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Financial Times: Venezuela takes control of private oilfields

Financial Times: Venezuela takes control of private oilfields: Tuesday 3 January 2006
By Andy Webb-Vidal in Caracas
Published: January 3 2006
Venezuela has this week taken state control of 32 privately operated oilfields in a move that will raise fiscal revenue but could damp future investment to boost output from the world's fifth-largest exporter.
The transitory contract conversions pave the way for Petróleos de Venezuela, or Pdvsa, the state-owned oil company, to formalise holdings of up to 70 per cent in the new joint ventures.
Majority state ownership over the affected oil units fulfils a policy goal of President Hugo Chávez, who has long called for greater control of Venezuela's oil reserves, which are the largest in the Americas.
Rafael Ramírez, the energy minister and head of Pdvsa, said the move signalled Venezuela's “recovery'' of oilfields over which the state had “renounced collecting royalties''. Mr Ramírez told the FT last month that the existing contracts had meant that Pdvsa lost money in those ventures.
Pdvsa said last week that it made a net profit of $9.4bn (€8bn, £5.5bn) in 2005, almost 120 per cent more than during the previous year.
About 500,000 barrels per day of Venezuela's total output of 2.7m b/d are affected by the changes. Pdvsa will define the terms of the new contracts in the months ahead, including higher tax rates.
All multinationals operating in Venezuela – with the exception of US-based ExxonMobil – accepted the January 1 deadline for conversion. Pdvsa said ExxonMobil had sold its 25 per cent stake in the 15,000 b/d La Ceiba field to Repsol-YPF of Spain.
In addition to Repsol-YPF, companies that agreed to convert to joint ventures included BP, ChevronTexaco, China National Petroleum Company, Eni, Petrobras, Anglo-Dutch Royal Dutch Shell and Total.
The existing agreements were created in the 1990s as a way of tapping foreign capital to boost output. But a 2001 law requires all oil production be undertaken by companies that are majority-owned by the state.
Output from the oilfields affected has declined in recent months, in part due to uncertainty over the impending changes. Investment banks predict that production will not recover while the new arrangements remain vague.
“Until then, we do not expect companies to make any significant investments and oil output to remain below previous levels in 2004,'' Deutsche Bank said in a report. “On the other hand, once the conditions in the new agreements are defined, oil output could rapidly recover.''
Higher oil prices have forced multinationals to accept less lucrative conditions in several oil-producing countries. read more

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Globe and Mail (Canada): Oil patch expects richer Shell offer: “The deal is logical, expected, and widely rumoured”:

Tuesday 3 January 2006
By ANDREW WILLIS AND PATRICK BRETHOUR
Monday, January 2, 2006
From Tuesday's Globe and Mail
Royal Dutch Shell PLC will have to pitch a sweet offer to shareholders in its Canadian subsidiary if the company does launch a rumoured $7.6-billion-plus buyout of Shell Canada Ltd.
Shares in Shell Canada surged nearly 10 per cent Friday on reports that its parent, based in The Hague, is contemplating a buyout of minority shareholders, who own 22 per cent of the Canadian company.
“The deal is logical, expected, and widely rumoured,” said one top oil patch financier, who added that his investment bank is not advising either company. But he cautioned: “We would expect that unless [the parent company] steps up, the minority will kick and scream, so as much as it is logical, I'm not sure it's doable” because a deal may become too expensive.
A Shell Canada takeover would come as analysts forecast a massive jump this year in the company's cash flow. CIBC World Markets analyst Rob Plexman predicts the Calgary-based company, which holds a stake in the Alberta oil sands, will generate $7.97 of cash a share in 2006, compared with $4.27 in 2005.
A Royal Dutch buyout of its Canadian subsidiary would be in line with the preference of major energy players to buy reserves rather than spend their extra billions from high commodity prices on risky exploration efforts.
Many companies are shying away from committing capital to projects that could turn into money losers if crude and natural gas prices tumble significantly.
Royal Dutch did boost its capital spending plans by $4-billion (U.S.) this year to $19-billion. But the price it uses to gauge the economics of projects remains at $25 a barrel, less than half the level at which crude is now selling.
At the same time, the company has spent massive amounts to repurchase stock. Over the past year, Royal Dutch spent $5-billion buying back its own shares or those of subsidiaries — and has said it will continue that strategy in 2006.
Many foreign companies set up publicly traded Canadian subsidiaries several decades ago when nationalist sentiment ran strong. Most of these minority stakes have been bought back in recent years, and several sources report that Royal Dutch Shell is looking at joining the trend.
Foreign parents that have taken subsidiaries private include E.I. du Pont de Nemours & Co., Campbell Soup Co. and Ford Motor Co. In each case, minority shareholders pushed hard to get top dollar, often forcing the parent companies to improve their opening bids.
No outside investor owns more than 2 per cent of Shell Canada, according to data compiled by Bloomberg News. Several major mutual fund companies each hold about 1 per cent of the company.
Royal Dutch Shell sports a $205-billion market capitalization, so it could certainly afford to buy out its Canadian offspring. The question is whether the purchase would take place at a price that makes sense for the parent.
The European company is reviewing other options for its Canadian operations, according to sources in the financial sector, including additional capital investment and external acquisitions. Shell Canada's crown jewel is its 60-per-cent stake in the Athabasca Oil Sands Project. The Dow Jones wire service quoted one Shell executive as saying that some of the company's senior managers favour a minority buyout in Canada. The executive was quoted as saying further simplifying Shell's structure could help the parent boost profits.
In Europe, Shell has been through a restructuring that saw the merger of Shell Transport and Trading and Royal Dutch Petroleum, the two companies that formed the Royal Dutch Shell group since 1907.
One source said “with the new structure, it's more feasible to make a share exchange” between the Canadian and European companies. read more

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Daily Independent (Nigeria): Kukah tasks Ogoni on feud with Shell

Tuesday 3 January 2006
By Odudu Okpongete
Senior Correspondent,
Port Harcourt
Chairman of the Presidential Committee on Ogoni-Shell Reconciliation, Rev. Fr. Mathew Kukah, has urged the Ogoni people to take advantage of all opportunities offered by the reconciliation process to collectively articulate a position that would ensure lasting peace in the area.
Fr. Kukah stated this at the weekend while responding to contributions made by interest groups and stakeholders at an Ogoni stakeholders meeting at the new Brick House, Port Harcourt, on the lingering crisis between the multinational ol firm and its estranged host community.
Kukah, who was secretary at the Human Rights Violation Investigation Commission (HRVIC), popularly referred to as Oputa Panel, in 2000, and at last year’s National Political Reforms Conference, told the Ogoni, whom he described as “a very privileged people,” that such opportunity would probably not remain with them for a long time.
He expressed happiness at their commitment to true and genuine reconciliation, maintaining that their example was a challenge to other Nigerians.
“I believe you have the opportunity and the challenge to more or less produce a template that can be replicated across Nigeria,” he said, and thanked the youths particularly for their decision not to continue with the ways of the past.
The cleric agreed with the position of the people that their past conduct was based on circumstances they found themselves, pointing out that one thing the people have going for them is that they are about the only people to have never lifted a trigger against anybody save the circumstance that may confront them.
According to Kukah, “the action of the people is in keeping with the teaching of Jesus Christ and lovers of democracy and justice,” and encouraged them to keep up the good work.
He promised to deliver a letter from the Ogoni people to President Olusegun Obasanjo inviting him to grace the Ogoni Day celebration on January 4, 2006, saying that the gesture would allay fears of insincerity on resolution of the issues as expressed by President of the Movement for the Survival of the Ogoni People (MOSOP), Ledum Mitee.
Kukah, who also expressed happiness at the success of the meeting and the understanding shown by the Ogoni, thanked them for the gesture.
Earlier, the state governor, Dr Peter Odili, said the administration has embarked on some projects in Ogoniland, some of which were completed and others ongoing, and challenged the people to articulate their requests to the government before the next Ogoni Day celebration.
Odili assured that their interest would be protected and expressed confidence in Fr. Kukah’s handling of the reconciliation process between them and Shell.
He restated an earlier promise that indigenes would benefit maximally from federal industries or business interests located in the state, privatised or not, adding that the state had communicated this in writing to Mr President.
Thanking the Ogoni for honoring the invitation to the meeting on short notice and those that made contributions that would aid the process of reconciling the parties, he also lauded Kukah for his brilliance in putting across issues. read more

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Bloomberg: Shell Canada Says It's Unaware of Any Buyout Intention by Shell

Bloomberg: Shell Canada Says It's Unaware of Any Buyout Intention by Shell: Tuesday 3 January 2006
Jan. 3 (Bloomberg) — Shell Canada Ltd., the country's fourth-largest oil company, said it's unaware of any intention by parent company Royal Dutch Shell Plc to buy out minority shareholders.
Shell Canada, in a statement today on Canada NewsWire, said it was issuing the advisory at the request of the Toronto Stock Exchange. The company's shares soared 9.5 percent on Dec. 30 after the Globe and Mail reported that Shell might spend C$7 billion ($6.05 billion) to buy the remainder of Shell Canada it doesn't already own.
Shares of Calgary-based Shell Canada fell C$1.57, or 3.7 percent, to C$40.48 at 1 p.m. on the Toronto Stock Exchange.
To contact the reporter on this story:
Jon Bixby in New York at [email protected] read more

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ThisDayOnline (Nigeria): Oil Pollution: Shell Ordered to Pay N1.8bn Compensation

Tuesday 3 January 2006
A Federal High Court in Umuahia, Abia State has ordered Shell Petroleum Development Company (SPDC) to pay N549,187,568 as special damages and N1,300,000,000 as general damages to Umuorie Community in Ukwa West Local Government of Abia State for oil pollution.
Mr Justice J. T. Tsoho however, rejected the community’s request to perpetually grant an injunction restraining the company “from the horizontal flaring of gas and discharge of noxious production liquids”,stating that “it is appreciated that this order, if granted will be difficult to meet, if not impossible in the near future. This is because the areas involved are highly technical and immense expenditure will also be involved.”
On why it awarded the amount to the community represented by its counsel, Mr Lucius Nwosu (SAN) the judge held that “it is my conviction that the plaintiffs in this suit have established on the balance of evidence that the defendants (SPDC) operations at Isimiri flow station have caused environmental pollution and damage to the Umuorie community, to which the plaintiffs belong. The plaintiffs are consequently entitled to compensation on behalf of their community.”
The legal action was initiated five years ago by Nwosu, naming Chief Authur, R. John and others as plaintiffs and SPDC as defendant.
The three plaintiffs brought the suit for themselves and on behalf of the entire people of Umuorie claiming special and general damages. read more

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ThisDayOnline (Nigeria): Bonga: Shell Exports 200,000 Barrels of Oil

Posted 3 January 2006
Why BPE disqualified bids for PH refinery
By Mike Oduniyi, 01.02.2006
The count down to recovering the huge sum of money sunk into Bonga deep offshore oil field has begun as Shell announced yesterday the first shipment of 200,000 barrels of crude from the field.
In the downstream, details also emerged over the weekend why the Bureau of Public Enterprises (BPE), disqualified bids from four consortia for the acquisition of controlling stake in the Port Harcourt Refining Company (PHRC).
Shell Nigeria Exploration and Production Company Limited (SNEPCo) said in a statement that the 200,000 barrels of crude were loaded onboard a vessel named “ARION”, December 29, 2005.
In monetary terms, the export might have fetched $11.8 million (N15.34 billion) at $59 per barrel price of crude, according to Nigeria’s official figures, but all the earnings will accrue to Shell, which according to the contract guiding the development of the field, is obliged to first recover money sunk into developing the field.
Commenting on the export, the Managing Director of SNEPCo, Mr. Chima Ibeneche, said that it was significant that shipment was achieved using Bonga’s offshore loading buoy – the world’s first, largest and most technologically advanced polyester moored deepwater buoy, which was built in Nigeria by Nigerdock.
“We are delighted to be exporting crude from Bonga, following the start-up of production on November 25, 2005. It is a technological triumph that Shell is successfully producing oil and gas from Nigeria’s deepwater frontier and we have capped that achievement with today’s first shipment.
“It demonstrates Shell’s commitment to Nigeria, as one of the world’s key energy sources and today marks a major milestone for a project which will deliver long term benefits to Nigeria, to Shell and to our partners,” Ibeneche said.
Oil production at the Bonga facility is expected to ramp up to some 200,000 barrels per day (bpd) in 2006, SNEPCo stated. Peak production is, however, expected to reach 225,000 bpd of oil and 150 million standard cubic feet of gas per day.
Total cost of developing the Bonga field up to the first oil has been put at some $3.6 billion, which Shell will have to recover first, before the Nigerian government could then begin to share from the proceeds of oil exports from the field.
The increase in the $2.9 billion initial cost of the field, and the fact that the Nigerian government would not immediately benefit from the project, pitched the National Assembly against SNEPCo on several occasions with the lawmakers instituting one probe or the other on the project.
Located in Oil Prospecting Licence (OPL) 212, the Bonga concession was awarded to SNEPCo in 1993 under a Production Sharing Contract (PSC). Other partners are Esso (20%), NAE Nigerian Agip Exploration Ltd (12.5%) and Elf Petroleum Nigeria Limited (12.5%).
Meanwhile, the stalemate recorded in the attempt to sell 51 percent shares in the Port Harcourt refineries late last year, has been attributed to the non-inclusion of the foreign technical partners engaged by the local companies in bids as would-be co-owners of the plants.
The BPE had in its ruling December 19, 2005 declared that the bids submitted by Chrome/Chinese Petroleum Corporation/Essar Oil Consortium, Oando/Shell Group, Refinee Petroplus Consortium and Transnational Corporation Consortium, did not attained the minimum qualifying mark of 60 points to qualify for the opening of their Financial Bids.
The agency said that in consultation with its Advisers, it had decided to call for fresh bids from these companies and extend the deadline for a limited period of time.
THISDAY however, gathered the BPE advisers and technical team had faulted the bids submitted by the consortia where the technical partners only owned equity in management of the refineries but these partners would not hold any equity in the ownership of the plants. A senior official close to the transaction said that “When we looked at the bids, what happened is that we have a situation where they have management contract in place to run Port Harcourt, but do not have ownership contract with the foreign technical partners.
“The reality is that refining has become an attractive business since oil prices have gone up. We are looking at selling the plants not for five years, but 10, 15, 20 years. We got to look beyond five years when refining margins may decline and they would decline because middle east capacity is coming up in four years in response to the supply bottleneck”, the official said.
The BPE said it evaluated the bids technically largely on the presence within the consortia, of a competent refinery owner/operator with experience in refineries of similar complexity as Port Harcourt refinery; experience of the technical operator in the ownership, operation and management of a crude oil refining plant; and the capability to finance up to $200 million of capital expenditure by PHRC within the next three years. read more

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The Star Online (Malaysia): Malaysian assignment the longest, most enjoyable for Chadwick

“SHELL Malaysia chairman Datuk Jon Chadwick is very much like the company he heads – successful and resilient.”: Posted Tuesday 3rd January 2006
SHELL Malaysia chairman Datuk Jon Chadwick is very much like the company he heads – successful and resilient. Chadwick started his career with the Shell group as a rough and tough drilling engineer in 1978 and has never looked back since.
“I have held 16 different jobs in 13 countries in my 27½ years with the group,” he said.
His 27 years with Shell have been exemplary, with Chadwick climbing the corporate ladder to hold key positions in the group, including chief negotiator for Shell’s exploration and production division, general manager of several companies in South America and head of Shell’s mergers and acquisitions and financing division.
Having been in Malaysia for 3½ years, Chadwick admits to being very fond of the country.
“This is my longest assignment. My average so far is about two years, too short, but I would like to stay for as long as possible. I am very happy here – Malaysia is a wonderful country to work and live in,” he said.
To Chadwick, the greatest achievement in his long career with Shell is his assignment in the country. “I am very pleased with what is happening here. The team has taken Shell in Malaysia a step further – striving for a high level of excellence,” he said.
Describing himself as a man who wants every success for the group, Chadwick puts in long hours. An average working day will see him clocking in at seven in the morning and finishing only late at night.
“I also do a lot of travelling as we have 19 facilities and offices in the country. I am on the plane five times a week on most weeks. It is a very busy job; even dinner is business in Malaysia,” he said.
Having said that, he believes in spending quality time with his family. “Having two teenage sons, aged 15 and 19, makes life interesting and challenging,” he joked. His eldest son has recently started university overseas. He spends time watching DVDs with his youngest son. His favourite movies are The Shawshank Redemption, Apollo 13 and The Dead Poets Society.
“I like Morgan Freeman’s character in The Shawshank Redemption. He was a man of great humility, customer focus and interpersonal skill. His character appealed to me in the business sense.
“I also like Apollo 13, a movie on the triumph of the human spirit and technology and turning adversity into triumph,” he said.
A food enthusiast, Chadwick is full of praise for the diversity of the local food available.
“There is such variety – nasi lemak, satay, dim sum, otak-otak – and they are all so tasty,” he said.
Chadwick’s guiding philosophy in life is “to do unto others as you want others to do unto you.”
“This philosophy has helped a lot in my work and life. I also believe in a performance culture and meritocracy. By empowering people and taking risks, you will see people rising to the challenge,” he said.
Before taking up his position in Malaysia, Chadwick was a member of Shell’s gas and power executive committee with responsibility for Shell’s North American gas and global power business, and global gas and power marketing and trading activities.
He was also chairman of Coral, Shell’s North American marketing and trading affiliate, and a board member of InterGen, Shell’s power affiliate.
Currently, he sits on the boards of 13 companies and is the managing director of both Sarawak Shell Bhd and Sabah Shell Petroleum Co Ltd.
ARTICLE ENDS
COMMENT BY Alfred Donovan of ShellNews.net: We know a number former Shell Malaysian employees who would like to do to Jon Chadwick what he has done to them….
If anyone wants to put their feelings into words on this subject, please email me with your comments and they will be published on an anonymous basis provided I am satisfied with authenticity. If you are a fan of Jon Chadwick then please send me your comments. read more

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The New York Times: As Argentina's Debt Dwindles, President's Power Steadily Grows

Tuesday 3 January 2006
By LARRY ROHTER
Published: January 3, 2006
BUENOS AIRES, Dec. 30 – Just four years ago, Argentina's economy was prostrate and its politics in chaos, after a financial crisis resulted in bank deposits being frozen, the government defaulting on more than $100 billion in debt and five presidents holding office in two weeks. But on Tuesday, the country is expected to pay off the last of its debt to the International Monetary Fund and simply walk away from further negotiations with the group.
Argentina still owes tens of billions to private lenders, even after a debt restructuring in March. But the $9.8 billion payment is an important symbolic milestone and just one of several recent signs that President Néstor Kirchner appears to be concentrating more power in his own hands and steering his government to the left. Since a midterm election victory in October, Mr. Kirchner has also moved to establish an alliance with Venezuela's populist leader, Hugo Chávez, and, as a traditional Peronist, to extend the hand of the state deeper into the economy, the judiciary and the news media.
“With this payment, we are interring a significant part of an ignominious past,” Mr. Kirchner said recently, adding that the action would liberate Argentina from a supervisory body that was making “more and more demands that contradict themselves and economic growth.” That position is popular here because many Argentines believe that the I.M.F. is responsible for the policies that led to the economic crisis of 2001, and then left the country to recuperate on its own.
Mr. Kirchner, 55, took office in May 2003 having won less than a quarter of the popular vote. But he has erased memories of the crisis of 2001 and early 2002 and now enjoys record levels of public support – 75 percent or more, according to recent polls – that allow him to do largely as he pleases.
“Kirchner has resolved the problem of power and legitimacy” that the crisis created, “and so has more margin to maneuver,” said Juan Carlos Torre, a political scientist at Torcuato di Tella University here who has written extensively on Peronism, the nationalist movement formed in the mid-1940's by Juan Domingo Perón with strong working-class support. “But instead of being more generous and open, he has become more sectarian.”
Mr. Kirchner's popularity is mainly a result of three consecutive years in which the economy has grown by an average of about 9 percent. That has left him and his team confident, even cocksure: the presidential chief of staff, Alberto Fernández, told reporters just before Christmas that although the government surely made some mistakes in 2005, he would be hard pressed to name one.
But an inflationary surge is now threatening, and Mr. Kirchner has responded in statist fashion, trying to impose price controls on certain essential products. He first used that weapon in March, when he urged Argentines to buy “nothing, not even a can of oil” from Shell after company executives ignored his suggestion that they not raise prices.
Late in November, as a prelude to negotiations to control increases in food prices, he blasted owners of two of the country's biggest supermarket chains, warning them to “stop extorting us.” Supermarkets then agreed to temporary price freezes that are to expire early in 2006, but economists said they feared that the accords might be a prelude to more systematic controls if inflationary pressures did not abate.
Complaints of official pressures on the news media are also growing. In a report on what it called “indirect censorship,” the Association for Civil Rights warned this month that “the current government has made control of national media content a priority that it pursues with systematic vigor, subjecting the media to a behind-the-scenes executive siege.”
Most controversial of all, however, is Mr. Kirchner's plan, now before a Congress that recently renewed his emergency powers over the economy, to overhaul the Council of Magistrates, the 20-member panel that oversees the judiciary. Human rights groups and opposition political parties say the plan, which would cut the number of members to 13, is intended to give Mr. Kirchner greater control over judicial nominations.
“We believe this reform is unconstitutional and a step backwards,” the executive director of the Association for Civil Rights, Roberto Saba, said in an interview here, adding, “There is a sensation that the government feels stronger and wants to make its authority felt.”
In foreign policy as well, there has been a notable shift in attitudes. Argentina's relationship with the United States in the 1990's was so close that one president, Carlos Saúl Menem, called it “carnal.” But Mr. Kirchner has been moving in the opposite direction, seeking the embrace of Venezuela's leader, who has proved a perennial thorn in the Bush administration's side.
During a hastily scheduled visit to Venezuela in November, Mr. Kirchner and Mr. Chávez reached several agreements that sealed what Mr. Chávez has taken to calling “a Caracas-Buenos Aires axis.” Mr. Chávez announced plans to build a gas pipeline to Argentina and to make fuel available on highly favorable terms, an important guarantee with an energy shortage said to be looming.
Analysts say the alliance is more tactical than ideological. “For someone like Kirchner,” a native of frigid Patagonia “who doesn't have an extroverted character, Chávez is too tropical,” Mr. Torre said. Others say Mr. Chávez embodies the kind of military-nationalist alliance that Mr. Kirchner finds repugnant because of his own experiences here during the military dictatorship in the 1970's, when friends of his were killed and he was briefly detained.
The election this month of Evo Morales, a Chávez acolyte, as the president of neighboring Bolivia complicates matters even further. Mr. Kirchner has courted and encouraged the new Bolivian leader, but would see his own popularity drop if Mr. Morales's promised transformation were to go awry and degenerate into class, regional or racial conflict that, in the worst case, would send refugees spilling across Argentina's northern border and constrict the flow of natural gas to Argentina.
But Mr. Chávez has already bought more than $1 billion in Argentine bonds and, according to officials here, may be willing to buy up to $2 billion more. That, plus booming exports, has given Mr. Kirchner the latitude he needs to pay off, in one lump sum, Argentina's final obligations to the I.M.F. and to call off further negotiations on issues like monetary policy and utility rates.
Economically, the deal offers no advantages for Argentina, which will pay Venezuela interest rates more than double the 4 percent or so that Argentina has been paying the fund. But it has enhanced Mr. Kirchner's image politically, as was made clear when he summoned politicians, businessmen, labor leaders and leaders of civic groups to the presidential palace on Dec. 15 to announce that, from now on, “this country will be different; it will have political sovereignty and economic independence.”
Roberto Lavagna, who as economy minister since 2002 was the main architect of Argentina's stunning emergence from the 2001 financial crisis, had consistently urged a more cautious course regarding both the recent inflationary surge and the fund. But he was ousted in late November and replaced by a lesser-known economist, Felisa Miceli, president of the state-run Banco de la Nación, who has described herself as “a Kirchnerite soldier.”
That change was part of a broader cabinet shake-up that also brought in new defense and foreign ministers. The new defense minister, Nilda Garré, had served as ambassador to Venezuela, where she had praised Mr. Chávez and his policies. The new foreign minister, Jorge Taína, has a reputation as a nationalist who favors closer ties with the rest of Latin America, rather than an emphasis on the United States and Europe.
“What Kirchner likes is to be absolutely in charge, so he has become his own economy minister,” said Joaquín Morales Solá, chief political columnist for the conservative daily La Nación. “Even more than moving left, there's a turn towards a personalistic style of governing, with a dose of authoritarianism and hegemony and an aggressive style of permanent rupture and confrontation.”
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Lloyds List: Starling eyes Shearwater nest

Tuesday January 03, 2006
ROYAL Dutch Shell is developing a second Shearwater satellite field in the North Sea this year after submitting an environmental statement for its Starling project, writes Martyn Wingrove .
The Anglo-Dutch oil firm is seeking approval from the Department of Trade and Industry to tie back the Starling gas condensate field to its own Shearwater platform.
Shell plans to install a 33 km, 20 in pipeline from the field to Shearwater this year and begin production in 2007.
Gas will be exported to the Bacton terminal via the Seal line and condensate will be sent to the Forties pipeline system via the Marnock platform.
Discovered in 1979, Starling is in block 29'3a and has reserves of 160bn cu ft of gas and 7m barrels of condensate.
This project follows swiftly on the heels of Shell's plans to develop the Merganser field as a subsea tie-back also to Shearwater.
In October, Shell submitted its environmental statement for Merganser, including plans to install two subsea wells this summer.
Shell will also upgrade the production capacity at Shearwater to provide more room for these two satellite field developments.
It has booked Transocean's JW McLean semi-submersible to drill the Merganser wells in July to September this year and is likely to use the same rig for the Starling wells.
Shell has booked the rig and Transocean's Sedco 711 for medium-term drilling work, although it did tender for three rigs.
– ATP Oil ' Gas is set to begin gas production from its Tors project in the southern North Sea this month. The Houston-based firm said the Ensco 70 jack-up rig was close to finishing the first well on the Garrow field. Once this is completed the well will be brought on line.
ATP is also expecting first production from the L06d development in the Dutch sector this month and is hoping to bring the Gomez field on stream in the deepwater Gulf of Mexico in February. read more

royaldutchshellplc.com and its sister websites royaldutchshellgroup.com, shellenergy.website, shellnazihistory.com, royaldutchshell.website, johndonovan.website, shellnews.net and shell2004.com are all owned by John Donovan. There is also a Wikipedia article.
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