supplies in Alberta’s heavy construction boom.

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• British Nuclear Fuels, the UK government’s nuclear services company, stopped production at Unit 4 of its Wylfa nuclear plant.

• Interconnector (UK), owner of a natural gas pipeline linking England and Belgium, will export the fuel from mainland Europe into the UK starting tomorrow to meet demand.

• Royal Dutch Shell, Europe’s second largest oil company, may reroute a proposed gas pipeline in western Ireland to end an impasse over a facility that could meet almost two-thirds of the country’s gas needs.

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Shell said the provision was in connection with the putative shareholder class actions filed in the United States District Court for the District of New Jersey.

A Shell spokeswoman said the class actions were two separate action filed in the U.S. on behalf of foreign and U.S. shareholders.

In January, Stichting Pensioenfonds ABP and 25 other Dutch public pension funds filed a complaint seeking hundreds of millions of dollars in the U.S. from Shell following the reserves restatments.

A separate consolidated class action had already been filed in 2004, led by Pennsylvania State retirement funds.

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July 28 (Bloomberg) — Shell Canada Ltd., the country’s fourth-largest oil company, said costs to expand an oil-sands venture will rise 75 percent to as much as C$12.8 billion ($11.3 billion) on higher equipment and labor costs.

A boom in oil-sands projects in Alberta has raised all facets of expanding the Athabasca Oil Sands Project, in which the company owns 60 percent, Shell Canada said today in a statement. The revised estimate includes additional spending to boost efficiency and lower operating costs, Chief Executive Officer Clive Mather said today during a conference call.

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ROYAL Dutch Shell has set aside £269 million in an attempt to settle a massive lawsuit in America.

The class action relates to the reserves scandal that rocked the company two years ago.
A settlement would finally draw a line under the debacle, when the company admitted 3.9 billion barrels of oil had been overbooked.

It would leave all the major legal actions resolved in the United States and only one – a separate European lawsuit – still outstanding.

Profits

Chief executive Jeroen van der Veer said Shell still doesn’t admit liability for overbooking the reserves, and legal talks will have to continue.

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Rising prices help oil giants pump out massive profits Royal Dutch Shell earnings soar to £3.4bn.

Exxon makes history as revenues exceed $1bn a day

By Gary Parkinson, City Editor
Published: 28 July 2006

Two of the world’s biggest oil companies posted massive profits yesterday on the back of soaring oil prices, making $16bn (£8.6bn) between them in just three months.

At $6.3bn (£3.4bn), Royal Dutch Shell’s underlying profits for the three months to the end of June were 36 per cent higher than over the same period last year, despite serious disruption to production in Nigeria.

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Fri Jul 28, 2006 2:32 PM GMT
 
ABUJA (Reuters) – The Nigerian arm of Royal Dutch Shell has started work on repairing a pipeline where a leak has forced the shutdown of 210,000 barrels per day (bpd) in oil output, a spokesman said on Friday.

Shell is losing 180,000 bpd because of the leak discovered a week ago in a section of its Nembe Creek trunk line in Rivers state in the Niger Delta, while Chevron is losing 30,000 bpd that should be going through the same pipeline.

“We are going ahead with repairs at this time,” a Shell spokesman said, adding that the firm could not tell how long the repairs might take.

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A laugh for the weekend…

For adults only

Malcolm Brinded spoof

KEITH FINDLAY

27 July 2006
 
A Union leader yesterday called for a thorough inquiry into the role of the Health and Safety Executive (HSE) on North Sea oil and gas platforms.

Graham Tran, regional officer for Amicus, claimed the HSE had neither the resources nor the independence it needed to improve and police safety offshore.

He was speaking as representatives from the TGWU, RMT and OILC unions met a top HSE official to raise their general concerns about safety following the conclusion last week of a fatal accident inquiry into the deaths of two men on Shell’s Brent Bravo platform almost three years ago.

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Trade unions have held a meeting with health and safety officials in Aberdeen to discuss concerns about the offshore industry.

The talks followed a report into the deaths of two workers on Shell’s Brent Bravo platform in which a sheriff criticised the company.

The Oil Industry Liaison Committee, Transport and General Workers Union and the National Union of Rail, Maritime and Transport Workers raised a number of issues at the meeting with the Health and Safety Executive.

They called for more independent offshore inspections, a stricter enforcement of improvement orders on install- ations and greater consultation with workers.

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MENAFN – 28/07/2006  
  
(MENAFN) Qatar Petroleum and Royal Dutch Shell announced they would proceed with the Pearl gas-to-liquids (GTL) project, an integrated development, transport and processing hub for Qatar North Field gas resources, Gulf News reported.

Just months ago the status of the project was cast in doubt amid rising costs worldwide for oil and gas projects, due to shortages of equipment, labour and raw materials such as steel.

The Pearl GTL project may cost as much as $18 billion, triple earlier estimates, based on company-supplied figures.

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28/07/2006 – 08:34:04 

The man appointed by the Government to mediate between Shell and the Rossport Five has recommended that the Corrib gas pipeline be re-routed.

Former trade union leader Peter Cassells was appointed in an effort to find a solution to the long-running dispute, which saw the five Co Mayo men spend more than 90 days in prison last year for refusing to obey an injunction ordering them not to obstruct work on the pipeline.

Earlier this month, he said his talks had failed to find any common ground between the two sides.

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28 July 2006

Doing well: The oil giant’s rising fortunes have been prompted by the soaring price of crude

By Brian O’Connor
 
ROYAL Dutch Shell put a £270m price on settling a US legal action over the reserves scandal two years ago.

This is just an accounting provision, but signals its readiness to sort out the last remaining big lawsuit.

The provision is just a week’s profits for the oil giant, which made a record £3.4bn in the quarter to June, up 36pc, though its oil and gas production tumbled 13pc.

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Jim Armitage,
28 July 2005

SHELL’S profits surged by more than a third in the first half of the year, thanks to record oil prices.

With crude currently hovering around $60 a barrel, the company enjoyed profits of $10.2bn (£5.8bn) – up 39% on the same period last year. Shell is not alone in enjoying a big boost to earnings on the back of rampant oil prices. BP said earlier this week it made £6bn in its half-year.

Shell is attempting to win back investor confidence following the scandal last year when it was found to have been grossly exaggerating the amount of oil it had in reserves, waiting to be pumped out of the ground. Today it stressed it would be spending $1.8bn a year for the next two years in its hunt for new reserves.

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From “Live Chat” 28 July 2006:

EXTRACT: “Production down, reserves down, merger rumours, white elephants in Qatar, and expropriation of Sakhalin…are we witnessing the death throes of Shell? ”

THE ARTICLE

Extract from “Live Chat” posted on Thursday 27 July 2006

RoyalDutchShellPlc : We can see that people are getting hooked on this site. When is someone going to make a positive posting about Shell? We haven’t seen one yet!

guest_6780 : Positive: company actually admits that will cancel/postpone some projects if costs are too high!

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We recently became aware from Shell insiders of a treasure trove of emails from a former, highly respected senior Shell manager, “Hans” Bouman”. His emails have been widely circulated as collector items by Shell insiders because of their outspoken, prophetic and eloquent content, often on controversial subjects.

Printed below is one kindly supplied to us a few minutes ago by a Shell insider. As you will see, it fully meets the above description. It was sent to Malcolm Brinded during the darkest days of the crisis which arose from the reserves fraud – from which Shell management has clearly not recovered.

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