October 20th, 2006:

Fri Oct 20, 2006 1:16 PM ET

By Rex Merrifield and Ingrid Melander

LAHTI, Finland (Reuters) – European leaders agreed on Friday to deliver a blunt message to President Vladimir Putin that Russia must give European firms more chance to exploit its huge energy resources or risk an investor exodus.

Putin arrived as guest at a potentially fraught EU summit dinner, with bloc president Finland pledging to raise the killing of journalist Anna Politkovskaya and the Kremlin’s heavy handed treatment of the former Soviet republic of Georgia. read more

By Sebastian Alison

Oct. 20 (Bloomberg) — President Vladimir Putin is likely to defy calls to give European companies more access to the Russian energy market, using state control of the oil and gas industry to boost Russia’s economic clout.

European Union leaders said they will push Putin at a summit in Lahti, Finland, tonight to let western energy producers build up operations in Russia in exchange for promises of increased sales of Russian gas to European customers.

Russia is using its status as the world’s largest fuel exporter as an economic weapon, shutting off the natural gas tap to Ukraine at the start of the year and threatening to scrub a $22 billion Royal Dutch Shell Plc project in September. read more

20:21 | 20/ 10/ 2006

MOSCOW REGION, October 20 (RIA Novosti) – A new expert review that envisions increased spending on the giant Sakhalin II project will be ready by December, a deputy Russian industry and energy minister said Friday.

“The term for the state expert review to be implemented is the fourth quarter of 2006,” Andrei Dementyev told journalists. “I think it will reach us in early December.”

Earlier, it was reported that Sakhalin Energy, the operator of the oil and gas project on Russia’s largest Far East island, proposed increasing expenditures on the project to $21.9 billion. read more

Fri Oct 20, 2006 10:17 AM BST

By Tom Bergin

LONDON (Reuters) – BP and Royal Dutch Shell are expected to report a fall in underlying third-quarter profits in the week ahead, ending a three year run of record earnings on the back of rising oil prices.

Analysts believe higher oil prices quarter will fail to have compensated for soaring oil field costs, higher taxes, a fall in refining margins and lower production.

The results will bolster the view that big oil companies’ earnings have peaked and that a fall of over 20 percent in oil prices since early August points to tougher times ahead. read more

10.20.2006

LONDON (AFX) – Royal Dutch Shell PLC-led Sakhalin Energy has assured the Russian government it will urgently address the remaining environmental issues that were raised about the 20 bln usd Sakhalin-2 gas project.

Ian Craig, chief executive of Sakhalin Energy, said in a letter to Russian Minister for Natural Resources Yuri Trutnev that it will ‘respond quickly and adequately to correct any more non-conformances’ identified during the project inspection this month.

He assured Trutnev the group will engage in a ‘constructive dialogue’ with the authorities and treat any findings of the inspection ‘with the highest priority’. read more

Created: 20.10.2006 12:23 MSK (GMT +3), Updated: 12:41 MSK

Russia’s environmental protection agency Rosprirodnadzor has submitted the documents on revoking licenses held by the Sakhalin branch of state-controlled oil company Rosneft. This information was reported by the country’s Natural Resources Ministry on Thursday, Oct. 19.

The ministry said serious violations had been revealed during inspections of Sakhalinmorneftegaz’s compliance with environmental protection legislation. The company in question works on the oil-rich island in Russia’s Far East, which is also the site of the controversial Sakhalin-2 project led by Anglo-Dutch oil major Royal Dutch/Shell. read more

Fulll headline: International Herald Tribune: Reports: Russian official says Energy Ministry in talks on changing business model at Sakhalin-2 

The Associated Press
Published: October 20, 2006
 
MOSCOW Russia’s Industry and Energy Ministry is in talks with investors in the Sakhalin-2 liquefied natural gas project on changing the business model of the giant endeavor after costs more than doubled to nearly US$22 billion (€18 billion), Russian news agencies reported.
 
The comments were made by Andrei Dementyev, the ministry’s deputy head, at a specially convened discussion of the Royal Dutch Shell-led project in Russia’s upper house of parliament.
 
Ivan Chernikovsky, a spokesman for Sakhalin Energy, the consortium developing the project, told The Associated Press that as long as negotiations on the budget overrun were continuing “we cannot comment on the contents and status of these confidential discussions.”
 
The project has come under intense pressure from environmental regulators. Analysts say the probes are being used to pressure the company to reconsider the terms of the original agreement to develop the fields, which are located off the Pacific island of Sakhalin, and to secure access for a Russian state-controlled company to the project.
 
The so-called production sharing agreement, which was signed in the 1990s, allows Shell to recoup all of its expenses before sharing any profits with the Russian state. The cost overrun announced last year would therefore massively delay the point at which the government would see revenues from the project.
 
Also speaking at the parliamentary hearing, Russia’s Natural Resources Minister Yuri Trutnev said that while he had received assurances from the consortium running the project that the oversights were being rectified, he could not rule out that work at the development may be halted.
 
“The Russian Natural Resources Ministry is responsible for the observance of environmental legislation. If Russian laws are going to be trampled on and if the environment is going to be damaged, then we will take measures to stop the project,” the Interfax agency news agency quoted him as saying.
 
Trutnev is due to met with representatives of the consortium on Sakhalin next week, at which they will present a plan to resolve the environmental violations.
 
“It will be proposed that Sakhalin Energy compensate for and resolve the damage,” Trutnev said in televised remarks. He said that the consortium’s chief executive officer, Ian Craig, had sent him a letter “in which the company acknowledges — virtually in full — … that it has violated the ecological legislation of Russia.”
 
In a statement, Sakhalin Energy said that it had notified Trutnev of the state of work to rectify “non-compliant environmental practices” identified in an August environmental audit and would respond “quickly and adequately” if further problem were identified in a check that began on Oct. 3. 
  read more

14:16 | 20/ 10/ 2006 
 
MOSCOW, October 20 (RIA Novosti) – The giant Sakhalin II oil and gas project on Russia’s largest Far East island is becoming less effective for Russia, and raises doubt over product sharing agreements in the country, a member of parliament’s upper house said Friday.

Devised in the 1990s when oil prices were much lower, production sharing agreements such as Sakhalin II offer investors major tax benefits. Under such agreements, Russia will start receiving its share of profits only after investors have recovered their costs. read more

10.20.2006, 04:58 AM 
 
MOSCOW (AFX) – Sakhalin Energy, the operator of the Sakhalin-2 hydrocarbons development, has raised its estimate of the cost of the project to 21.9 bln usd from 9.9 bln, Interfax news agency quoted Deputy Industry and Energy Minister Andrei Dementyev as saying.

The ministry is now in talks with Sakhalin’s investors regarding the possibility of reviewing the project’s business model, he added.

Royal Dutch Shell PLC-led consortium holds a 55 pct stake in the project, whose permits Russia’s ministry of natural resources revoked last month on environmental grounds. read more

MOSCOW. Oct 20 (Interfax) – Russian Natural Resources Minister Yury Trutnev said he did not rule out the possibility of the Sakhalin-2 hydrocarbons project being suspended.

“The Russian Natural Resources Ministry is responsible for the observance of environmental legislation. If Russian laws are going to be trampled on and if the environment is going to be damaged, then we will take measures to stop the project,” Trutnev told reporters on Friday.

Friday, 20th October 2006 09:25

MOSCOW (AFX) – The giant Sakhalin-2 oil and gas project must comply with Russian environmental laws or face being shut down, said Natural Resources Minister Yury Trutnev.

‘If the Russian Federation’s laws are going to be violated, if damage is done to the environment, we will take measures to stop the project,’ Trutnev told reporters.

A Royal Dutch Shell PLC-led consortium holds a 55 pct stake in the project, whose permits the ministry revoked last month. read more

20.10.2006, 11.49
 
MOSCOW, October 20 (Itar-Tass) – The situation over the Sakhalin-2 project prompts the need for a closer look at the progress of other oil and gas projects, Russian Minister of Natural Resources Yuri Trutnev said.

He spoke at an irregular meeting of Russian parliament’s upper house over the Sakhalin-2 project on Friday.

The operator of Sakhalin-2 is ready for a constructive dialogue, Trutnev said.

The operator company Sakhalin Energy “practically has fully admitted violations of Russia’s environmental legislation”, he said. read more

By Sebastian Alison

Oct. 20 (Bloomberg) — President Vladimir Putin is likely to defy calls to give European companies more access to the Russian energy market, using state control of the oil and gas industry to boost Russia’s economic clout.

European Union leaders will push Putin tonight in Lahti, Finland, to let western energy producers build up operations in Russia in exchange for promises of increased sales of Russian gas to European customers.

Russia is using its status as the world’s largest fuel exporter as an economic weapon, shutting off the natural gas tap to Ukraine at the start of the year and threatening to scrub a $22 billion Royal Dutch Shell Plc project in September. read more

By Torrey Clark

Oct. 20 (Bloomberg) — Royal Dutch Shell Plc’s $22 billion Sakhalin-2 oil and gas venture will get the chance to repair environmental damages on the island, Russian Natural Resources Minister said, as the government softens a campaign to increase its sway over the development.

Russia has no plans to stop Sakhalin-2, Yury Trutnev told the upper house of Russia’s parliament at hearings on the development today in Moscow. The government expects to levy fines against the project and will make a final decision at the end of the month when it completes a review of Sakhalin-2. read more

by F. William Engdahl

The September 2006 summit in Paris between Russia’s Vladimir Putin, French President Jacques Chirac and German Chancellor Angela Merkel, underscored the re-emerging of Russia as a major global power. The new Russia is gaining in influence through a series of strategic moves revolving around its geopolitical assets in energy—most notably its oil and natural gas. It’s doing so by shrewdly taking advantage of the strategic follies and major political blunders of Washington. The new Russia also realizes that if it does not act decisively, it soon will be encircled and trumped by a military rival, USA, for which it has little defenses left. The battle, largely unspoken, is the highest stakes battle in world politics today. Iran and Syria are seen by Washington strategists as mere steps to this great Russian End Game. read more

EXTRACT: Oil, gas, fisheries and mining would be opened up and deregulated to pave the way for European corporations’ access to natural resources – which has already damaged African communities and their environment, from Shell’s operations in the Niger Delta, to mining operations in Zambia, and fish trawling off the coast of west Africa. Mandelson must be forced to start listening to the demands of the poor.

THE ARTICLE

Friday October 20, 2006

EU trade commissioner Peter Mandelson is right that foreign investment has the potential to help reduce poverty in sub-Saharan Africa (Letters, October 19). But the idea that fewer restrictions on the activities of foreign investors will automatically benefit poor people is wrong. read more

By: Anna Maria Samsudin,
Published: Oct 20, 2006

AS THE year-end deadline looms, Malaysian telecommunications companies (telcos) are using Shell petrol stations nationwide to register prepaid customers.

Celcom (Malaysia) Bhd, Digi Telecommunications Sdn Bhd, and Maxis Communications (Malaysia) Bhd will collaborate with Shell Malaysia to enable prepaid registration at Shell Select convenience stores nationwide.

As of today, 180 of these stores will be equipped with a special terminal to enable prepaid customers to register their lines. read more

Published: Oct 20, 2006

THE first independent opinion poll on the controversy over Shell’s plans to build a 200m terminal in north-west Mayo has revealed that almost half of voters in the county are opposed to the project.

A total of 45pc of voters sampled by new newspaper, the ‘Mayo Advertiser’, said they supported the campaign of lobby group ‘Shell to Sea’ to have the terminal moved offshore.

Just 15pc of those surveyed across the county said they supported Shell, but a significant 40pc said that they had no opinion on the controversy. read more

By Craig Smith and Howard Ward

Published: October 20 2006 03:00 | Last updated: October 20 2006 03:00

Britain is a leader in the field of corporate social responsibility, home to many of its foremost thinkers, campaigners and practitioners. Yet many of these experts believe CSR is at a turning point and may be facing a quiet death.

Worldwide practices have long been shaped, in good and bad ways, by the experiences of UK companies, non-governmental organisations and governments. The exploits of the East India Company, for instance, still colour Indian attitudes to foreign investment. In contrast, the Lever soap factory at Port Sunlight, opened in 1884, was a widely emulated alternative model of industrial development. read more

By Carola Hoyos in Doha
Published: October 20 2006 03:00 | Last updated: October 20 2006 03:00

The Organisation of Petroleum Exporting Countries, the cartel that controls 40 per cent of the world’s supplies, yesterday declared its resolve to defend $60 as a new minimum international oil price. Saudi Arabia, the world’s biggest oil producer, backed an immediate Opec output cut of 1m barrels a day and warned that a second reduction would be considered in December.

The strong message from the world’s most influential oil producer yesterday pushed up oil prices even before Opec had agreed a final declaration and overcome the divisive issue of how to share the burden of cutting production and revenue. Nymex and Brent crude futures, the world’s two international benchmarks, both jumped almost a dollar in the moments after Ali Naimi, Saudi Arabia’s oil minister, made the kingdom’s position clear. read more

By Carola Hoyos in Doha

Published: October 20 2006 03:00 | Last updated: October 20 2006 03:00

In fashion, every few seasons, brown is the new black. In life, 40 has become the new 30. For Opec, $60 a barrel is the new $30.

That became clear for the first time when Ali Naimi, Saudi Arabia’s oil minister and perhaps the most influential man in the sector, yesterday revealed the kingdom’s resolve not to let international oil prices – which are at about $60 a barrel – slip any further. read more

BY GREGORY PHILLIPS : The Herald-Sun
[email protected]
Oct 19, 2006 : 9:15 pm ET

DURHAM — Amid a 50-city tour to claw back some credibility for his much-maligned industry, Shell Oil’s president visited Durham Thursday to explain why Americans need to know more about how they get their energy.

“We the industry have trained people to be entitled to low-cost gasoline, never having explained how difficult it is to keep that low-cost gasoline in supply,” John Hofmeister told more than 100 students, faculty and other observers at Duke University’s Nicholas School of the Environment and Earth Sciences. read more

Friday October 20, 1:29 PM

MOSCOW, Oct 20 (Reuters) – Royal Dutch Shell’s joint venture with Russian oil firm Sibir Energy, Salym Petroleum Development, has been hit with a back-tax claim of more than $10 million, the Vedomosti business daily said Friday.

Vedomosti quoted a source close to the company as saying the back-tax claim was for the 2002-2004 period and that the venture — one of the largest onshore energy projects in Russia — was disputing the claim, while a Russian tax official confirmed to the paper that the claim existed. read more

Web posted Sunday, October 22, 2006

By Tim Bradner
Alaska Journal of Commerce 
 
YUZHNO, Russia – The multibillion-dollar Shell and Exxon Mobil oil and gas projects off Sakhalin Island, in Russia’s Far East, could be just the start of major oil discoveries in the region.

Oil discoveries are being made by BP and its Russian partner, Rosneft, in deeper waters is the Sea of Okhotsk, north of Sakhalin, although it isn’t yet known if the discoveries can be developed commercially. Rosneft is also in the early stages of exploration in another area further north, just offshore the Kamchatka Peninsula. read more

EXTRACT: Shell’s $20 billion oil and gas project in Sakhalin looks likely to fall victim to the Kremlin’s strategy to reassert central control over energy.

THE ARTICLE

October 20, 2006

In the Finnish lakeside city of Lahti tonight, the European Union’s coveted “soft power” comes face to face with Vladimir Putin. It looks to be a sobering encounter. No matter how good the wine or emollient the words or grand the pageantry, the Russian president is in no mood to play nice.
 
It’s about time that Europe faced up to a few realities of global politics, and Mr. Putin is an ideal teacher. In recent months, the Kremlin has changed its opinion of the EU from bureaucratic irrelevance to a serious threat to Russian interests. Europe, the idea and place, has proved all too attractive to former Moscow vassals, providing a lot of the emotional fuel for democratic turnovers in Ukraine and Georgia and guiding much of Central Europe into the West through its enlargement process. read more

THE WALL STREET JOURNAL ONLINE
October 19, 2006 5:30 p.m.

Crude-oil futures jumped after Saudi Arabia’s oil minister backed OPEC production cuts, with the front-month November contract on the New York Mercantile Exchange rallying 85 cents to settle at $58.50 a barrel. Here is Thursday’s roundup of oil and energy news:

* * *
SAUDI BACKS OPEC CUTS: Saudi Arabia’s oil minister Ali Naimi said he firmly backs a plan by OPEC to cut one million barrels a day from current production levels, and pledged to pare output again in December if needed. Mr. Naimi’s remarks put to rest speculation that Saudi Arabia, OPEC’s largest producer and exporter, wasn’t enthusiastic about the output cut. read more

So the state has now shelled out more than three-quarters of a million euro on Gardaí protecting Shell workers in North Mayo.

Depending on your point of view, this waste of money is down to the local protesters who won’t go away or to the oil company who won’t go to sea.

But whichever side of the argument you’re on, the one thing that’s beyond debate is that it is an appalling waste of money.

More importantly, if there is spare Garda capacity, there are far more critical locations for these 110 boys in blue – rising to a high of 170 on occasion – to ply their trade. read more

By Clare Byrne

Published: Thursday October 19, 2006

By Clare Byrne, Mayo, Ireland- For over two weeks the site of a planned gas terminal in north-west Ireland has been the scene of tense early- morning standoffs between police and prayer-chanting protestors. The protestors, ranging in age from teens to retirement age and generally numbering around 100, say that praying helps them to focus as they begin their daily picket outside a Shell refinery at Bellanaboy, County Mayo.

The protest peaks each day with the arrival around 8 a.m. of a police-protected convoy of jeeps transporting workers, usually to jeers from the crowd. read more

UPDATED: 2006-10-19 17:10:39 MST
By TODD SAELHOF, CALGARY SUN
 
Another slick fundraising campaign by a major oil player is helping improve the lives of needy Calgarians.

Employees of Shell Canada and the company have raised a whopping $3.6 million for United Way, as announced today by the oil company’s president and CEO, Clive Mather.

“The amount is a measure of the heart of this company, the generosity of the staff and retirees and the care they have for this great city of Calgary,” Mather said. read more