June 29th, 2007:

Market Report by David Shand
29 June 2007

SPECULATION of a big takeover in the oil sector was fuelled yesterday by a leading broker suggesting industry giant Shell was undervalued by £60 billion.

Morgan Stanley claimed the “valuable businesses” of the oil super majors had been obscured by their conglomerate tag. It added: “Waiting for the catalyst in the oil sector is a pretty sure way of missing the party. No one forecast that BP was going to take over Amoco. Most scoffed at the idea of a merger between BP and Shell last year, but it has now become broadly accepted that the two companies talked to each other about the idea.” read more

EDWARD HARRIS
Published: Jun 29, 2007

Europe’s great powers once scrambled for dominance across vast, underdeveloped African lands rich in raw resources, including the scarlet palm oil used to grease the first cogs of the industrial revolution.

A century later, a new group of nations are competing for a different valuable, viscous material, with Sub-Saharan Africa closing in on the Persian Gulf as the prime overseas supplier of oil to the last remaining superpower.

As China and India increasingly prospect for resources here, terrorism concerns rise and the U.S. military seeks a permanent military presence in Africa, the continent has its greatest international influence in decades. Whether Africa can use its newfound might to end its longtime blight is a separate issue. read more

By Yvette Essen, Stock Markets Reporter
Last Updated: 12:11pm BST 29/06/2007

Royal Dutch Shell was the subject of a second bullish note in as many days, causing the shares to become one of the biggest blue-chip risers in a unsettled market.

Credit Suisse repeated its outperform rating on the shares, saying: “Although much of the earnings gap between consensus and our own forecasts has now closed, we believe management still has more options to maximise shareholder value and that the shares look too cheap.” read more

Fri, Jun 29 2007, 14:26 GMT
by Phil Flynn

Alaron

What is the biggest threat to the world energy markets and the future security of all oil consuming nations? It is of course the “Axis of Oil”. And it seems as the weeks go on the “Axis of Oil” is spinning its errors faster and faster and seems to be getting to the point where they are out of control.

Who or what is the “Axis of Oil”. Well as I have mentioned before they are the countries of Venezuela, Russia and Iran. Countries that are increasingly becoming intoxicated with the power of oil. The power comes from  controlling all that oil and natural gas in a world that is becoming increasingly more and more dependent upon what they have or seek to steal. read more

Friday, June 29, 2007

DONG Energy and Shell have signed a one-year agreement for the transportation of natural gas by Shell from the Danish Tyra field to the Danish market via DONG Energy’s North Sea offshore pipelines.

Shell will begin to transport natural gas through DONG Energy’s offshore pipelines from 1 July 2007. By virtue of the agreement Shell will have the capacity to transport volumes of natural gas equivalent to 10 per cent of the Danish market.

As part of the liberalisation of the gas market, third parties have had access to DONG Energy’s offshore pipelines since 2000. However, this is the first time an agreement has been entered into for such access. To date, DONG Energy’s offshore pipelines have only been used to transport the gas that DONG Energy purchases from Danish North Sea gas producers, including Shell. read more

KAZAKHSTAN
Interview with: Paul Brummell
29 June 2007 – Issue : 736
 
UK ambassador to Kazakhstan Paul Brummell talks to New Europe *

Today, the United Kingdom is the third largest investor into Kazakh economy. The British companies are mainly active in the oil and gas sector, where the United Kingdom has been traditionally strong. However, the current economic policy of Kazakhstan is oriented rather at diversification than at attracting investments. UK ambassador to Kazakhstan Paul Brummell talked to New Europe correspondent in Astana Kulpash Konyrova on the development of the relations between Kazakhstan and the United Kingdom. read more

(The following is a reformatted version of a statement issued by Norway’s Petroleum Directorate, obtained at http://www.npd.no. The statement was not confirmed with the sender.)

Delimitation of gas discovery in the Norwegian Sea
Press Release 24/2007

June 29 — A/S Norske Shell, operator of production licence 255, has concluded drilling of appraisal well 6406/9-2 on the 6406/9-1 discovery (?Onyx Sørvest?).

The 6406/9-1 discovery was proven in 2005 and is located approx. 40 km north-west of the Draugen field in the Norwegian Sea. The discovery contains gas in Middle to Lower Jurassic rocks. In a press release issued in January 2006, the NPD indicated a range of uncertainty of 10-50 billion Sm3 recoverable gas for the discovery. read more

Fri Jun 29, 2007 11:07 AM BST

OSLO, June 29 (Reuters) – Britain’s BP (BP.L: Quote, Profile , Research) delivered to Norwegian authorities on Friday a $5 billion plan for development and operation of the Skarv and Idun oil and gas fields in the Norwegian Sea, the company and officials said.

The production start-up is planned for the third quarter of 2011, BP’s Norwegian subsidiary, BP Norge, said in a statement.

The total recoverable resources are estimated at 106 million barrels of oil and condensate and 48.3 billion standard cubic metres of rich gas, BP said. read more

June 29, 2007: 06:55 AM EST

STOCKHOLM -(Dow Jones)- The Norwegian ministry of petroleum and energy Friday said a consortium of oil companies led by BP PLC (BP) has submitted a plan to develop the Skarv and Idun field in the Norwegian Sea.

In a separate statement, BP said the estimated cost of the project was be NOK30 billion ($5.08 billion).

Statoil ASA (STO), Norsk Hydro ASA (NHY), Royal Dutch Shell PLC (RDSA) and ExxonMobil Corp. (XOM) are the other licensees in the consortium.

According to a ministry press release, the field has the potential to produce 16.8 million cubic meters of oil and 48.3 million cubic meters of gas. Production is estimated to start in 2011. read more

By Trisha Huang

June 29 (Bloomberg) — Competition among petrochemical makers is “fierce” in China where foreign companies investing in the country have to battle dominant domestic suppliers, said Royal Dutch Shell Plc, Europe’s largest oil company.

“China’s domestic companies remain dominant producers and sellers in key markets,” Yu Dai, Shell International Eastern Petroleum Pte’s general manager of base chemicals in Asia and the Middle East, said at a conference in Singapore today.
 
A $4.3 billion petrochemical complex in southern China jointly owned by Shell and China National Offshore Oil Corp. was billed as the largest Chinese joint venture with a foreign company when the investment decision was made in November 2002. The chemical complex at Nanhai in Guangdong is expected to generate $1.7 billion a year in sales of chemicals, Shell said on its Web site. read more

Fri Jun 29, 2007 4:07AM EDT

(Reuters) – Energy groups Statoil and Shell have dropped plans to bury carbon dioxide (CO2) in the seabed beneath Shell’s Draugen field in the Norwegian Sea to enhance oil recovery because it is uneconomical, the companies said on Friday.

The companies reached that conclusion in a joint feasibility study that they had begun in March 2006 and which has cost them around 400 million Norwegian crowns ($67.72 million).

The preliminary plans had envisaged capturing CO2 from a big gas-fired power plant to be built at Statoil’s Tjeldbergodden methanol complex, piping it offshore to the Draugen field and injecting it into the reservoir to boost oil recovery. read more

06.29.07, 4:55 AM ET
 
OSLO (Thomson Financial) – Statoil ASA said it is to boost the recovery of oil from its Snorre field in the North Sea to 55 pct from 45 pct, or by an extra 66 mln barrels, by investing 1.4 bln nkr in new technology and equipment.

‘Snorre is one of Statoil (nyse: STO – news – people )’s most important oil and gas producing fields and its further development will greatly prolong its production lifetime,’ the firm said.

Under the plans, Statoil said the partners in the field had awarded a contract worth 1.4 bln nkr to Statoil-owned Fabricom for development work at the field. read more

Published : Fri, 29 Jun 2007 09:04
 
OSLO (Thomson Financial) – Norwegian oil group Statoil and Britain’s Shell said they are scrapping plans to use carbon dioxide (CO2) to increase oil production.

An evaluation showed that ‘although the value chain is technically feasible, it is not commercial viable,’ Statoil said in a statement.

The project, announced in March 2006, involved the construction of a gas-fired power plant and a methanol production facility in Tjeldbergodden in central Norway, from which CO2 would be directly injected into the Draugen and Heidrun offshore fields to enhance oil and gas recovery. read more

EXTRACT: Royal Dutch Shell has a license for 2,000 fuel stations, yet it has set up just 32 fuel stations.

Published: Friday, 29 June, 2007, 01:56 AM Doha Time 
By Nidhi Verma

NEW DELHI: A rebound in global oil prices to 10-month highs may force India into another small yet unpopular fuel price increase next month, dousing any lingering talk of the full-scale liberalisation that refiners yearn for.

The Congress party-led government, more wary than ever of its fragile voter base, has trimmed gasoline and diesel prices twice in the past 12 months, rolling back much of the increase of Rs2-4 in June 2006, when Indian crude was around $67 a barrel. read more

Jun. 29, 2007 (China Knowledge) – Royal Dutch Shell plans to construct its mainland sixth lubricant-blending plant in Zhuhai, Guangdong province in order to tap on the rising demand in South China. 

Shell’s latest addition is set to help capture the fast growing auto market in China, which reported an increase of 21% in passenger car sales in the first five months to 2.57 million units. The main demand of lubricant stems from car use.

The new plant once ready for operations in 2009 will be one of Shell’s three largest lubricant-blending plants worldwide. The plant will first start off with an initial capacity of 200 million liters, which might be doubled later pending market demand, according to sources. read more

Biggest investment yet in sector ends Fort Hills doubts

Claudia Cattaneo And Jon Harding, Financial Post
Published: Friday, June 29, 2007

CALGARY – As oil prices sailed past a nine-month high of US$70 a barrel yesterday, Petro-Canada and its partners pushed forward with Canada’s largest oilsands investment yet: a $33.4-billion oilsands-mining venture they said can generate a reasonable return even if oil dips to US$45.

The move casts aside uncertainty about the future of the once-beleaguered project, known as Fort Hills, and helps restore a measure of faith in the oilsands after months of doubt due to cost escalations. read more

By Bruce Nichols

NEW ORLEANS – The boom in Gulf of Mexico oil exploration since the 1970s made New Orleans a hub of the U.S. energy industry, but the devastation caused by Hurricane Katrina in 2005 has led some oil companies to move out, a mini-exodus that could grow.

A recent survey by New Orleans CityBusiness magazine found that 12 of 23 publicly traded companies headquartered in New Orleans had left since Katrina, including four energy-related firms.

Tidewater Inc., the world’s largest operator of oil industry service vessels, recently became the latest to say it is considering moving its headquarters to Houston, the U.S. capital of oil and gas. read more

29 June, 2007
Viewpoint: By Liz Walker

Here, in western America, petrol prices are going through the roof. 

Every TV station carries pieces where hard-up, hard-working people tell us just how difficult their lives are because gas is now three dollars 50 a gallon.

In Britain we pay nearer eight dollars, but the comparison isn’t really fair. In the USA, distances are huge and no-one has given a thought to the cost of a mere hundred miles in years. Not since they needed a horse, anyway. 

All of a sudden everyone is talking about alternatives. Bikes are being exhumed and car pools started, although no-one is considering the bus. read more

SALT LAKE CITY The federal government issued a lease on Thursday to a partnership that wants to open an abandoned oil shale mine in eastern Utah.

The Interior Department issued the 10-year lease to Alabama-based Oil Shale Exploration Co., for Utah’s only oil-shale experiment on federal land.

Last December, the department leased other 160-acre parcels of federal land in northwest Colorado to three energy companies also trying to coax oil out of hard rock. Parts of Colorado, Utah and Wyoming contain enough petroleum in theory to meet U.S. energy needs for a century, but it is an expensive process to start. read more

June 28, 2007: 12:13 PM EST

(Updates with more quotes, background.)

NEW YORK -(Dow Jones)- A spokesman for Russian President Vladimir Putin said Thursday the Kremlin isn’t involved in a disagreement between the state- controlled natural gas monopoly and Exxon Mobil Corp. (XOM) over a multibillion- dollar, offshore energy venture.

“It will be wrong to say the Kremlin is somehow involved,” Dmitry Peskov, the Kremlin’s first deputy press attache, told journalists during a phone briefing. “Gazprom is a Russian company. Kremlin is the state. You have to divide Kremlin and Gazprom.” read more

Company aims to produce 140,000 barrels a day by 2012
Reuters: Published: Friday, June 29, 2007

CALGARY – The first phase of Petro-Canada’s Fort Hills oil sands project in Alberta is expected to cost $14.1 billion, an amount the company hopes to keep in check by staggering the start-up of the project’s various parts, it said yesterday.

Petro-Canada and its Fort Hills partners are wrestling with a tight labour supply in Alberta and surging materials costs as the world’s oil industry rushes to develop the oil sands. read more

By Robert Tuttle

June 28 (Bloomberg) — Royal Dutch Shell Plc, Europe’s largest oil company, had a flange gasket fail at its Deer Park, Texas, refinery yesterday, according to a report on a state- administered regulatory Web site.

The gasket “blew out” while a transfer line was being flushed out, causing alkylate to spill , the report said.

The refinery, located near Houston, can process 340,000 barrels of crude oil a day. Dave McKinney, a Shell spokesman, didn’t immediately respond to a message seeking comment. read more

By Joe Carroll

June 28 (Bloomberg) — Chevron Corp., the second-largest U.S. energy company, said its $3.5 billion Tahiti oil project in the Gulf of Mexico will be delayed after shackles that connect the production platform to the seafloor were found to be faulty.

New shackles are being ordered to ensure the platform is safe and reliable, Mickey Driver, a spokesman for San Ramon, California-based Chevron, said today. He said it’s not known how long it will take to finish the project, which had been scheduled to begin pumping oil in mid-2008. read more

JULY 9, 2007 
GLOBAL BUSINESS/Commentary

Go-it-alone governments are choking back output to perilous levels

Some “peak oil” cassandras warn that global energy production will soon fall into permanent decline. But a more immediate danger to world oil supplies may be the tempestuous politics of many producing countries. Witness Venezuela’s move to wrest control of key oil projects from global companies on June 26. The move echoes steps taken in other nations that will likely either decrease production or slow its growth in coming years. “The oil is in the ground, but serious doubts are being raised about whether countries have the desire and means to produce it,” says Leo Drollas, deputy director of the Center for Global Energy Studies, a London think tank. read more

JULY 9, 2007
 
THE CORPORATION

Many savvy companies are starting to realize that a good name can be their most important asset—and actually boost the stock price

A recent print ad by United Technologies Corp. (UTX ) looks deceptively like an assembly diagram for a model helicopter. Study it more closely, however, and you’ll notice that the color schematic of UTC’s Sikorsky S-92 copter is embedded with messages aimed at Wall Street.

Text near the engine trumpets 40% lower maintenance costs than comparable helicopters and a “health and usage system” that ensures the S-92 “always operates at peak performance.” Next to a view of the cockpit, you learn that the thermal imaging system lets rescuers find people they can’t see. Other text notes fuel efficiency that allows “more rescues per gallon” and paint with few compounds that harm the environment. “You don’t have to understand everything we do to profit from it,” crows the tagline. The underlying theme: UTC is a great investment because it is a leader in innovation and eco-friendly technologies that help the bottom line. read more

By Beate Evensen

June 29 (Bloomberg) — Statoil ASA, Norway’s largest oil producer, said a project with Royal Dutch Shell Plc to use carbon dioxide to increase production from the Draugen field offshore Norway wouldn’t be profitable.

The two companies have studied whether to use carbon dioxide, a greenhouse gas blamed for global warming, from a proposed natural-gas-fired power plant at Tjeldbergodden in central Norway to raise output at offshore fields by injecting the gas into the reservoirs. read more

By SARAH TURNER
June 29, 2007

European shares moved broadly higher on Thursday, buoyed by some strong performances in the oil and gas sector, ahead of a key Federal Reserve decision on U.S. interest rates.

The pan-European Dow Jones Stoxx 600 index increased 1.0% at 391.60, as oil and gas companies climbed 1.9% amid crude prices that climbed toward the $70-a-barrel mark.

Shares of oil giants BP, Royal Dutch Shell and Total were all trading nearly 2% higher.

Broker comment also lifted the sector as Morgan Stanley upgraded Royal Dutch Shell to equal-weight from underweight. read more

Jun 28th 2007 | CARACAS
From The Economist print edition

Exeunt Exxon and Conoco

WHEN Venezuela’s government announced this week that two American oil giants, Exxon Mobil and ConocoPhilips, would walk away from their large investment in the Orinoco heavy-oil belt rather than accept tough new contract terms, officials presented it as the recovery of sovereignty over another slice of the country’s all-important oil industry.

Some other Venezuelans saw a government blunder that could accelerate the decline of the state oil company, Petróleos de Venezuela (PDVSA). Either way, the impact of the walkout may not be immediate. read more

By Neil Hume and Robert Orr
Published: June 29 2007 03:00 | Last updated: June 29 2007 03

Royal Dutch Shell was the stand-out feature in the oil sector. It shares gained2.6 per cent to £20.60 after Morgan Stanley claimed the company was undervalued by a staggering $120bn (£60bn).

Upgrading it to an “equal weight” recommendation and setting a £23 target price, the broker said a detailed sum-of-the-parts valuation exercise had uncovered a significant valuation gap.

“Conservatively we think Shell is worth around $385bn, which is 45 per cent higher than the current enterprise value of the company,” said the broker. read more

Headline: Three skyscrapers planned for site next to Waterloo station

By Jim Pickard,Property Correspondent
Published: June 29 2007 03:00 | Last updated: June 29 2007 03:00

Plans for a £1bn scheme featuring three skyscrapers will today be unveiled for a site next to Waterloo station currently occupied by a 1960s eyesore.

Elizabeth House, just to the edge of Waterloo, is a multi-let 1960s office block that vies with the likes of Centerpoint as London’s least charming modern building.

It was built to house government workers by architect John Poulson, whowas later jailed for corruption relating to the building of council housing in the north of England. read more

Last Updated: 3:16am BST 29/06/2007

A round-up of headlines from across the financial sectors, provided by Bloomberg News

ENERGY

•Royal Dutch Shell won’t return to the western delta region of Nigeria this year because of militant violence.

• Shares of Renova Energy rose the most in eight weeks on optimism it will recover from an 84pc slump in annual profit as prices for ethanol rally.

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2007/06/29/cxbloom129.xm

Friday, 29 June 2007, 2:42 pm
Press Release: Shell New Zealand 

Shell NZ Ecobulb promotion seeks to save Kiwis millions Shell New Zealand, Energy Mad, the Electricity Commission, Housing NZ Corporation and Trustpower today launched the Shell Ecobulb Promotion at participating Shell sites.

Targeting the sale and installation of one million Ecobulbs in New Zealand homes, this will be one of the largest energy efficiency projects undertaken in New Zealand.

The Shell Ecobulb Promotion, which commences on the 2nd of July, is aimed at encouraging households to replace the five most often used incandescent bulbs with energy saving Ecobulbs. The promotion will allow customers the opportunity to use barcoded vouchers to purchase five Ecobulbs for just $10 at participating Shell service stations. read more

EXTRACT: Miners and oil companies led the FTSE 100 index to only its second gain in eight sessions. Shell took on more than 2 per cent after Morgan Stanley said the group was hugely undervalued and a potential target for shareholder activism, while BHP Billiton and Rio Tinto climbed as UBS raised forecasts across the sector to reflect higher coal prices.

Headline: Kill the competition

June 29, 2007

Today’s round-up of national and international business news from The Times
Friday, June 29, 0730 BST read more

June 29, 2007
Large caps
Bryce Elder

Shareholder activism was the theme of the day as the FTSE 100 index registered its first serious rebound in eight sessions.

Shell was among the beneficiaries, climbing 52p to £20.60 after Morgan Stanley argued that the oil giant’s discount left it undervalued by about £60 billion. “There is a massive gap between the market value and the underlying value of the company,” it told clients. “There is a blue sky upside case of £32.10 per share.”

While the broker saw this anomaly persisting unless management take radical action, it was the valuation gap that left Shell looking vulnerable. It told clients: “Taking over an oil major might be a bite too far, but taking 10 per cent of the company and then applying relentless pressure on the board is another matter. There are plenty of groups that could invest enough to force change on a major oil company board.” read more