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Posts from ‘August, 2006’

KBTV4: Motiva Refinery Back Up After Power Loss

( Air Date: 8/31/2006 )

Shell Oil Company said Thursday its 285,000 barrel-per-day joint-venture refinery in Port Arthur, was back up after losing power Wednesday.

The plant, owned by Motiva, a joint venture between Royal Dutch Shell`s (RDSa.L: Quote, Profile, Research) Shell Oil and Saudi Refining, suffered a power outage for a short time after a lightning storm early Wednesday morning, a company spokesman wrote in an e-mail.

However, the units were restarted “promptly” and the refinery was “running well by midday,” the e-mail added. read more

By Alfred Donovan

Visitors may have wondered why service on our sister website is often interrupted for days at a time by a notice which states: –

“ERROR:  This blog is on hold because its bandwidth has been exceeded. Please contact your blog provider.”

If you want to know the reason why, please visit the following website which contains the full astonishing correspondence file with the website hosting company for  (part of Pipex Telecommunications Plc). read more

RIA Novosti: Russia’s environmental watchdog probes Sakhalin Energy violations

17:36 | 31/ 08/ 2006 

MOSCOW, August 31 (RIA Novosti) – Russia’s environmental protection agency has completed the first part of a comprehensive audit of Sakhalin Energy activities under the massive Sakhalin-II energy project off the country’s Pacific coast, the agency said Thursday.

The Federal Service for the Oversight of Natural Resources started the inspection of Sakhalin Energy’s alleged violations of ecological legislation and project specifications on July 25 on the orders of Natural Resources Minister Yury Trutnev. read more

Yahoo! News: Regulators approve Shell Canada upgrader expansion

CALGARY, Alberta (Reuters) – Alberta regulators have approved a 100,000 barrel-per-day expansion of Shell Canada Ltd.’s Scotford upgrading refinery, part of a planned oil sands project that could cost up to C$12.8 billion ($11.9 billion).

The Alberta Energy and Utilities Board gave Shell Canada the green light to proceed with construction at the upgrading refinery near Edmonton, Alberta. The upgrader converts tar-like bitumen from the oil sands into refinery-ready synthetic crude.

Construction isn’t expected to begin until next year but Randy Provencal, a spokesman for Shell Canada, said the firm may begin clearing land and preparing the site next month. read more

Bloomberg: Russia may open a criminal case against Shell Project

31 Aug 2006

Russia may open a criminal case against Royal Dutch Shell Plc’s Sakhalin-2 project because of “numerous” environmental violations, the country’s Natural Resources Ministry said. Oleg Mitvol, the deputy head of Russia’s environmental inspectorate, is ready to provide material from a recent inspection to the Prosecutor General’s office, the ministry said in an e-mail yesterday. Charges may be brought in relation to illegal logging by subcontractors, the statement said. read more

AFX Europe (Focus): Nigerian oil workers to begin ‘warning strike’ Sept 13 over unrest

AFX Europe (Focus)
Published: Aug 31, 2006

LAGOS (AFX) – Nigeria’s two main oil workers unions will begin a three-day warning strike on Sept 13 in protest against a wave of kidnappings and violence in the Niger Delta, a union official said.

The national executive committees of the National Union of Petroleum and Natural Gas Workers (NUPENG) and Petroleum and Natural Gas Senior Staff Association (PENGASSAN) took the decision late yesterday in the southern town of Benin, the labour leader, who attended the meeting, told Agence France-Presse. read more

The Times: Former Shell chief is pleased but he may sue his accusers

August 31, 2006

SEC drops investigation of Watts
By David Robertson
THE world’s leading financial regulators have concluded that nobody is to blame for Shell’s overstatement of its oil reserves, after the US Securities and Exchange Commission (SEC) dropped its investigation of Sir Philip Watts.

Sir Philip, the former executive chairman of Shell, is understood to be considering how to rebuild his reputation, including potential legal action against those who alleged wrongdoing on his part. 
The SEC, America’s market regulator, has decided not to take its investigation into Sir Philip any farther, a decision that the Financial Services Authority (FSA) in Britain reached last November. Dutch authorities have also decided to take no action, even though Shell has restated its oil reserves five times since 2004. read more

The Hindu News: Shell technology to begin operations in Bangalore

Houston, Aug. 30 (PTI): Shell Technology India (STI) that will deliver high-end technical studies, project management and technical services to companies across the globe will become operational in Bangalore from September this year and plans to go on a massive recruitment drive in the country.

“By the end of 2006 we hope to have 200 engineers and scientists hired locally and envision the workforce growing to over 1,000 in the future,” Paul Hamilton, President, Shell Global Solutions said in his keynote address at the seventh annual Gala of the Indo American Chamber of Commerce of Greater Houston. read more

The Times: nobody is to blame for Shell’s overstatement of its oil reserves…

Need to Know:

Financial regulators have concluded that nobody is to blame for Shell’s overstatement of its oil reserves after the US Securities and Exchange Commission dropped its investigation of Sir Philip Watts, Shell’s former chairman.

The UK’s Financial Services Authority reached the same conclusion last November.

The Dutch authorities also decided to take no action despite Shell restating its oil reserves five times since 2004. 

Financial Times: Shell investors can lay the reserves scandal to rest US watchdog takes no action on Watts

By Andrew Hill

Published: August 31 2006 03:00 | Last updated: August 31 2006 03:00

In the midst of Shell’s investigation into its reserves crisis, in April 2004, Lord Oxburgh, then chairman of Shell Transport and Trading, said “human failings, not structural deficiencies” were to blame for the problems.

At the time, it seemed more likely to be a combination of both.

But the US Securities and Exchange Commission’s decision this week not to take action against Sir Philip Watts, Shell’s former chief executive, means that regulators on both sides of the Atlantic have now decided to punish the company rather than any individuals. The Financial Services Authority’s decision to close its investigation into Sir Philip was announced last November. read more

Financial Times: Ousted Shell chairman off SEC’s hook

By Carola Hoyos

Published: August 31 2006 03:00 | Last updated: August 31 2006 03:00

The US Securities and Exchange Commission has decided not to take action against Sir Philip Watts, the ousted chairman of Royal Dutch Shell, the energy group.

The decision ends the regulator’s two-year investigation into the role Sir Philip played in the reserves scandal that cost the Anglo-Dutch energy group its three most senior executives and £8bn of its market value.

Adriaen Morse, counsel at Mayer, Brown, Rowe & Maw, which represented Sir Philip, said: “Sir Philip’s integrity is beyond reproach. The closing of the investigation lays to rest any doubt as to whether Sir Philip acted properly while chairman of Royal Dutch/Shell.” read more

Daily Telegraph: Browne’s annus miserabilis at BP is not over

By Christopher Hope
(Filed: 31/08/2006)

The Texas explosion investigation, allegations of market rigging and huge oil leaks are making life tough, says Christopher Hope

Some time in the next few months, a clutch of lawyers from Texas are due to arrive at BP’s plush headquarters in London’s St James’s Square looking for the company’s chief executive Lord Browne of Madingley.
Lord Browne: to face oil refinery blast questions
The lawyers will be armed with tape recorders and a list of questions for Lord Browne about the catastrophic blast at BP’s Texas City oil refinery last year, which killed 15 people and left another 180 injured, resulting in a record $21.3m fine for safety violations. read more

Daily Telegraph: Big oil in big trouble as BP faces working over by US

EXTRACT: He was able to show that he relied on Shell’s reserves reporting process which was transparent and involved experts who believed it to comply with SEC rules; that he relied on Shell’s external auditors who followed procedure, reviewed relevant reserves and did not object to Shell’s proved reserves submissions to the SEC; and finally Shell’s reserves booking was discussed openly with other management including the group audit committee. Case dismissed.


Business comment
By Damian Reece read more

Daily Telegraph: US regulator clears ex-Shell boss

By Alistair Osborne, Business Editor

(Filed: 31/08/2006)

After a two-year investigation, SEC tells Sir Philip Watts it won’t take any action regarding oil reserves overbooking scandal.

America’s financial regulator has decided not to take any action against former Shell chairman Sir Philip Watts over the oil and gas reserves overbooking scandal in 2004, which cost him his job and plunged the group into crisis.
Former Shell chairman Sir Philip Watts
The Securities and Exchange Commission told Sir Philip’s lawyers yesterday that it had closed its two-year investigation into his role in the debacle, which saw Shell overstate its proven oil and gas by 23pc, or 4.47bn barrels. read more

The New York Times: S.E.C. Will Take No Action Against Former Chief of Shell

Published: August 31, 2006
By Dow Jones/AP

The Securities and Exchange Commission has decided to take no action against Sir Philip Watts, the former chief executive of Royal Dutch Shell, over the 2004 scandal involving the overbooking of oil reserves, the law firm representing him said yesterday.

The S.E.C., which conducted a two-year joint investigation with the British Financial Services Authority, concluded that no action should be taken against Sir Philip, former chairman of Shell’s committee of managing directors, according to a news release by the firm, Mayer, Brown, Rowe & Maw. read more

The Independent: SEC clears Watts over Shell reserves scandal

By Michael Harrison, Business Editor
Published: 31 August 2006

Sir Philip Watts’ two-year battle to clear his name ended in victory for the former Shell chairman yesterday after the US Securities and Exchange Commission decided not to take any action against him over the oil giant’s reserves reporting scandal.

The decision marks the end of all regulatory investigations into Sir Philip’s role in the affair, which led to the biggest corporate shake-up at Shell in the company’s 100-year history. read more

The Herald (Scotland): Ex-Shell chief cleared in oil scam

KARL WEST August 31 2006
American regulator the Securities & Exchange Commission yesterday confirmed it will be taking no action against Sir Philip Watts, former Shell chief executive, over the oil reserves overbooking scandal.

Watts and other senior managers were ousted after Shell admitted in early 2004 that it had deceived investors by overstating the size of its oil and gas reserves for years.

The revelation sent shockwaves through the market, hitting the group’s shares and leading to a major loss of investor confidence. read more

Dow Jones Newswires: Nigeria Min Appears Before House Panel On Shell – Report

31 August 2006  
LAGOS -(Dow Jones)- Nigeria’s oil minister Wednesday appeared before a House committee to answer questions concerning an alleged underpayment to the government by a unit of Royal Dutch Shell PLC (RDSA), a private television station reported.

Channels TV said that Minister of State for Petroleum Edmund Daukoru presented the Committee on Petroleum a value-for-money audit report that the committee has said is vital to its investigation.

The committee had invited him to testify about an alleged underpayment of $3.2 billion for crude oil shipped by Shell Petroleum Development Co. of Nigeria, or SPDC. read more

The Times: Problems arise when tails are counted as legs

August 31, 2006

Analysis by Patrick Hosking
THE worst scandal to hit Shell in its 170-year history came out of the blue one January morning in 2004.

Shell executives confessed in a conference call to amazed City analysts that the company’s reserves of oil and gas had been overstated by 25 per cent. 
They admitted that reserves — from Nigeria to Australia to Russia — that had been described as proven were, in fact, much less certain of being exploited. All told, they had exaggerated the company’s energy wealth by 3.9 billion barrels, enough to supply the world for 50 days. read more

The Wall Street Journal: SEC Decides Not to Act Against Ex-Shell Chairman

August 30, 2006 3:32 p.m.

The U.S. Securities and Exchange Commission has decided to take no action against the former Royal Dutch Shell PLC boss over a reserves overbooking scandal, his lawyer said Wednesday.

The SEC conducted a two-year joint investigation with the U.K.’s Financial Services Authority and concluded that no action should be taken against Philip Watts, the former chairman of Shell’s committee of managing directors.

“I am extremely pleased that the U.S. authorities have closed the investigation…. I had every reason to believe that all at Shell acted properly and in good faith when disclosing proved reserves,” Sir Philip was quoted as saying in a statement. read more

MarketWatch: SEC drops investigation of former Shell exec

By Jim Jelter, MarketWatch
Last Update: 2:52 PM ET Aug 30, 2006

SAN FRANCISCO (MarketWatch) — The U.S. Securities and Exchange Commission has dropped its two-year investigation of Philip Watts, the former Royal Dutch Shell chairman, deciding to take no action against him for the company’s overstatement of its oil and gas reserves, according to media reports Wednesday.

News in early 2004 that the Anglo-Dutch oil giant had inflated its reserves by at least 20% dealt a severe blow to Shell’s share price, as shaken investors fled the company amid a flurry of lawsuits. read more

The Scotsman: Russia tells Shell to review pipelines

Wed 30 Aug 2006
Russia tells Shell to review pipelines

MOSCOW (Reuters) – Russia’s environmental watchdog, which has already ordered to Royal Dutch Shell to stop work on onshore pipelines on Sakhalin, said on Wednesday the group needed to redraw the plan.

“Onshore pipeline construction can be resumed only after the project is reworked, that it meets all environmental requirements and is discussed with scientists and independent environmental organisations,” the resources ministry said in a statement. read more

MarketWatch: SEC Closes Watts Investigation (*the chief crook gets off)

SEC Concludes Investigation of Royal Dutch/Shell’s Former Chairman
Last Update: 1:13 PM ET Aug 30, 2006

WASHINGTON, Aug 30, 2006 (BUSINESS WIRE) — Late yesterday, the United States Securities and Exchange Commission (“SEC”) provided notice that it had completed its investigation into the circumstances surrounding the recategorization of proved oil and gas reserves by Royal Dutch Shell in 2004.

The SEC, which conducted a two-year joint investigation with the United Kingdom’s Financial Services Authority (“FSA”), has concluded that no action should be taken against Sir Philip Watts, the former Chairman of Shell’s Committee of Managing Directors. read more

UpstreamOnline: Delta security tops union agenda

By Upstream staff

Nigerian oil unions met today to discuss deteriorating security in the Niger Delta and union leaders said a complete withdrawal of their members from Africa’s oil heartland was one option to be considered.

But oil company sources said an ultimatum to the government over kidnappings and attacks on oil installations was a more likely outcome of the meeting in the southern city of Benin.

“Security is our main priority. Proposals include but are not limited to a complete pullout. Other options are an ultimatum or a warning,” said Lumbumba Okugba, deputy secretary-general of the white collar Pengassan union. read more

AFX News: US SEC ends probe on former Shell chairman on reserves scandal

Wednesday, 30th August 2006 13:08

LONDON (AFX) – The US Securities and Exchange Commission has concluded its investigation on Philip Watts, former chairman of the Royal Dutch/Shell Group, regarding his role on the Anglo-Dutch oil major’s oil reserves crisis in 2004, according to Watt’s lawyers.

The SEC, which conducted a two-year joint investigation with the UK’s Financial Services Authority, has concluded that ‘no action should be taken’ against Watts, they said. read more

UpstreamOnline: SEC drops probe into ex-Shell boss

By Upstream staff

The US Securities & Exchange Commission has decided to take no action against former Shell boss Phil Watts over a reserves overbooking scandal, Watts’ lawyers said today.

Watts and other senior managers were ousted after Shell admitted in early 2004 that it had overstated the size of its oil and gas reserves for years.

The revelation hit the company’s shares hard and led to a loss of investor confidence.

However, Watts defended his record as head of the world’s third-largest fully publicly traded oil and gas company by market capitalisation. read more

Dow Jones Newswires: Shell Worker Death Upgrades Strike Threat At Talks Wed – Union

Wednesday August 30th, 2006 / 11h15 
LONDON -(Dow Jones)- The Royal Dutch Shell PLC (RDSB)-led joint venture in Nigeria confirmed late Tuesday that a local employee was killed following a clash 10 days ago between the military and rebels in the Niger Delta, a development that raises the specter of strike action at a meeting between oil unions Wednesday, a union leader said.

The Shell Petroleum Development Co. said in a statement that the body of community relations employee Nelson Ujeya had been found Tuesday, following an incident Aug. 20.
Ujeya, who had been kidnapped by Niger Delta militants, “was said to be in a convoy of boats, together with Bayelsa State Government representatives, Community Chiefs and a number of militants, when there was an exchange of gunfire between some members of the (government) Joint Task Force and the militants,” the statement said. read more

Washington Post: New Probe Another Problem for BP

U.S. Panel, Justice Dept. to Examine Firm’s Oil and Gas Trading

By Stephen Voss and Mathew Carr
Bloomberg News
Wednesday, August 30, 2006; Page D02

BP PLC, the world’s third-largest oil company, is under investigation by U.S. authorities for possible manipulation of crude oil and gasoline markets, a further blow to a reputation that has already suffered from recent oil spills in Alaska.

The crude oil inquiry is being led by the U.S. Commodity Futures Trading Commission, which regulates futures markets, and the Justice Department is probing the company’s gasoline trades, BP spokesman Robert Wine in London said. BP is “cooperating fully,” he said.
BP and chief executive John Browne already face investigations in the United States over an Alaskan oil spill, a refinery explosion in Texas that killed 15 people in 2005 and an alleged plot to manipulate propane prices. The U.S. setbacks have contributed to a 16 percent drop in BP shares since April 24, compared with a 7.4 percent jump at Exxon Mobil Corp, the world’s largest oil company. read more

Financial Times: BP faces two US probes over trading

By Rebecca Bream

Published: August 30 2006 03:00 | Last updated: August 30 2006 03:00

BP has revealed that it now faces two investigations into its trading activities in the US, adding to its troubles following the forced shutdown of its Prudhoe Bay field in Alaska.

The oil major yesterday confirmed media reports that it was being probed over its trading of crude oil and gasoline.

The crude oil inquiry is led by the US Commodity Futures Trading Commission (CFTC), which regulates futures markets, while the US Department of Justice is looking into some of BP’s gasoline trades. read more

Shell-Mex & BP Limited

Comment posted on The Scotsman article: “FTSE boosted by oil on troubled water” 

BP and Shell have both made extravagant claims in multimillion dollar global advertising campaigns about their lofty business ethics and undying commitment to the environment.

The reality is rather different. Many of their own workers lives have been lost in recent years due to management giving a higher priority to production and profits than the safety of their workers (e.g. Shell Brent Bravo). read more

The Guardian: Inquiry into BP ‘market manipulation’

EXTRACT: BP’s fall from grace comes after a period in the limelight when its rival Shell had sacked its chairman after regulators found it guilty of overbooking reserves. It took 18 months for Shell’s share price to recover.


· Investigators look at crude oil and petrol trading
· Browne called to testify in person over Texas fire

Terry Macalister
Wednesday August 30, 2006

BP faced a further serious attack on its integrity yesterday with the disclosure that US federal investigators were looking into allegations it had manipulated oil and unleaded petrol markets. read more

UpstreamOnline: Shell Nigeria sees 2005 output fall

By Upstream staff

Supermajor Shell’s Nigerian venture sees a “challenging” 2006 after its oil production fell 8% last year because of project delays and natural output declines.

Shell Petroleum Development Company production averaged 924,000 barrels per day last year, down from 2004’s one million bpd, the company said in its Shell Nigeria Annual Report recently posted on its website.

Oil output in Nigeria, the world’s eighth-largest exporter, is suffering further in 2006 because of militant attacks. The supply loss helped oil prices hit a record high of $78.40 a barrel earlier this year, Reuters reported. read more

UpstreamOnline: Shell hopes to lift Bonny force majeure

By Upstream staff

Shell said today it hoped to lift a force majeure on exports of Bonny crude from Nigeria soon after a recent increase in output.

Last month Shell declared force majeure on exports of Bonny crude in July and August after a pipeline leak cut production.

“We don’t have a date for when it will be lifted,” Shell spokeswoman Eurwen Thomas said of the force majeure. “The hope is that it will be in the near future.”

UpstreamOnline: Hostage to be freed ‘in hours’

By Upstream staff

An Italian oil worker kidnapped last week in Nigeria will be freed in a matter of hours, a state government spokesman said today.

The expected release of the hostage, a contractor to oil services company Saipem , follows the intervention of a powerful militant group which ordered his unconditional freedom in an attempt to end a spate of kidnappings for ransom, Reuters reported.

“The hostage will be released to the government in the next few hours,” a spokesman for Rivers State government said. read more

China Economic Net: Royal Dutch suspends faulty pipeline: Russia looks at suing Shell

Last Updated(Beijing Time):2006-08-29 15:29
A consortium led by Royal Dutch Shell PLC has suspended pipe-laying work at a section of its giant liquefied natural gas project on Russia’s far eastern island of Sakhalin because of substandard construction work, a spokesman for the consortium said yesterday.

Ivan Chernikovsky said that work had been halted on oil and gas pipelines that traverse a mudslide-prone mountainous area due the company’s concerns that subcontractors’ work did not meet the necessary construction standards. He said the halt would not push back the project’s completion date. read more

Bloomberg: BP’s Crude, Gasoline Trading Under U.S. Investigation (Update 4)

EXTRACT: BP lost its position as Europe’s largest oil company by market value to Royal Dutch Shell Plc after BP earlier this month said it had to shut down the Prudhoe Bay field in Alaska because of inadequate testing for pipeline corrosion.


By Stephen Voss

Aug. 29 (Bloomberg) — BP Plc, Europe’s second-largest oil company, is being investigated by U.S. authorities for possible manipulation of crude and gasoline markets, a further blow to a reputation that’s already suffering from spills in Alaska. read more

Bloomberg: Tropical Storm Ernesto Strengthens, Heads for Florida (Update1)

EXTRACT: Royal Dutch Shell Plc said it has prioritized delivery to its Shell and Motiva gas stations along evacuation routes to ensure drivers can refuel, according to a statement from the company. It also has generators in place ready to power pumps.


By Alex Morales and Courtney Dentch

Aug. 29 (Bloomberg) — Tropical Storm Ernesto regained strength as it moved out over water after crossing Cuba and headed toward Florida, where watches and warnings were extended.

The storm’s maximum sustained winds accelerated to 45 miles per hour (72 kilometers per hour) from 40 mph earlier, the U.S. National Hurricane Center said in an online advisory at 8 a.m. New York time. The storm’s center was about 200 miles southeast of Key West, Florida, over the Florida Straits, moving toward the northwest at about 14 mph. read more

MarketWatch: U.S. oil executives enjoyed biggest paychecks on record in 2005: report

EXTRACT: In contrast, leaders of giant oil companies based outside of the U.S., such as Royal Dutch Shell PLC (RDSA) and BP PLC (BP), received more modest pay last year. BP CEO Lord Browne, for instance, pulled in $5.6 million in 2005, while Shell CEO Jeroen van der Veer made $4.1 million. “While hardly suffering, their combined average pay was a mere 12.4% of the average pay of the top two U.S. oil company CEOs,” the report said of Browne and van der Veer.


By Maya Jackson Randall

MarketWatch: U.S. probes BP over crude, gas dealings (Whether markets were manipulated at heart of latest inquiries)

Aug 29, 2006: LONDON (MarketWatch) — The U.S. government has begun criminal and civil investigations into whether BP Plc manipulated U.S. crude-oil and unleaded-gasoline markets, as the British petroleum giant’s chief executive is being forced to testify under oath about safety problems.

The world’s second-largest publicly traded oil company, BP has acknowledged the investigations and said it’s cooperating with U.S. authorities, The Wall Street Journal reported Tuesday. See Wall Street Journal story below. read more

The Wall Street Journal: BP Woes Deepen With New Probe

Public, Political Pressure May Rise
As Inquiry Looks Into Possibility
Of Manipulation in Gas, Oil Prices

By JOHN R. WILKE in Washington, ANN DAVIS in Houston and CHIP CUMMINS in London
August 29, 2006; Page C1

Federal investigators are examining whether BP PLC manipulated crude-oil and unleaded-gasoline markets, signaling a rise in regulatory scrutiny of the British energy giant, said lawyers and traders close to the case.

BP, which has been summoned before Congress next week over problems in its Alaska pipeline operations, already faces a civil complaint filed by federal commodities regulators for allegedly manipulating much of the U.S. market for propane. The separate investigations on crude oil and gasoline could intensify public and political pressure on BP because these markets are bigger and directly affect most American households.
The Commodity Futures Trading Commission has sent subpoenas to BP and energy traders in the crude-oil probe, which is focused on possible manipulation of the global over-the-counter market in 2003 and 2004, according to lawyers and traders who have been contacted or briefed in the civil investigation. (The over-the-counter market includes trades conducted over the phone or electronically in products not listed on exchanges, or in marketplaces that regulators can’t see.) read more

Irish Times: Irish firms win Corrib Gas contracts

Published: Aug 29, 2006

Irish construction companies have won contracts valued at 76 million for the construction of the controversial Corrib Gas terminal at Bellamaboy Bridge in north Mayo.

The contracts will cover civil works, structural steel works, mechanical engineering works and electrical and instrumentation.

According to Terry Nolan, deputy managing director of Shell E&P Ireland, the 76 million spend will include an investment of 10 million in Erris and over 14 million in Co Mayo.

PM Group was named as the construction management contractor for the giant terminal project last year. The other winning contracts have been submitted by Mercury Engineering, Roadbridge Limited and SIAC Butler Steel. read more

AFX News Limited: Shell Consortium Halts Construction of Sakhalin Pipeline

The Sakhalin Energy consortium, led by Royal Dutch Shell, said it has halted construction of an oil and gas pipeline on Sakhalin Island due to landslide risk affecting a stretch of seven kilometers of the route in the Makarov region.

Spokesman for the consortium Ivan Tcherniakhovski told Agence France-Presse that Sakhalin Energy believes certain sub-contractors have not adhered to technical instructions and standards.

Of the total 1,600 kilometers of pipeline to be laid, 1,410 are completed, and the latest delay is not expected to have an impact on the general timescale of the project, Tcherniakhovski added. read more

The Wall Street Journal: Oil Prices Fall Nearly $2 a Barrel After Hurricane Fears Recede

August 29, 2006; Page C3

Oil prices dropped nearly $2 a barrel as Hurricane Ernesto weakened to a tropical storm and was forecast to miss the energy-production areas of the Gulf of Mexico.

The October crude contract on the New York Mercantile Exchange settled $1.90 lower to $70.61 a barrel on light volume after hitting an intraday low of $70.15. Ernesto, which over the weekend grew into the first hurricane of a heretofore mild tropical storm season, was downgraded late Sunday, and is now forecast to veer east before making landfall in southern Florida. Natural-gas futures also fell, with the September contract settling 68.5 cents down at a month low of $6.472 a million British thermal units.
With the storm’s threat to oil and gas platforms in the Gulf of Mexico receding, traders bailed out of long bets established last week as the storm began to gather force, said Phil Flynn, an analyst at Alaron Trading Corp., a brokerage firm based in Chicago. read more

The Wall Street Journal: Woodside’s Energy Partners Bid Shows Allure of Gulf of Mexico

August 29, 2006; Page A12

Woodside Petroleum Ltd.’s $883.1 million takeover bid for Energy Partners Ltd., based in New Orleans, underscores the industry’s continued interest in the Gulf of Mexico despite recent hurricane activity and the challenge in finding lucrative new deposits in the well-explored area.

The bid by Australia’s Woodside, if successful, would foil Energy Partners’ agreement in June to acquire Stone Energy Corp. of Lafayette, La., for $1.4 billion. Energy Partners yesterday said its board will discuss Woodside’s unsolicited proposal and “in due course” advise stockholders of its position. Stone Energy said it will evaluate the move but still planned on moving forward with the Energy Partners deal. read more

The Independent: Shareholder raps Shell’s ‘corroded’ gas pipes

By Julia Kollewe
Published: 29 August 2006

Royal Dutch Shell has come under fire over corroded gas pipes, just days after BP was forced to shut down production at an oilfield in Alaska due to severe pipeline corrosion.

A shareholder group has lambasted Shell for letting gas pipes corrode in Ireland. Canon Christopher Hall, a Shell shareholder and spokesman for the Ecumenical Council for Corporate Responsibility (ECCR), said he had alerted Shell in May to the corroded pipeline sections which await installation to bring gas ashore from the Corrib field. They have been stored for years in the open air in a quarry at Killybegs, Co Donegal. read more

Associated Press: Shell Halts Pipeline Project in Russia

Monday August 28, 9:38 am ET 

Shell PLC Halts Section of Pipeline Construction at Russian LNG Project

MOSCOW (AP) — A consortium led by Royal Dutch Shell PLC has suspended pipe-laying work at a section of its giant liquefied natural gas project on Russia’s far eastern island of Sakhalin because of substandard construction work, a spokesman for the consortium said Monday.
Ivan Chernikovsky said work had been halted on oil and gas pipelines that traverse a mudslide-prone mountainous area due the company’s concerns that subcontractors’ work did not meet the necessary construction standards. He said the halt would not push back the project’s completion date. read more

Independent Nigeria’s oil hub: It’s like the Wild West with AK-47s’

By Katherine Houreld

Port Harcourt – Foreign workers in Nigeria’s oil hub carpool with rifle-toting police officers on their morning commute. A night on the town can turn into a run from gunfire. And placemats at a popular bar advise:”Eat a lot. Fat people are harder to kidnap.”

Amid a rash of hostage-takings in the nation’s violence-plagued south – including a daring raid on a nightclub in the centre of town – even some of Port Harcourt’s most hardened oilmen are nervous. read more

kommersant (Moscow): Sakhalin Energy Suspends Construction

Sakhalin Energy that is the subsidiary of British-Dutch Shell and the Sakhalin-2 operator has suspended construction of some of the ground-surface pipelines. The official reason is that the company itself revealed violation of technical provisions. But more likely than not, it is the response to Federal Service for Natural Resources Supervision that harbors doubts about ecological safety of the project and which claims could be used by Gazprom to get 25 percent in Sakhalin Energy.

Sakhalin Energy representatives said the company suspended construction of two ground-surface pipelines in the dangerous landslide area of Makarovsky uplift of the Sakhalin Island, as the recent inspection revealed some cases of technical provisions’ violation by the subcontractor. The dates of the project won’t be affected, they pointed out. read more

Planet Ark: ANALYSIS – Biofuel Rush Risks Gasoline Hike, Forest Damage

UK: August 28, 2006

LONDON – Biofuels can both bring down high pump prices and help halt climate change, their supporters hope. 

But the result of the global boom in the green fuel additive may just have precisely the opposite effects in the near-term, according to both oil company executives and green campaigners.

The higher cost of the new fuel will end up being passed down to drivers by the oil industry, and the rush to plant more biofuel crops could result in burning swathes of virgin forest cleared for cultivation, speeding up global warming. read more

The Economist: Kidnap insurance: A king’s ransom

EXTRACT: Oil giants that operate in the Niger Delta, including Royal Dutch Shell, are reconsidering staffing levels. An oil workers’ union is threatening to pull members out after a botched attempt on August 20th to rescue a Nigerian Shell employee who had been seized.


Insuring against kidnap and extortion is a growth industry

August 25, 2006

THE kidnapping of Charles Lindbergh’s infant son from his nursery riveted America and the world in 1932. Mr Lindbergh’s celebrity as an aviator prompted police and the FBI to conduct a big investigation and a ransom was ultimately paid. Sadly, the baby was later found dead, buried in the woods of New Jersey. As well as leaving a lingering imprint on the American psyche, the Lindbergh kidnapping has had a lasting affect on the global insurance industry. After the abduction, Lloyd’s of London began selling some clients kidnap and ransom insurance. read more

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