January, 2006:

By Mike Godfrey,
Washington 25 January 2006
After an appeal, Shell's retroactive tax bill in Venezuela for 2001-2004 has been cut to US$13m from US$130m. 22 companies had been assessed with more than US$650m in back taxes in total.
The government said that the companies had failed to comply with the terms of a 2001 law which imposed 16.6% royalties and 50% income tax on oil producers.
In mid-August, the authorities briefly shut down Shell's offices for 48 hours. Shell entered a new commercial agreement with state-owned Venezuelan oil company, PDVSA, last month, but it is not clear whether this has helped the company to obtain better treatment from the government.
It remains to be seen whether other companies are successful in appealing their assessments. Repsol, Petrobras, Japanese group Teikoku, and China National Petroleum Corp have signed similar agreements with PDVSA.
Last week, the head of Venezuela's tax agency revealed that foreign oil companies had so far paid $125.6 million in back taxes. last year as a result of the country's widespread audit of overseas firms operating in the nation's oil industry.
Earlier in the mon th, the agency said it was considering widening its audit of the oil companies to cover years back as far as 1993.
Before Hugo Chavez took power in Venezuela, the government offered tax incentives to oil firms in order to encourage investment at a period when oil prices were relatively low. These policies have been sharply reversed under the new regime.
However, the government of President Hugo Chavez has begun to roll back these liberal policies and force foreign companies into joint ventures with the nationalised Petroleos de Venezuela.
. read more

SIMEON BENNETT
RESIDENTS living near the Shell refinery armed themselves with buckets yesterday in an effort to get the oil giant to reduce its emissions.
The buckets contained a cheap air-sampling device which, the residents said, they would use to prove the air around the plant was unclean.
Yesterday they were testing the buckets outside the refinery with the help of American activist Denny Larsen.
Mr Larsen described the buckets as a “mechanical lung'' that was cheap and easy to use.
“The idea is to train the residents to catch that pollution and actually have data to back up their complaints,'' he said.
“Right now we've got residents breathing toxic gas, they have no idea what they're breathing, they're getting sick and nobody's doing anything about making Shell clean that stuff up,'' he said.
The residents belong to the Geelong Community for Good Life group, which today will launch a “bucket brigade'' to monitor air quality around the refinery.
Corio resident Bill Aitken said he had lived in the area for 35 years and hoped the buckets would help prompt local and state governments to do something about pollution in Geelong's northern suburbs.
Shell yesterday defended its environmental record, saying it consistently met standards set for it by the Environmental Protection Authority. read more

Joniston Bangkuai
New Straits Times (Malaysia):
KINABATANGAN, Tues. – Young residents of Kampung Batu Puteh here can look forward to a sustained income through an eco-camp project.
The eco-camp, located within the rich flora and fauna valley of the Lower Kinabatangan, will provide local and foreign tourists a place to stay in the forest. Its focus is on nature education, ecotourism and research.
Construction on the Tungog Rainforest Eco-Camp (TREC) began last year and is expected to be completed soon.
It is funded by Shell Malaysia and implemented in collaboration with the World Wide Fund for Nature (WWF) Malaysia, Raleigh International and a co-operative set up by the Batu Puteh youths, Koperasi Pelancongan (Kopel).
“It is like a dream come true for the youths involved in the project,” Kopel chairman Mohd Hashim Abdul Hamid said.
Nestled next to an ox-bow lake, the eco-camp, designed to accommodate up to 30 guests at any one time, will be managed by Kopel as a source of income for its members.
It forms part of the wider sustainable tourism project initiated by WWF-Malaysia, known as “Model Ecologically Sustainable Community Tourism” (Mescot).
Mescot has seen the Batu Puteh community getting involved in ecotourism activities such as homestays, cottage industries and boat and guide services since 1997.
Hashim, the project's prime mover, sees a brighter future for the many unemployed youths of Batu Puteh once the camp and its ancillary infrastructures are completed.
Shell Malaysia gave Kopel a seed grant of RM220,000 when it signed a Memorandum of Understanding for the project in February 2002 with WWF-Malaysia and Raleigh International, a UK-based charity.
Following months of planning and securing the necessary approvals from the relevant authorities, construction finally began some two months ago.
Designed jointly by local youths, the eco-camp was planned to minimise its effect on the surrounding forests through all aspects of its design, construction and operation.
No trees are being felled for the construction of the eco-camp; the buildings are scattered amid the existing vegetation onsite. Other basic eco-design principles include minimising energy and water usage.
No chemicals are used on site and all waste is removed, while construction materials are natural products sourced from the villages.
Expected to be a hit among local students and foreign eco-tourists, the eco-camp makes full use of the rich forest environment to enhance the visitors' experience.
Hashim said the eco-camp is designed as a platform to test the latest eco-technology such as solar power, composting toilets and alternative energy supplies.
Shell Malaysia chairman Datuk Jon Chadwick said the project was in harmony with the company's core value of helping people build a better world for themselves on a sustainable basis.
“We are further motivated because of the obvious benefits the project can bring to the conservation of biodiversity and wildlife of the Kinabatangan flood plain,” Chadwick said.
WWF-Malaysia chairman Tengku Zainal Adlin said the eco-camp would enhance the attractiveness of ecotourism in the Lower Kinabatangan area.
What inspired Shell Malaysia, WWF-Malaysia and Raleigh International to support the effort was the whole-hearted involvement of the Batu Puteh community throughout the Mescot initiative.
“The eco-camp is not only an avenue for employment but is tied closely to the ongoing community based ecotourism activities of the area,” said Raleigh International country director for Malaysia Rory Hall.
The project is showing the way for multi-stakeholder approaches on conservation and economic development. read more

Oil firm wins 'the double' yet again, writes Tony Gray
Shell comfortably retained the title of the world's leading charterer of spot clean tankers in 2005, according to figures released by New York shipbroker Poten ' Partners.
As a result, the oil major has again won 'the double,' being also last year's largest charterer in the dirty tanker trades.
Shell was responsible for 409 reported spot fixtures, an 8.4% slice of the market.
UK oil major BP was a distant runner up, retaining second place with 276 fixtures and a 5.7% share.
Oil trader Vitol, a growing force in the dirty tanker market, was once again in third position with 256 fixtures and a 5.3% share.
Although the charterers holding the gold, silver and bronze medals remained unchanged, Poten ' Partners' statistics show some interesting movement in the next seven positions in the top 10.
Citgo moved up to fourth from seventh position, and Glencore from the ninth to sixth spot.
The biggest 'loser' was Chevron, which dropped from fourth to eighth position.
The shipbroker's league table shows one newcomer, commodity trader Trafigura, in at number nine.
Poten ' Partners notes that the cumulative activity of the top 10 charterers accounted for 39% of all fixtures.
Of last year's 5,135 aframax spot fixtures, less than 10% (418) involved clean tonnage. Shell and Vitol in that order were by far the largest charterers, while the top 10 collectively produced 46% of aframax clean spot fixtures.
Of the 418 fixtures, 64%, or 268, involved cargoes from the Middle East Gulf. In 2005, Poten ' Partners lists 1,487 panamax spot fixtures, of which 549 were in the clean market.
In this segment, Shell and Vitol swapped positions, with the oil trader leading the way at 43 fixtures. The 10 leading charterers booked 43% of all panamax clean spot fixtures during 2005.
Of the total 549 fixtures, 298, or 54%, were for Middle East Gulf liftings. Last year produced 3,028 spot handymax fixtures, of which 2,661 were clean. Shell led the way with 238 fixtures, followed by BP with 153, and Citgo with 149 fixtures.
In this category, the top 10 charterers also accounted for 43% of all fixtures.
Poten ' partners comments: 'The US dominates handymax employment with 432 fixtures between the UK'Continent and the US, and 414 fixtures between the Caribbean and the US, accounting for nearly a third of all fixtures.'
Meanwhile, there were 1,087 clean spot fixtures involving small product carriers, with Shell and BP out in front.
Overall, Poten ' Partners points out that the total number of clean spot fixtures in 2005 increased by a relatively small number about 70 fixtures.
'Looking ahead in 2006, the number of fixtures is expected to be well above 2005 levels as refining capacity in the US remains at full capacity, requiring increased imports to meet incremental demand,' the broker concludes.
'Moreover, continued growth in clean products demand in India and China will account for more cargoes, although future expansion of refinery capacity may eventually have an impact on the product supply' demand balance.' read more

Lorna Siggins, Marine Correspondent
Former Dutch prime minister Wim Kok is among a high-level delegation from Royal Dutch Shell's board which is canvassing local opinion in north Mayo today on the 900 million Corrib gas project.
The delegation, representing Royal Dutch Shell's social responsibility committee, will also meet western TDs in the Dail tomorrow during its two-day visit to Ireland.
Travelling with Mr Kok are Nina Henderson, former president with US food company Bestfoods, and Maarten van den Bergh, a managing director with Shell, chairman of the board of directors of Lloyds TSB group and non-executive director of BT group and British Airways plc.
In a related development, the final report by Advantica consultants on the safety of the project's high-pressure onshore pipeline has been given to Minister for the Marine Noel Dempsey, but the Minister has deferred plans to publish it until he receives advice on its recommendations. read more

Lorna Siggins, Marine Correspondent
Former Dutch prime minister Wim Kok is among a high-level delegation from Royal Dutch Shell's board which is canvassing local opinion in north Mayo today on the 900 million Corrib gas project.
The delegation, representing Royal Dutch Shell's social responsibility committee, will also meet western TDs in the Dail tomorrow during its two-day visit to Ireland.
Travelling with Mr Kok are Nina Henderson, former president with US food company Bestfoods, and Maarten van den Bergh, a managing director with Shell, chairman of the board of directors of Lloyds TSB group and non-executive director of BT group and British Airways plc.
In a related development, the final report by Advantica consultants on the safety of the project's high-pressure onshore pipeline has been given to Minister for the Marine Noel Dempsey, but the Minister has deferred plans to publish it until he receives advice on its recommendations. read more

By REUTERS
PORT HARCOURT, Nigeria (Reuters) – Eight policemen and one civilian were killed on Tuesday when an armed gang in military fatigues attacked the offices of Italian oil company Agip in Nigeria and robbed a bank.
It was not clear if the attack in the southern city of Port Harcourt was by the same group which has kidnapped four foreign oil workers and crippled a tenth of Nigerian oil output during a month-long campaign of violence in the world's eighth largest exporter.
“An armed gang in military attire attacked the Agip offices,'' a security source said.
The group of 20 to 30 men, armed with AK-47 assault rifles, arrived at the company's compound in two speed boats, engaged police in a lengthy shootout and robbed a bank on the premises, he added.
A Reuters eyewitness who arrived at the scene shortly after the gunfight saw the corpses of eight police and one civilian being loaded into ambulances. Others were injured.
In Milan, the company confirmed the nine deaths and said in a statement that it had “temporarily evacuated staff and contractors from the area of the base affected by the incident and situation is currently under control.''
The raid on Agip, a unit of Italy's ENI, came at a time of heightened alert in Western multinationals in the Niger Delta, which pumps almost all of Nigeria's 2.4 million barrels a day.
Militants from the Movement for the Emancipation of the Niger Delta have attacked two major oil pipelines and abducted four workers ago from a Royal Dutch Shell platform. Output is down by 221,000 barrels a day.
SECRET AGENTS
Nigerian secret agents detained two government officials suspected of helping the kidnappers on Monday, raising hopes of a breakthrough in the case.
Government officials have expressed confidence the hostage crisis would soon end as negotiations progress on a ransom payment with a person whom they believe to be a credible representative of the kidnappers.
However, the militants have said they are not in talks to release their American, British, Honduran and Bulgarian captives and denounced the negotiators as bounty hunters.
“The hostages are going nowhere!'' the group said in an email on Tuesday.
An Ijaw activist said the previously unknown movement contained two different groups: a politicised faction carrying out the attacks on oil installations and a more commercially minded gang holding the hostages.
With nine days since its last confirmed raid, the group has repeated threats to broaden its attacks on oil workers and installations across the delta. Dozens of people have already been killed in a campaign which helped pushed world oil prices to four-month highs last week.
Unions have threatened to withdraw workers from the restive region if the security situation deteriorates.
The militant group said it was preparing for an assault by the Nigerian army and had moved the four hostages deeper inside the delta's maze of mangrove swamps for their own safety.
It reiterated that it would keep the hostages until it wins the release of two high-profile Ijaw prisoners: militia chief Mujahid Dukubo-Asari and former Bayelsa state governor Diepreye Alamieyeseigha, impeached for money laundering last month.
It is also seeking $1.5 billion from Shell to be paid to delta villages in compensation for oil spills. read more

MEMBERS of the Shell to Sea campaign last week picketed the headquarters of Mayo County Council in Castlebar to highlight their concerns over water quality and environmental issues arising from site works at the company’s proposed Bellanaboy terminal, writes Christy Loftus.
The protestors claim that works carried out to date by the company pose a risk to the water quality in Carrowmore Lake which is the source of domestic supply to thousands of homes in the Erris area.
They are demanding that the local authority examine existing conditions in the area and are seeking assurances with regard to the water filtration system which Shell is constructing on the site.
The protestors claim that runoff from the site, from which vast quantities of peat have been removed, is a threat to the water quality and fish life in Carrowmore Lake.
They argue that Shell had committed to providing the filtration system in two to three weeks last October but still had not delivered on the promise.
Ms Mary Corduff, wife of Willie Corduff, one of the five Rossport men who recently spent 94 days in Cloverhill Prison because of his opposition to the upstream pipeline, said the main objective of the picket was to get a commitment from the council to inspect the ongoing works and to reassure the community about water quality,
One of the group, Mr. John Monaghan said contaminated water is still running off the site and has been since early October. He questioned the role of the Project Monitoring Committee; the Environ-mental Protection Agency; the Regional Fisheries Board; Mayo County Council and the Department of the Marine and Natural Resources.
“The local people are monitoring the monitors and they are doing nothing,” he said.
Another protestor, Terence Conway explained that the group had decided to picket the County Council offices to highlight their concerns. “It is the only way left open to us,” he declared.
• Last Sept the council wrote to Shell requiring them to address concerns about pollution of waterways in the vicinity of the site and threatened to take action under the Local Government Water Pollution Acts.
In late October Shell, in a press statement, confirmed that the delivery and installation of the of the filtration equipment (to address the run-off problem) had commenced and that the testing and commissioning should be completed in a matter of two to three weeks.
It is understood that the water treatment units will be up and running in the next few days. read more

Four directors of Shell Oil are due to meet with west of Ireland TD's this week, it emerged this afternoon.
The delegation, which will include former Dutch Prime Minister Wim Kok, is expected to try to advance progress on the Corrib gas field.
The meeting, scheduled for Leinster House on Thursday, is likely to involve Government deputies.
Independent TD Jerry Cowley has been at the forefront of the anti-pipeline campaign, and he said no representative of anti-pipeline groups had been invited to have talks with the company.
“If they did want to seriously address the safety concerns and issues, well then they should certainly be outlining who they're going to meet,” he said.
“It would appear that people have been contacted who are very much pro the gas, this is seen as a softening of the ground before a final onslaught to impose their will.” read more

HONIARA, Jan 24 Asia Pulse – The recent announcement by oil company, Shell of its planned withdrawal from the Pacific, including the Solomon Islands, is disappointing says caretaker Prime Minister Sir Allan Kemakeza.
Sir Allan said it is disappointing from the perspective of the region's loss of a major international company.
Last year Shell announced its withdrawal from the smaller Pacific Island states with claims that it wanted to concentrate on bigger projects.
Sir Allan said Shell has clearly stated the commercial reasoning for its business decision and the Solomon Islands Government respects that decision.
“The government recognizes the current decision to withdraw must be viewed in light of the Pacific market size relative to other global opportunities for Shell.
“The government acknowledges the commitment Shell has made to the country over many decades, including its support during several difficult years.”
Sir Allan added that the government anticipated that Shell would continue an association with Solomon Islands via supply of oil products to the successful purchaser of Shell's business.
Shell's existing business is a large and economically critical operation, and its sale presents an opportunity for local business to participate in this essential industry, Sir Allan said.
“Government policy consistently advocates local talent and ownership, and encourages Shell to give priority to suitable local businesses with the capability to purchase and manage the business as a going concern.
“At the same time, it is important that an appropriate level of competition is maintained in the industry to avoid any undesirable monopoly outcomes caused by Shells withdrawal,” Mr Kemakeza said.
(Pacnews) read more

LOUISE HOSIE
THE deaths of two oil workers on board a North Sea rig were “entirely avoidable”, an inquiry has heard.
It was claimed that a series of failures by the oil giant Shell led to Keith Moncrieff 45, of Invergowrie, near Dundee, and Sean McCue, 22 of Kennoway in Fife, dying on a utility leg of the company's Brent Bravo platform on 11 September, 2003.
The pair had gone to inspect a temporary repair on a leaking pipe, when they were overcome by a release of hydrocarbon gas.
The fatal accident inquiry, which began at Aberdeen Sheriff Court last October, was ordered by Lord Advocate Colin Boyd.
During closing submissions yesterday, the procurator fiscal, Ernest Barbour, said: “The deaths on the Brent Bravo of Sean McCue and Keith Moncrieff could, and should, have been avoided. The tragic events that occurred were entirely avoidable.”
He added that this was due to Shell's failures to follow certain procedures and “fundamentally flawed thinking” in the system being used.
The inquiry had earlier heard that a temporary patch had been placed on the leaking pipe nearly a year before the incident on the platform.
When Mr Moncrieff and Mr McCue went to inspect it, a broken valve led to the release of up to 2.5 tonnes of gas.
“This whole tragedy may have been avoided if the patch had been replaced earlier,” said Mr Barbour.
Sheriff Colin Harris heard that, since the Brent Bravo deaths, there had been changes and improvements in Shell's operating procedures.
The inquiry continues. read more

By Austin Ekeinde
January 24 2006 at 09:54AM
Yenagoa – Nigerian militants dissociated themselves on Monday from “bounty hunters” negotiating with authorities for the release of four foreign hostages, raising the possibility of divisions within the group.
Officials had expressed hope the hostages could soon be released after receiving a recent photograph of the oil workers on Sunday from a person they believed was a credible go-between with militants.
Authorities met the representative again on Monday to pursue ransom discussions, a government spokesperson said, despite an email from the group to Reuters saying they were not involved in the talks.
'These individuals are making a lot of money from the Nigerian government'
“These individuals are making a lot of money from the Nigerian government and oil companies pretending to be in a position to facilitate their release. They are going nowhere. Rather we intend to add to their number,” the email said.
The government has paid $77 000 (about R460 000) to the group to negotiate the hostages' release, it added.
An ethnic Ijaw activist familiar with the situation said there were two different groups within the militant movement: a politically motivated band responsible for attacks on oil installations and a commercially motivated one holding the hostages.
“At the end of the day the hostages' release could just be about money, but the attacks on the oil facilities will continue,” he said, asking not to be named.
The Movement for the Emancipation of the Niger Delta, which said it was a coalition of militant groups in the delta, abducted the workers during a month-long campaign of violence which has cut Nigerian oil output by one tenth and pushed world oil prices to their highest level since September.
Bayelsa State Police Commissioner Hafiz Ringin said that he believed the person claiming to represent the kidnappers was a “genuine contact”.
The photograph provided by this person showed the hostages – an American, a Briton, a Bulgarian and a Honduran – in apparently good health and sporting beards, indicating it was taken recently, diplomats said.
A group of 10 youths attacked an oil platform operated by Agip, a unit of Italy's ENI, on Monday but were repelled by troops.
A security official said one person was killed in the raid, which appeared to be caused by a local dispute over money. Oil output was unaffected.
Unions have threatened to withdraw workers from the restive delta, which produces almost all the nation's 2,4 million barrels per day, if the security situation deteriorates.
Dozens of people have been killed in raids and bombings by the militia.
Royal Dutch Shell has cut its production by 210 000 barrels a day and pulled out more than 500 staff. Hundreds of contractors have also fled.
The militant group has insisted that it will not compromise on its demands for the release of two ethnic Ijaw leaders, more local control over oil revenues, and $1,5-billion (about R9-billion) in pollution compensation to delta villages from Shell.
“We are going ahead with the planned attacks aimed at grounding the Nigerian economy and further hurting the oil companies,” the group said in am email on Monday.
Its key demand is the release of militant leader Mujahid Dokubo-Asari and former Bayelsa state governor Diepreye Alamieyeseigha.
Alamieyeseigha, impeached last month for money laundering after escaping arrest in Britain, is a political foe of the president and a major scalp in his war on corruption. Asari is on trial for treason after leading a bloody insurgency in 2004.
Industry sources say the political aims of the militants mean attacks may last until elections next year. An uprising before 2003 polls hit 40 percent of Nigeria's oil production.
Additional reporting by Tom Ashby and Tume Ahemba read more

Press Release: Shell New Zealand
Safety Comes First At Shell
The health and safety of Shell staff, site staff and customers is the number one priority for Shell New Zealand, and to reinforce its importance, Shell is rolling out a safety-training programme across its 220-strong company owned retail network.
Entitled Hearts & Minds, the programme is an extension to Shell's existing world class training processes, which aim to make Shell sites safer for site staff and customers.
“Hearts & Minds is about putting the safety of site staff and customers first,” says Shell's Retail General Manager Rob Mahoney. “Safety remains our number one priority across all of our New Zealand operations.”
Mr Mahoney said the number of incidences of abuse, violent and aggravated robberies and attacks occurring at retail sites are a continuing concern.
“Shell is investing more than $2 million dollars over the next 18 months on improving the security features at our sites to make sure they are safer, and our sites are less attractive to robbers.”
The improved security features included anti-jump wires on some sites, eight-camera digital CCTV systems, world class “intelligent” cash safes, monitored emergency alarms at all sites, mobile alarm pendants for staff, as well as changes inside the shop to enhance site staff security.
“While we are making physical improvements to our retail sites, most importantly, the Hearts & Minds program is focused on site staff training,” said Mr Mahoney.
“Hearts & Minds teaches site staff how not put themselves at risk and it also equips site staff with modern tools and training to keep themselves and their customers' safe.”
The training encompasses a DVD which includes detailed advice on what to do in certain circumstances such as a robbery or intimidation, and includes real-life experiences as told by current site staff.
Hearts & Minds is being rolled out over the next month at all Shell operated service stations in New Zealand. In selected areas, local police representatives will be attending launches of the new safety training.
Hearts & Minds is a global initiative that puts health and safety first across all of Shell's operations, and Shell New Zealand has developed the New Zealand-specific training programme from Shell's world leading initiatives and resources.
In addition to Hearts & Minds, Shell has also improved its overall incident reporting system across its retail network to now record all incidents that occur on sites.
“We record all incidences on the basis that “what gets reported, gets fixed,” said Mr Mahoney. “While we have seen an increase in reported safety incidents, largely due to the improved incident reporting from sites, we believe the underlying safety performance is improving.”
In a selected number of areas, Shell is also trialling a follow up procedure to recover costs as a result of petrol thefts and drive-offs. read more

OIL and Natural Gas Corp of India has set its sights on developing up to 28 small and marginal fields off the country's coast over the next three years.
ONGC is India's largest hydrocarbon producer and wants to take advantage of high prices by developing as many projects as possible in a fast track process.
'We are in the process of developing these 28 fields. We are assessing the feasibility of this project,' said ONGC's general manager Ramashish Rai.
'We hope to get approval and begin development activities by March this year,' added the head of new and marginal field developments.
ONGC hopes to get a minimum production of 5-8m tonnes of oil and 15-20m cu m of gas from these 28 fields, starting in 2008.
First ONGC needs to find partners to help develop these fields before it can progress with these plans, said a spokesperson. An early choice for a partner could be Shell, which signed a memorandum of understanding last week regarding co-operation in upstream and downstream projects.
ONGC is looking at a hub and spoke solution, that could involve a floating production system deployed on the Indian west coast, plus it is also looking at developing small fields off the east coast.
Meanwhile, ONGC is hoping to deploy a temporary replacement production system over the Bombay High field, where last year it lost a large production platform.
The state oil group expects to deploy a floating production system over the field by the end of March this year and to have production of 75,000 barrels per day through this unit by the end of June, said a spokesperson. read more

BG GROUP has farmed into a Nigerian deepwater block to extend its upstream focus around the Atlantic Basin, writes Martyn Wingrove .
The London-listed energy firm has taken a 45% interest in block 332 in the western Niger Delta and signed a production-sharing contract with Nigerian National Petroleum Corp.
BG Group took the interest from Sahara Energy Exploration ' Production, which still retains another 45% stake in the block it gained in August 2005 during the country's licensing round.
The other partner in the block, which lies in water depths of 100 m and 1,000 m, is Seven Energy Nigeria, holding the remaining 10%.
'Nigeria is a prolific hydrocarbon province, which fits well with our market-focused Atlantic Basin strategy,' said BG's vice-president for the Mediterranean and Africa, Stuart Fysh.
He thinks BG Group will build its presence in the country's energy sector further from this early position.
A spokesperson confirmed BG was looking for more investment opportunities after failing to gain blocks in last year's licensing rounds.
On block 332 there will be two phases of exploration, with a seismic survey shot this year followed by at least one exploration well.
BG Group has an agreement with Nigeria Liquefied Natural Gas to take 2.5m tonnes of LNG per annum for 20 years from the Bonny plant. The first of these shipments to the Lake Charles import terminal in Louisiana left Nigeria this month.
BG also has a memorandum of understanding with US major Chevron, London-listed Shell and NNPC to jointly develop an LNG facility near Olokola, in the western delta area.
Block 332 lies 50 km southwest of the proposed LNG plant site.
– Chevron has spudded the first exploration well in the joint development zone between Nigeria and S'o Tome with the hope of finding another large oilfield in the Gulf of Guinea.
The US oil major has taken Transocean's drillship Deepwater Discovery to probe the Obo prospect in JDZ block 1. The well is in 1,750 m of water and is likely to take 60 days to drill and test.
Chevron has a 51% stake in the block, ExxonMobil has 40% and Dangote Energy Equity Resources holds the rest. read more

Production plummets by 10% because of field shutdowns and delayed company drilling plans, writes Martyn Wingrove
NORWEGIAN oil production is well into decline after a disappointing year for one of the world's top exporters, but gas output is climbing consistently.
Field shutdowns, late arrival of developments and lack of drilling rigs meant oil production from the Norwegian continental shelf was down 10% last year.
Figures from the Norwegian Petroleum Directorate showed oil production fell to 148.4m cu m, or 2.45m barrels per day, in 2005, compared with 162.8m cu m the year before.
The NPD blamed the loss of production from the large Snorre field in the northern North Sea early in the year, plus late start-up of the Kristin field in the Norwegian Sea for the lower than expected output levels.
There were also delays to oil company drilling plans as a result of the shortage of rigs and strikes by offshore workers.
The government directorate expects oil production to fall again this year to 141m cu m, or 2.4m bpd, its lowest since the mid 1990s due to the lack of fresh oil developments.
Its medium term prediction is output rising a little in 2007 and remaining at 152m cu m until 2009, while production of natural gas liquids and condensates will continue rising to 2010.
'Stable oil production is expected in the period 2006-2010. It is estimated that a total of 735m cu m will be produced, which is 100m cu m less than the previous five-year period,' said the NPD in its latest report.
The slowing stream of new field developments is a big problem for the Norwegian government, which relies heavily on taxes and export revenues.
Last year saw the start of just two fields with hydrocarbon liquids, Kristin and Urd, both in the Norwegian Sea.
This year could see the start of Enoch and Blane, both lying across the UK boundary and operated by Paladin Resources, being gobbled up by Canadian independent Talisman Energy.
The lack of new projects means the NPD expects 97% of the oil produced to 2010 will come from maturing fields already on line now.
Although there were delays to operations, investment on the NCS grew to NKr83bn ($12.36bn) last year, NKr16bn more than the year before.
A large slice of this investment went on two gas projects, which are not due on stream until next year, including Norsk Hydro' Shell's Ormen Lange and Langeled pipelines, plus Statoil's Snohvit development in the Barents Sea.
The NPD forecasts a similar level of investment in projects this year, around NKr81bn, with more of this going into existing fields improved recovery programmes.
Last year the Ministry of Energy and Petroleum received 16 plans for development and operation for oil and gas projects on the NCS. It anticipates receiving another 10 PDOs for new projects this year, including several amended development plans for existing fields.
The slowdown in drilling activity in recent years has left operators with fewer projects to undertake so investment levels will be falling over the next five years to around NKr63bn in 2010.
Completion of Ormen Lange, Langeled and Snohvit projects will also mean expenditure levels will return to levels last seen in the 1990s.
The directorate forecasts total capital investment of NKr366bn for the five years to 2010, 43% of this in production wells, 19% for modifications to existing platforms, 20% to the construction of new offshore infrastructure and 18% for pipeline and land facilities.
Norwegian drillers had plenty of success last year from a record low number of drilled exploratory wells, but most of the discoveries were outside the frontier areas.
Twelve exploration wells were spudded in Norway last year, nine were wildcats and three were appraisal wells. This activity resulted in six discoveries, three in the North Sea and the rest in the Norwegian Sea.
'The results are considered good with discoveries in new areas and discoveries in new plays in mature areas,' said the NPD in its latest report.
Hydrocarbon volumes discovered made up half of the oil and gas produced in Norway in 2005.
'The resource growth from exploration activities is in the range of 3-16m cu m of oil and 39-119bn cu m of gas,' said the state directorate.
'Compared with 2004, this constitutes an increase in resource growth.'
Norsk Hydro was the most successful of the Norwegian drillers, bagging four discoveries including its Stetind gas discovery in the Norwegian Sea.
This opens up the area for finding more gas resources that could eventually be linked to existing infrastructure such as the Asgard export pipeline.
The Oslo-listed group also found one gas and two oil fields in the North Sea last year with its Astero, Peon and Oseberg J wells.
Astero lies north of the Troll oil field, where two production semi-submersibles could act as hubs for any satellite development.
The Peon well was interesting for the NPD and Hydro as it was the shallowest reservoir found to be potentially commercial and it opens up a new exploration play in the North Sea.
State oil firm Statoil also made a Norwegian Sea gas discovery with wildcat well 6302'6-1, although it is thought to be small at present.
Norske Shell perhaps found the largest field last year with the Oryx discovery in the Norwegian Sea.
It found up to 50bn cu m of gas with the wildcat well 6406'9-1 and is likely to follow this up with an appraisal well this year.
The NPD figures do not take into account Eni's recent discovery of more oil at the Goliat field with an appraisal well in the Barents Sea.
The Italian oil company now has around 250m barrels of recoverable oil and gas resources in Goliat after drilling well 7122'7-3 with Ocean Rig's semi-submersible Eirik Raude this month.
Oil companies have new opportunities for exploring for hydrocarbon resources this year and into 2007 following the award of licences in two rounds, both successful in attracting new players.
The pre-defined acreage licence round known as APA 2005 resulted in the award of 45 production licences to 26 companies in areas around existing infrastructure.
The energy ministry's 19th licensing round, covering frontier areas of the Norwegian and Barents Seas, led to applications for new acreage from 24 companies, with the award of blocks expected in March this year.
With drillers having a 50% success rate in Norway we can look forward to a raft of new discoveries and potential new projects this year. read more

Statoil and partners in talks with Gassco as part of proposal to increase output capacity via Kollsnes, writes Martyn Wingrove
STATOIL and state firm Gassco are planning to build another pipeline across the North Sea to transport more gas from the giant Troll field.
The Oslo-listed oil group is talking with project partners Norsk Hydro, Shell, Total, ConocoPhillips and Gassco about building a new pipeline to supply European markets with gas from other parts of the Troll field.
Statoil wants to raise daily production capacity at the Troll offshore platform and the onshore processing plant at Kollsnes, near Bergen, by 40m cu m.
It is planning to target the rest of the Troll East gas followed by the large volumes in the Troll West area, where two floating production platforms are recovering the oil resources.
Gas in Troll, Norway's largest field, is piped to Kollsnes where natural gas liquids and condensates are extracted, with the gas exported to Europe through the Zeepipe system.
The additional gas resources would be enough to justify building a new pipeline from Kollsnes either to continental Europe or to the UK, possibly via Norwegian offshore infrastructure at Sleipner or Draupner.
Statoil's chief executive Helge Lund thinks the reserves in the rest of the Troll field are similar to those under development at Norsk Hydro's Ormen Lange project in the Norwegian Sea.
That project is due on line in 2007 with exports via the Langeled pipeline to the UK via Sleipner.
'Statoil wants the remaining gas in Troll to be landed at Kollsnes with daily capacity at this facility and on Troll A raised by 40m cu m,' Mr Lund told delegates at the Norwegian Petroleum Society's oil policy seminar.
'That would open opportunities for laying a new export pipeline from Kollsnes to Europe or the UK.'
Last year Statoil increased production capacity at Troll from 85m cu m to around 110m by installing new modules on the platform.
Development of the gas resources in Troll West needs to be performed with delicacy as over-production would harm oil recovery and output levels.
Statoil intends to submit a plan for development and operation for this next phase of Troll's development in 2007 and could begin production by 2010.
For this project schedule, Statoil and Gassco will need to be laying the offshore pipelines in 2008 and 2009, so will need to secure pipelay and support vessels for these activities.
'The new pipeline could be used to help develop the smaller fields around Troll or to link with a pipeline from the northern seas,' Statoil manager Kristofer Hetland told Lloyd's List.
The state oil company is investigating a development of the fields in the Gjoa area north of Troll with a new floating production platform and will need pipeline capacity to markets.
Its rival Norsk Hydro has discovered new fields in that area also and is looking to develop them as satellites to the Troll field, via the Fram subsea facilities.
– Statoil has shut down production from the Visund platform in the North Sea after a gas leak in the flare pipe, where a large hole has appeared.
The Petroleum Safety Authority will investigate the leak, which forced Statoil to evacuate the platform on January 19.
Statoil thinks a large volume of gas flowed from a 50 cm diameter hole in the pipework leading to the flare stack.
The Oslo-based firm had to halt production immediately. Last week it returned production to the Asgard B, Krisin and Mikkel gas condensate fields in the Norwegian Sea after smoke was seen coming from the exhaust of a gas compressor. read more

By Carola Hoyos
Published: January 24 2006
As Saleh al-Ajmi clasps the antiquated little red wheel on oil well B473, the vast, dusty expanse of the world's second largest oil field unfolds behind him.
“I love Burgan,” the Kuwaiti engineer says with a pride and tenderness usually reserved for girlfriends, not oil fields. But Burgan has earned his devotion. It is perhaps the world's best-behaved reservoir. It has produced more than 28bn stock tank barrels of oil in the last 60 years with only minimal investment in new technology.
Oil rises to the ground naturally and once there, gravity sends it down Burgan's gentle slope to the storage tanks below. Mr al-Ajmi and his colleagues have had to do little more than watch and maintain the equipment that was installed by the Anglo-Iranian Oil Company (now BP) and Gulf Oil (now Chevron) in the 1940s and 1950s and bequeathed to Kuwait when the industry was nationalised in 1975.
But the days of easy oil are over. Even the great Burgan field is beginning to falter and will no longer compensate for stalling oil production in the north of the country, where the oil fields are ageing more quickly. After many years in which it did not have to look beyond its borders for help, the country is being forced to seek the advanced equipment and managerial skills only foreign oil companies can supply.
“We will need the technology,” Mr al-Ajmi acknowledges, although he is more reluctant to concede that Kuwait's state oil company will also need foreigners to run what has been named Project Kuwait. Last month Sheikh Ahmad Fahad Al-Ahmad Al-Sabah, Kuwait's oil minister, warned: “For production to reach 4m barrels a day by 2020, it is a must. It is a must from the technical side.”
Kuwait is not alone. From the Middle East to the North Sea, and Alaska to Latin America, the large oil fields on which the world has come to rely to fuel its economic expansion since the second world war are requiring increasingly advanced technology and know-how to coax their last oil barrels to the surface.
Whether or not Kuwait and its fellow petrostates, in particular Saudi Arabia and Mexico, invest enough – in many cases by turning to foreign companies for support – will be the biggest factor in determining the oil price in the coming decades. Iran and Iraq are the other key players but there foreign investment is necessarily limited by international politics and security issues. So companies and consumers alike have particular reason to worry about the outcome of the Kuwait debate.
It has also underlined the recent shift in the balance of power between national and international oil companies. The national oil companies are flexing their muscles at home and, increasingly, abroad, arguing that service companies such as Halliburton and Schlumberger can give them all the technical support they need. But Kuwait and other countries whose oil reserves cannot be reached without sophisticated technology reveal the flaws in that model.
Meanwhile, being allowed back into Kuwait is arguably as important for the future of the big international energy groups as Project Kuwait is for the country itself. ExxonMobil, Chevron and BP each lead a consortium of companies that have already agreed to bid on the 20-year project.
They must remain on tenterhooks for some time longer, however. Parliament had been due to begin debating the issue yesterday. But the succession dispute set off by the death of Sheik Jaber Al-Ahmad Al-Sabah, the country's emir, has again delayed matters, with oil industry insiders warning that Project Kuwait could be pushed back a year if the turmoil leads to a change of energy minister.
Technocrats first mooted Project Kuwait in 1991. But the country was too busy rebuilding the wells and equipment torched by Saddam Hussein's army in the retreat from its invasion the previous year. Most of Burgan's facilities had been ruined, 445 wells were set ablaze and another 191 were damaged.
Mr al-Ajmi still remembers the 45 days of occupation when his wells were surrounded by unexploded mines and he made his daily inspections under the disconcerting gaze of Iraqi soldiers. To this day Gathering Centre 14 stands as a monument to the destruction – a graveyard of charred and mangled pieces of metal jutting out against the power blue sky like huge Victorian paper silhouettes. “I had worked at this gathering station from 1988. I remember every place of it, each piece. Where the control room was,” says Mr Al-Ajmi, his voice trailing off as he turns away to point his sunglasses to the empty spot where it once stood.
It was February 1993 before Kuwait's oil industry was back to pre-war levels. But it would take another decade to convince Kuwait's ruling elite to back the $8.5bn plan to almost double the oil production of the northern fields with the help of international companies.
Nader Sultan, the former chief executive of Kuwait Petroleum Corporation and adviser to seven past oil ministers, recalled that one, seeking support for the plan, liked to ask: “Why would you want to be the camel? A major oil company can be the camel while you can sit on it and ride it.” (Today the camel race is fiercer than ever as Kuwait and its neighbours compete to cash in on the high demand and oil prices generated by China's growth.)
But with eight changes of oil minister in 15 years Project Kuwait went from delay to delay. Finally, at the end of last year, the majority in parliament looked ready to agree – only for the vote to be delayed yet again.
The outcome remains far from assured. Kuwait is rare in the Middle East in having a powerful parliament. But the absence of political parties means the government does not have a built-in majority. Leo Drollas, deputy executive director at the Centre for Global Energy Studies, the London-based consultancy, asserts: “What you are seeing in Kuwait are the problems with democracy.”
Many parliamentarians opposing the project hope to wring favours from the government in return for their support. Much, however, will depend on whether the oil minister stays in his post as the succession battle between rival members of Kuwait's ruling family unfolds. If he remains, Mr Nader forecasts he will be able to push the issue through parliament by this summer.
But while the politicians procrastinate, the technical challenges engineers face at Kuwait's northern fields, 100 kilometres from the capital, grow ever larger. The fields make up 10 per cent of the country's reserves and produce about 500,000 barrels a day, one-fifth of Kuwait's total output. By 2025, Kuwait hopes they will make up closer to one-quarter of production so that more of Burgan's oil can be kept for later generations.
Estimates suggest that, by using sophisticated technology, the amount of oil ultimately recovered from the field could be boosted from 40 to 60 per cent of available reserves. It is a statistic to gladden the heart of international oil companies, including Europe's BP and Royal Dutch Shell, and the US's ExxonMobil and Chevron, which have honed their skills in places such as the US Gulf of Mexico and the North Sea.
This expertise is the best hope of persuading countries such as Kuwait that the companies must again be given access. Removing, cleaning and disposing of the millions of barrels of water the north fields will produce every day as they come to the end of their lives, is more than Kuwait's oil company can handle, its engineers and executives say.
Kuwait's experience in other fields has shown engineers that one delicate task – pushing oil to the earth's surface by injecting this water back into an ageing reservoir that has lost its natural pressure – is also better left to well-practised international oil companies (IOCs), says Hosnia Hashim, a senior executive of Kuwait Oil Company.
If they are kept out, not only will there be serious delays but some reserves may be lost entirely, warns Ahmed al-Arbeed, head of Project Kuwait. One analyst, Stewart Johnston, of Cambridge River Associates, the consultancy, adds: “The three most important things international oil companies can provide for national oil companies are: access to advanced technology, teaching employees how to use that technology, and creating jobs.”
It is crucial for the oil majors' future that they win the day. With few, if any, big oil fields left to find, the big western companies are facing shrinking production and reserves. They are forced to venture into riskier spots such as the harsh terrain of Siberia's Sakhalin island where extracting a barrel of oil can cost 6-7 times as much as it does in Kuwait.
Returning to Kuwait would not be an immediate boon because the contract's terms are too restrictive. But regaining a foothold in the Middle East is of great strategic importance, explains Alastair Bee, who spent six years working in Kuwait for BP.
“[For] any big oil company, having part of its portfolio in the Middle East is a big plus because 10 years on, it's the place to be.” Kuwait, Iran, Iraq, United Arab Emirates and Saudi Arabia hold two-thirds of the world's oil reserves. UAE has reached out to foreign oil companies for help.
But for big corporate oil, Saudi Arabia, home of the world's biggest oil reserves and Ghawar, its largest field, is the grand prize. It is for this reason that Saudi Arabia has long bristled at the idea of needing outside help. Its fields face some of the same challenges as those in Kuwait. But Saudi Arabia, unlike its smaller neighbour, has had a stronger drive to make Saudi Aramco, its state oil company, the most sophisticated in the world.
When Gulf Oil and the Anglo-Iranian Oil Company left Kuwait, “they left us with the body, but took away the brains”, Khalid Yousef Al Fulaij, head of Kuwait Oil Company in the 1990s, famously declared.
But in Saudi Arabia, Exxon and Mobil left behind some of the brains – Saudi Aramco had inherited expertise from its foreign counterparts. The kingdom has been working to advance its industry through training, international exchanges and technology research ever since. It can now argue more robustly than any other oil state that its national company needs no help. Kuwait is far from being able to make the same claim.
For now, the talk is only of letting foreigners into the northern fields, but Mr al-Arbeed told the Financial Times last month: “If North Kuwait is a success, everyone will be happy to see another success in other reservoirs.” Perhaps not everyone will rejoice. Mr al-Ajmi is fiercely proud of what he and his colleagues have achieved, especially since 1991.
As he bends down to inspect a puddle of crude oil below his well, he maintains that Kuwaitis could handle Burgan without help. As his head pops back up, he is holding a sample of oil. He sniffs it and says: “Hmm, smells . . beautiful.” read more

By Caroline Merrell, Banking Correspondent
SIR VICTOR BLANK’S expected arrival to the chairmanship of Lloyds TSB in May will help to improve the profile of the bank among City investors, sources said yesterday.
Despite turning around Scottish Widows, its life insurance subsidiary, and growing profits from corporate banking, the bank’s share price has failed to reflect recovery with investors holding the shares for the generous dividend.
It is thought that Sir Victor will devote most of his time to Lloyds once the demerger of GUS — where he is also chairman — is complete. After the split, Lloyds is expected to be his only FTSE 100 chairmanship. His arrival could hasten the sale of the funds management division of Scottish Widows, sources said yesterday.
The bank has been in the midst of turning round Scottish Widows, which it bought for more than £7 billion at the top of the market. However, despite the fact that the insurer paid a dividend to Lloyds for the first time last year, advisers claim that it still could be sold or merged with another asset management division.
The bank recently held talks with Fortis, the Dutch bank, about creating a joint venture in investment management. The talks are believed to have stalled but, according to some banks, a complete sale could be on the agenda.
Yesterday shareholders in Lloyds gave a cautious welcome to Sir Victor who is succeeding Maarten van den Bergh, who has been head of the bank since 2000. One top-ten shareholder said: “We are viewing it as a net positive. We have not met him, but he does seem to be the sort of person who could be better than the present chairman.” Mr van den Bergh, who was at Royal Dutch Shell, was hired to carry out a cross-border banking deal. The deal eluded the bank as it struggled with Scottish Widows and was forced to address a number of mis-selling problems.
Another shareholder said: “It is hard to form a view until we meet him, but he has done some good things at GUS.” Sir Victor was chairman of Charterhouse, the investment bank, as well as a director Royal Bank of Scotland, a rival to Lloyds.
One analyst said that his negotiating skills would be useful if the British bank eventually fell to either an American bank — such as Bank of America or Citigroup — or to BBVA, the Spanish bank that is on the acquisition trail.
The arrival of a new chairman could lead to a review of the bank’s dividend policy — the stock yields 7 per cent, which makes it popular with funds that invest to produce income. The bank has maintained the dividend despite a dip in profits five years ago.
A banker who has worked closely with Sir Victor said: “He is a very tough operator. One thing is for sure, he is unlikely to sit around and do nothing.”
Analysts pointed out that Eric Daniels, chief executive, has made considerable headway in turning round Lloyds TSB’s fortunes, but this had not yet been reflected in the share price performance. One said: “He may be able to sell the Lloyds TSB message more fully to investors.”
The bank recently hired Terri Dial, an American banker and veteran of Wells Fargo, to run its retail division. Ms Dial has been bought in to raise service standards at the bank which has been struggling to compete with HBOS in the UK.
BLANK THE DEALMAKER
1971: co-author of Weinberg and Blank on Takeovers and Mergers read more

By Paul Farrow (Filed: 25/01/2006)
The Association of Private Client Investment Managers and Stockbrokers has fired off letters to the head of every FTSE350 company urging them not to snub private investors in corporate deals.
With merger and acquisition activity on the rise, Apcims fears that private investors could be left out of pocket when companies restructure – as happened last year when Royal Dutch merged with Shell Transport & Trading. The letter also coincides with the flotation of Qinetiq, the government-owned defence company, which excludes private investors.
Angela Knight, the chief executive of Apcims, said: “Investors have fallen off companies' radar. Shareholding is not just for institutions. ”
Knight is calling for companies to use loan notes to help investors mitigate capital gains tax bills and to give greater voting rights to nominee shareholders. She said: “It is unfair that, as a result of company reorganisation, merger, or takeover, private investors face CGT bills where there has been no change of ownership in the underlying shares. It is noticeable that some plcs have made sure that loan notes are available while others have not.”
Last year the Sunday Telegraph revealed that hundreds of shareholders in Royal Dutch faced huge CGT bills as a result of the Shell merger. Shell eventually backed down by offering loan notes but the deal came too late for many who had already agreed to swap their old shares for equity in the unified company. read more

(Filed: 25/01/2006)
Stockbrokers are outraged that Joe Public is to be excluded from the float of the defence group. But, as Paul Farrow reports, this is only the latest in a series of snubs to private investors
Stockbrokers are up in arms following the move by Qinetiq, the Government-controlled defence group, to exclude the British public from its impending float. They say it is yet another in an increasing number of cases where private investors are being discriminated against.
Gunning for shares: brokers are outraged that private investors are excluded from Qinetiq's float
The Ministry of Defence, which is selling its 50.6 per cent stake, has ruled out an offer to the public because it is expensive to administer while the business is “complex and unusual” and does not lend itself to the British Gas “Tell Sid” and BT offers of the 1980s.
The Association of Private Client Investment Managers and Stockbrokers says the trend of small shareholders being marginalised is a major concern. Last year many shareholders of mmO2 and Shell Transport & Trading were discriminated against, the association added.
It has now fired off letters to the bosses of all FTSE350 companies to remind them to bear in mind private shareholders should an expected pick-up in M&A activity cause them to alter their corporate structures and issue new shares.
Angela Knight, chief executive of Apcims, says the Qinetiq excuse of the IPO being costly is “spurious” and is a mixed message from a Government apparently committed to encouraging share ownership. “It is nothing like as costly as Qinetiq has implied. Individuals use the internet and electronic means these days. There is time for them to change their minds,” she says.
The UK Shareholders' Association has branded the decision by the Government to exclude private investors as “patronising and arrogant”, while Gavin Oldham at the Share Centre is equally outraged.
“The chancellor says he wants a share-owning democracy – this is not the way to achieve it,” says Oldham. “The way it's been done denies private investor access at the offer price, it also requires them to make their purchase in the secondary market subject to stamp duty. As a result, the company's capital structure is polarised towards institutions, resulting in an illiquid secondary market. This is not good for the health of democratic capitalism.”
“Millions of people latched on to the privatisation dream in the 1980s and 1990s but at the time, new issues were required to offer at least 25 per cent of shares to the public. This is no longer the case,” says Oldham.
“The rule was changed as a result of persistent pressure from investment banks and corporate brokers. The effect is now clearly visible as the great majority of new issues are made as placings,” he adds.
The storm over the Qinetiq IPO comes with brokers urging the Government to take a fresh look at all the deterrents to direct share ownership – tax, shareholder's rights, lack of access to new issues. For example, they say that people are increasingly investing in companies by trading in contract for differences rather than shares. CFDs do not incur stamp duty, while trading in shares costs a punter 0.5 per cent of the value of shares bought.
Another major bug bear of brokers is the rights of private investors who hold shares in a nominee account. Brokers say investors who choose to use a nominee company should be enfranchised as if they hold full legal title. In other words, they should get the perks, the annual report and the invitation to meetings.
But they do not always get the same rights. For example, small nominee shareholders in mmO2 were not allowed to apply for the cash alternative in the mobile phone company's share swap offer when it rebranded itself as O2 last March.
The O2 offer involved either a straight share swap or a cash alternative at a 5p premium to the share price. But only shareholders whose names were listed on mmO2's share register were eligible for the cash alternative. Nominee investors did not get the opportunity to accept the cash offer because they were not named individually on the share register.
The issue of nominee rights is high on the agenda because the number of such investors is increasing by the day: 85 per cent of shares owned by private investors are held electronically in nominee accounts.
However, only the registered shareholders – which include investors with share certificates – are automatically sent interim and annual reports and accounts, for instance. Only registered investors are invited to annual meetings and, importantly, are allowed to speak and vote.
In addition, most nominee investors miss out on shareholder perks. For example, nominee shareholders in Eurotunnel do not qualify for discounts of up to 30 per cent off their fares. Many people with nominee accounts don't even have a choice about how their shares are held. Shares in Isas and Peps, for instance, have to be held in nominee names.
Bosses are keeping their fingers crossed that nominee investors may be given equal rights in the Company Law Reform Bill, which had its second reading 10 days ago. But Oldham wants an amendment in the Bill because as it stands the disenfranchisement would be voluntary and not compulsory. “If companies are given the choice, I fear that the situation we have today will remain.” read more

The deaths of two oil workers on board a North Sea rig were “entirely avoidable”, an inquiry has heard.
A series of failures by oil giant Shell had led to Keith Moncrieff and Sean McCue losing their lives, the Fatal Accident Inquiry (FAI) heard.
Mr Moncrieff, 45, of Invergowrie, near Dundee, and 22-year-old Mr McCue, of Kennoway in Fife, died on a utility leg of the company's Brent Bravo platform on September 11, 2003.
The pair had gone to inspect a temporary repair on a leaking pipe when they were overcome by a release of hydrocarbon gas.
The FAI, which began at Aberdeen Sheriff Court last October, was ordered by Lord Advocate Colin Boyd.
During closing submissions on Monday procurator fiscal Ernest Barbour said: “The deaths on the Brent Bravo of Sean McCue and Keith Moncrieff could and should have been avoided. The tragic events that occurred were entirely avoidable.”
He added that this was due to Shell's failures to follow certain procedures and are “fundamentally flawed thinking” in the system being used.
The inquiry had earlier heard that a temporary patch had been placed on the leaking pipe nearly a year before the incident on the platform.
When Mr Moncrieff and Mr McCue went to inspect it, a broken valve led to the release of up to 2.5 tonnes of gas. “This whole tragedy may have been avoided if the patch had been replaced earlier,” said Mr Barbour.
He added that some workers believed the pipe had only contained “oily water” and that nothing had been done in the past to try and fix the damaged valve despite it having a history of failure in the past. read more

The deaths of two oil workers on board a North Sea platform were “entirely avoidable”, an inquiry has heard.
A fatal accident inquiry (FAI) was told that a series of failures by oil giant Shell had led to Keith Moncrieff and Sean McCue losing their lives.
The pair were overcome by a massive gas escape while inspecting a repair on the company's Brent Bravo platform in 2003.
The FAI, which began at Aberdeen Sheriff Court last October, was ordered by Lord Advocate Colin Boyd.
Mr Moncrieff, 45, of Invergowrie, near Dundee, and 22-year-old Mr McCue, of Kennoway in Fife, died on a utility leg of the platform on 11 September.
The oil firm Shell was fined £900,000 following their deaths.
'Flawed thinking'
During closing submissions on Monday, Ernest Barbour, procurator fiscal, said: “The deaths on the Brent Bravo of Sean McCue and Keith Moncrieff could and should have been avoided.
“The tragic events that occurred were entirely avoidable.”
He added that this was due to Shell's failures to follow certain procedures and “fundamentally flawed thinking” in the system being used.
The inquiry had earlier heard that a temporary patch had been placed on the leaking pipe nearly a year before the incident on the platform.
When Mr Moncrieff and Mr McCue went to inspect it, a broken valve led to the release of up to 2.5 tonnes of gas.
“This whole tragedy may have been avoided if the patch had been replaced earlier,” said Mr Barbour.
Mr Barbour said when Mr Moncrieff and Mr McCue went to inspect the patch, the platform had been started up, despite there being knowledge that a number of valves were not operating properly.
Sheriff Colin Harris also heard that since the Brent Bravo deaths there had been changes and improvements in Shell's operating procedures.
This included clear and thorough risk assessments being carried out before beginning work on a hydrocarbon or safety critical line and discouraging any delay in maintenance work. read more

Mail & Guardian Online (South Africa)
Dulue Mbachu
Lagos,
Nigeria
Militants holding four foreign hostages in Nigeria claimed on Sunday they would release the captives soon, according to a statement purportedly from the militant group.
The hostages — an American, a Briton, a Bulgarian and a Honduran — were seized near a Shell oil field on January 11 by a group that also claimed responsibility for other oil industry attacks that have cut Nigerian production by almost 10%.
“We promise that they would soon join their families, hale and hearty enough to tell the true story of a revolution,” the statement e-mailed to The Associated Press (AP) said.
The identity of the e-mail's authors could not be independently confirmed and no name was attached to it. But the statement came from an e-mail address known to be used by the Movement for the Emancipation of the People of the Niger Delta, which has claimed responsibility for a series of recent attacks on the country's oil
industry.
On Saturday, the group's leader told the AP by telephone that American hostage Patrick Landry was sick and warned that if he dies, his group would kill the remaining hostages.
The militants are demanding the release of two imprisoned figureheads of their ethnic Ijaw group and have threatened more attacks on oil facilities. They claim to be fighting for a greater local share of oil wealth they believe is being unfairly snapped up by foreign companies and the federal government.
One day after the four oil workers were seized, a major Shell pipeline leading to its Forcados export terminal was blown up the following day, and more attacks followed in other areas.
Shell — the largest oil producer in Opec member Nigeria — has evacuated hundreds of workers from the Niger delta since the unrest began. The company has cut off production amounting to nearly 10% of Nigeria's crude output.
On Friday, the US State Department called for the release of the four captives, while a British diplomat said his country was pressing Nigeria not to use force to free them.
The militants are demanding the government release militia leader Mujahid Dokubo-Asari and former Bayelsa Governor Diepreye Alamieyeseigha. They are also demanding $1,5-billion in compensation from Shell for alleged environmental
damage.
Dokubo-Asari was jailed in September on treason charges, while Alamieyeseigha faces extradition to Britain, after jumping bail there on charges of money laundering.
The kidnapped workers are employed by two companies contracted by Shell in the delta: Britain's Ecodrill and Tidewater of Louisiana.
Nigeria, Africa's leading oil producer, exports 2,5-million barrels of oil daily and is the fifth-biggest source of United States oil imports.
The crisis, along with concern over the Iranian nuclear dispute and new threats of attacks on the United States by al-Qaeda, has helped push world oil prices up. On Friday, light, sweet crude for February delivery rose 54 cents to $67,35 a barrel in electronic trading on the New York Mercantile Exchange by afternoon in Europe. – Sapa-AP read more

By REUTERS
Published: January 23, 2006
Filed at 2:51 p.m. ET
YENAGOA, Nigeria (Reuters) – Nigerian militants dissociated themselves on Monday from “bounty hunters'' negotiating with authorities for the release of four foreign hostages, raising the possibility of divisions within the group.
Officials had expressed hope the hostages could soon be released after receiving a recent photograph of the oil workers on Sunday from a person they believed was a credible go-between with militants.
Authorities met the representative again on Monday to pursue ransom discussions, a government spokesman said, despite an email from the group to Reuters saying they were not involved in the talks.
“These individuals are making a lot of money from the Nigerian government and oil companies pretending to be in a position to facilitate their release. They are going nowhere. Rather we intend to add to their number,'' the email said.
The government has paid 10 million naira ($77,000) to the group to negotiate the hostages' release, it added.
An ethnic Ijaw activist familiar with the situation said there were two different groups within the militant movement: a politically motivated band responsible for attacks on oil installations and a commercially motivated one holding the hostages.
“At the end of the day the hostages' release could just be about money, but the attacks on the oil facilities will continue,'' he said, asking not to be named.
The Movement for the Emancipation of the Niger Delta, which said it was a coalition of militant groups in the delta, abducted the workers during a month-long campaign of violence which has cut Nigerian oil output by one tenth and pushed world oil prices to their highest level since September.
Bayelsa State Police Commissioner Hafiz Ringin told Reuters he believed the person claiming to represent the kidnappers was a “genuine contact.''
The photograph provided by this person showed the hostages — an American, a Briton, a Bulgarian and a Honduran — in apparently good health and sporting beards, indicating it was taken recently, diplomats said.
AGIP ATTACK
A group of 10 youths attacked an oil platform operated by Agip, a unit of Italy's ENI, on Monday but were repelled by troops. A security official said one person was killed in the raid, which appeared to be caused by a local dispute over money. Oil output was unaffected.
Unions have threatened to withdraw workers from the restive delta, which produces almost all the nation's 2.4 million barrels per day, if the security situation deteriorates. Dozens of people have been killed in raids and bombings by the militia.
Royal Dutch Shell has cut its production by 210,000 barrels a day and pulled out more than 500 staff. Hundreds of contractors have also fled.
The militant group has insisted that it will not compromise on its demands for the release of two ethnic Ijaw leaders, more local control over oil revenues, and $1.5 billion in pollution compensation to delta villages from Shell.
“We are going ahead with the planned attacks aimed at grounding the Nigerian economy and further hurting the oil companies,'' the group said in am email on Monday.
Its key demand is the release of militant leader Mujahid Dokubo-Asari and former Bayelsa state governor Diepreye Alamieyeseigha.
Alamieyeseigha, impeached last month for money laundering after escaping arrest in Britain, is a political foe of the president and a major scalp in his war on corruption. Asari is on trial for treason after leading a bloody insurgency in 2004.
Industry sources say the political aims of the militants mean attacks may last until elections next year. An uprising before 2003 polls hit 40 percent of Nigeria's oil production. read more

Letter From Nigeria
By LYDIA POLGREEN
Published: January 23, 2006
ABIDJAN, Ivory Coast, Jan. 21 – The past week was a busy one for Olusegun Obasanjo, the Nigerian president. There he was Monday morning, beaming as Liberia's new president took the oath of office, cementing a peace Mr. Obasanjo had worked to build. And here he was Wednesday, perched on a settee and clasping the hand of the president of Ivory Coast, Laurent Gbagbo, trying to put out the flames engulfing that country as militant youths rampaged against the United Nations and France.
Nigerians protested against a state governor in November in the Niger Delta, a volatile region that has been racked by corruption and violence.
By week's end he was preparing to head to Khartoum for a meeting of the African Union, of which he is the departing chairman, to weigh in on the long list of crises besetting the continent at the moment: brutal warring in the Darfur region of Sudan, political violence in Ethiopia and bellicose posturing between Chad and Sudan, to name a few.
But two crises unlikely to make the agenda in Khartoum are the ones Mr. Obasanjo faces at home: one in the Niger Delta and the other on the country's contentious political scene. Those fraught situations are tearing at the delicate threads that hold together the ethnic and religious crazy quilt of vast, populous Nigeria – about twice the size of California, with a population nearing half that of the United States.
In the always volatile delta, fresh violence from militants seeking more local control over oil wealth has slashed oil production and helped send prices to a four-month high. The militants, from the delta's dominant Ijaw tribe, have attacked pipelines and captured four oil workers, demanding that the government release two of their jailed leaders and $1.5 billion from Shell, Nigeria's biggest oil producer. [On Sunday, a militant group, the Movement for the Emancipation of the Niger Delta, promised more attacks if their leaders were not freed, and threatened in an e-mail message that it could hold the hostages for years, Reuters reported.]
The political crisis has emerged from widespread speculation that Mr. Obasanjo will seek to alter the Constitution in order to run for a third term in 2007, a possibility that Mr. Obasanjo has not ruled out. The crisis has already upset the delicate ethnic and religious balance in national politics, with each group staking a what it believes is an ironclad right to claim the presidency. Nigeria, despite its history of dictatorial military rule within its borders, has long been an enforcer and guarantor of democracy in Africa, a role that Mr. Obasanjo has expanded.
Its troubles come at a time when the stakes for Africa could not be higher. With crucial elections scheduled in many countries this year and next, including Congo, Uganda, Ivory Coast and Nigeria, the fulcrum between democracy and good governance and autocracy and tyranny could shift significantly.
And so the prospect of new ferment in Nigeria could reverberate with deep and lasting impact.
Nigeria's Nobel laureate and longtime pro-democracy agitator, Wole Soyinka, recently declared that he and his fellow activists must prepare to head “back to the trenches” of the struggle, so grave is the current threat.
“Even the incurable optimists, as some of us are, are deeply worried,” said Kayode Fayemi, director of the Center for Democracy and Development in Nigeria, a political scientist and longtime pro-democracy activist. “Six years down the line in the attempt to build democracy this is what we get: violence in the land, and a government in breach. The only thing happening is politics. It is motion without movement.”
Political violence of the type that preceded the country's elections in 1999 and 2003 appears to be on the rise as well. The wife of a prominent northern politician was found stabbed to death in her home. Nothing was taken from the house, according to Nigerian newspaper reports, leading many to conclude that her killing was a warning to her husband, Abubakar Rimi, a crucial member of a coalition of powerful northerners opposed to any extension of Mr. Obasanjo's rule.
Nigeria's vice president, Atiku Abubakar, a former general and northerner, would like to succeed Mr. Obasanjo, but the president has made it clear that he opposes that, and a deepening political row in the governing party has broken out over the succession question.
In the complex ethnic politics of Nigeria, factions have emerged in the People's Democratic Party urging that the presidency shift to a different ethnic group. Ruled for most of its history by Muslim generals from the north, Nigerians in the South-South, as the Niger Delta is known, say it is their turn, while northerners say that after two terms of Mr. Obasanjo, a Yoruba Christian from the southwest, they should get the presidency again.
The two crises are not entirely separate. The political confusion has created the space for delta militants seeking more local control over oil wealth to seize the national stage. Attacks on oil facilities and kidnappings have long been used to extort jobs, development projects and cash from oil companies, but the latest violence appears to be political in nature and pure sabotage, a worrying development, according to Sebastian Spio-Garbrah, an analyst at the Eurasia Group, a private research firm.
Taken together, these situations pose a huge challenge for Nigeria as it enters a period of great uncertainty. Indeed, nearly 46 years after its independence, a period in which the country seesawed between civilian and military rule, the unity of Nigeria is still by no means assured. Though it is undoubtedly among the most powerful, wealthy and influential African nations – South Africa is its only serious rival in this regard – it has always struggled to make sense of its volatile mix of cultures, languages, religions and even landscapes. In its awesome diversity, it is the whole of Africa in microcosm.
“Nigerian unity is only a British invention,” said the northern politician Abubakar Tafawa Balewa, in 1948, 12 years before independence made him Nigeria's first federal prime minister.
Of course a lot of water has passed under the bridge since then. The searing experience of the Biafran War, a brutal conflict in which Mr. Obasanjo played a crucial role in ending as a junior army officer, has long given Nigerians contemplating secession pause. And the discovery of oil in the 1950's in the delta has given Nigeria an economic logic for unity for decades.
Still, a report on the future of sub-Saharan Africa published by the National Intelligence Council, a government think tank for the United States intelligence services, after a conference on the topic last March, identified the collapse of Nigeria as the most important risk facing Africa today.
“While currently Nigeria's leaders are locked in a bad marriage that all dislike but dare not leave, there are possibilities that could disrupt the precarious equilibrium in Abuja,” the report said. “If Nigeria were to become a failed state, it could drag down a large part of the West African region.”
“Further,” it continued, “a failed Nigeria probably could not be reconstituted for many years – if ever – and not without massive international assistance.”
Nevertheless, Nigeria has along history of ferment, but also a long history of pragmatism that has kept it together despite its troubles.
“This is a very critical moment for Nigeria,” Mr. Fayemi said. “But we have a history of going to the edge, then pulling back from the brink.” read more

E-mail gives son of a captive from Houston area renewed hope
Associated Press
LAGOS, NIGERIA – Militants holding four foreign hostages in Nigeria claimed Sunday they would release the captives soon, according to a statement purportedly from the militant group.
The hostages — a Houston-area man, a Briton, a Bulgarian and a Honduran — were seized near a Shell oil field on Jan. 11 by a group that also claimed responsibility for other oil industry attacks that have cut Nigerian production by almost 10 percent.
“We promise that they would soon join their families, hale and hearty enough to tell the true story of a revolution,” the statement e-mailed to the Associated Press said.
The statement came from an e-mail address known to be used by the Movement for the Emancipation of the People of the Niger Delta, which has claimed responsibility for attacks on the country's oil industry.
On Saturday, the group's leader said that the American hostage, Patrick Landry, was sick and warned that if he dies, his group would kill the remaining hostages.
Landry's son, Dwight, said Sunday he had seen a recent picture of his father and the other hostages and believed all were still alive.
Landry said he was encouraged by the group's apparent pledge to release his father.
“I certainly hope that's the case,” he said.
The militants are demanding the release of two imprisoned figureheads of their ethnic Ijaw group and have threatened more attacks on oil facilities. read more

Strong Profits Again Expected,
But Challenges Await Industry;
Dodging Capitol Hill's Bullet
By JEFFREY BALL
Staff Reporter of THE WALL STREET JOURNAL
January 23, 2006; Page C1
How long will the gusher last?
Most oil companies are likely to shatter records when they post fourth-quarter earnings over the next several days. But the market already is looking beyond those results to the challenges the industry will face trying to maintain its boom.
Those are many. There is the difficulty of repeating last year's stellar rate of earnings growth given that oil prices, though they jumped last week on fears about potential supply disruptions in Iran and Nigeria, aren't expected to achieve the percentage gains in 2006 that they did in 2005.
There also is the possibility of renewed pressure in Washington for higher taxes on industry profits as this year's midterm congressional elections approach.
And there is the continuing challenge of finding enough new oil and natural gas to replenish what the industry is pumping out of the ground.
Other industries, of course, would love the oil patch's problems. Last year, riding soaring oil and natural-gas prices, the Dow Jones Oil & Gas Index racked up a 32% return, more than seven times the return of the Dow Jones U.S. Total Market Index and more than double the return of any other industry-specific Dow Jones index.
Some sectors within the energy industry — notably dedicated refiners, which turn crude oil into finished products like gasoline and heating oil — saw their stock prices more than double, partially because last year's hurricanes knocked out much of the nation's refining capacity, sending the market prices of those finished products soaring.
Moreover, though the high prices prompted much consumer bellyaching, they didn't meaningfully damp consumption. U.S. gasoline demand slipped below year-earlier levels when pump prices spiked immediately following the hurricanes, but now it is back above year-earlier levels, according to the Energy Information Administration.
ConocoPhillips is scheduled to kick off the major oil companies' fourth-quarter reporting when it releases its results Wednesday. Fadel Gheit, oil analyst at Oppenheimer & Co., sees average fourth-quarter earnings gains of 25% for the major international oil companies, 86% for the smaller firms that focus on exploration and production, and more than a doubling for refiners. Mr. Gheit owns stock in Exxon Mobil Corp., BP PLC, Royal Dutch Shell PLC, Chevron Corp., ConocoPhillips and Devon Energy Corp. Oppenheimer doesn't have investment-banking relationships with oil companies.
As for 2006, it is likely to be another good year for the energy industry, though probably not as good as 2005. The administration predicts that the price of West Texas Intermediate crude oil this year will average $63.27 a barrel. That would mark a 12% rise from last year's average price. While that is a significant jump, it is nothing like the 36.3% price surge in 2005 over 2004. Even if concerns about possible supply disruptions push crude prices this year higher than the EIA predicts, that jump would have to be significant to match the price surge that the oil industry enjoyed in 2005 over 2004.
For natural gas, the EIA forecasts an average residential price this year of $14.57 per thousand cubic feet, up 14.5% from last year, a bit weaker than the 18.6% price jump in 2005 over 2004.
According to Oppenheimer's Mr. Gheit, annual 2006 earnings are expected to jump 7% for the majors, 30% for the exploration-and-production independents and 10% for the refiners.
An industry sector worth watching will be refining. Analysts expect that refining profit margins generally declined in the fourth quarter from soaring third-quarter levels, but they also predict strong refining margins in the coming year, particularly as new federal regulations requiring cleaner fuel take effect.
One wild card is what happens on Capitol Hill. In November, after oil companies reported record posthurricane earnings, Congress held hearings on whether to restore a “windfall-profits” tax on the industry and called oil executives to testify in front of television cameras. Most of those proposals have faded away, but not all.
Still on the table are two provisions that would effectively raise the tax bills primarily of five major oil companies: Exxon, Chevron, BP, Shell and ConocoPhillips. The provisions have passed the Senate but not the House. One would reduce the companies' ability to trim their tax bills through a longstanding inventory-accounting method known as “last-in, first-out,” which ties the cost of goods sold to the cost of the most-recent purchases. The other would prohibit the oil companies from continuing to claim credits against their U.S. tax bills for the taxes they pay in certain oil-rich countries where they operate.
Kenneth Cohen, Exxon's vice president for public affairs, says the company sees the tax proposals as a “serious” threat. Exxon says today's high oil prices are based on market factors beyond the company's control, and the company isn't trying to take advantage of consumers.
Despite the industry's expressions of concern, many analysts say such anti-oil legislation has little chance of becoming law. Oil companies “pretty much have dodged the bullet. Most of the political rhetoric in Washington has died down,” says Jennifer Rowland, oil analyst at J.P. Morgan. She doubts the House will endorse the Senate-approved tax provisions targeted at the oil industry. Ms. Rowland doesn't own stock in any of the companies she covers. J.P. Morgan has investment-banking relationships with Exxon, Chevron and several other oil companies.
Longer term, perhaps the biggest issue facing the energy industry is its increasing difficulty finding enough new fossil fuel each year to replace what it is producing. In 2004, several oil companies failed to book enough new “proved reserves” to replenish the oil and natural gas they produced, at least according to the reserves-accounting method favored by the Securities and Exchange Commission. The oil industry, arguing the SEC's accounting method is too pessimistic, is trying to persuade the SEC to change its method.
Oil companies typically report their reserve-replacement ratios in the weeks following their fourth-quarter earnings reports. Generally, smaller companies find replacing their reserves easier than bigger companies, because they have a lower annual production level that they have to cover.
Write to Jeffrey Ball at [email protected] read more

By THE ASSOCIATED PRESS
Published: January 22, 2006
Filed at 6:55 p.m. ET
LAGOS, Nigeria (AP) — Militants holding four foreign hostages in Nigeria claimed Sunday they would release the captives soon, according to a statement purportedly from the militant group.
The hostages — an American, a Briton, a Bulgarian and a Honduran — were seized near a Shell oil field on Jan. 11 by a group that also claimed responsibility for other oil industry attacks that have cut Nigerian production by almost 10 percent.
''We promise that they would soon join their families, hale and hearty enough to tell the true story of a revolution,'' the statement e-mailed to The Associated Press said.
The identity of the e-mail's authors could not be independently confirmed and no name was attached to it. But the statement came from an e-mail address known to be used by the Movement for the Emancipation of the People of the Niger Delta, which has claimed responsibility for a series of recent attacks on the country's oil industry.
On Saturday, the group's leader told the AP by telephone that the American hostage, Patrick Landry, was sick and warned that if he dies, his group would kill the remaining hostages.
Landry's son, Dwight, said Sunday he had not heard of any new developments, but said he had seen a recent picture of his father and the other hostages and believed they were all still alive.
Landry said he was encouraged by the group's apparent pledge to release his father.
''I certainly hope that's the case,'' he said.
The militants are demanding the release of two imprisoned figureheads of their ethnic Ijaw group and have threatened more attacks on oil facilities. They claim to be fighting for a greater local share of oil wealth they believe is being unfairly snapped up by foreign companies and the federal government.
The kidnapped workers are employed by two companies contracted by Shell in the delta: Britain's Ecodrill and Tidewater of Louisiana.
The crisis, along with concern over the Iranian nuclear dispute and new threats of attacks on the United States by al-Qaida, has helped push world oil prices up.
Associated Press writer Jessica Bujol contributed to this report from New Orleans. read more

By THE ASSOCIATED PRESS
Published: January 23, 2006
Filed at 12:13 a.m. ET
SINGAPORE (AP) — Oil prices rose to open the week above $69 a barrel on supply fears linked to Iran's tense diplomatic standoff with the West over its nuclear ambitions and continuing labor unrest in oil-rich Nigeria.
Light, sweet crude for March delivery rose 57 cents to $69.05 a barrel in electronic trading on the New York Mercantile Exchange. The contract on Friday jumped $1.52 to settle at $68.35 a barrel, the highest closing price since Sept. 1, just days after Hurricane Katrina made landfall.
Crude oil prices are nearing the record high of $70.85 a barrel on Aug. 30.
Nymex February heating oil gained 1.28 cents to $1.8800 a gallon while gasoline rose 1.15 cents to $1.8285 a gallon.
Analysts said market participants were concerned Iran's dispute with the West over the restarting of its nuclear program could lead to supply disruptions in the second-largest oil producer within the Organization of Petroleum Exporting Countries, or OPEC.
Such geopolitical worries, which have driven crude oil prices up at a time when global petroleum demand is high and the emergency supply cushion is thin, have overshadowed rising oil inventories and mild winter weather in the United States — factors that would normally depress prices.
''Participants are making the calculations that these elements (rising inventories and mild weather) must recede in importance as the potential for supply disruption increases, and demand, in the absence of widespread economic contractions, will be high enough to strain the world's capacity to meet it,'' said John Kilduff, an analyst at brokerage Fimat USA, in a note to clients.
Iran exports roughly 2.5 million barrels per day — 1 million barrels more than current excess production capacity worldwide.
After Iran broke U.N. seals at a uranium enrichment plant and said it was resuming nuclear research after a two-year freeze, the Europeans on Jan. 12 declared talks at a dead end and called for Iran's referral to the U.N. Security Council.
The International Atomic Energy Agency's board of governors will meet Feb. 2 to discuss whether to refer Iran to the Security Council.
''The geopolitical drama over Iran and Nigeria is sending oil prices upwards,'' said energy analyst Victor Shum of Purvin & Gertz in Singapore. ''But Nigeria is more problematic in the short term, because it has actually disrupted supply.''
In Nigeria, militants holding four foreign hostages claimed Sunday they would release the captives soon, according to a statement purportedly from the militant group.
The hostages — an American, a Briton, a Bulgarian and a Honduran — were seized near a Shell oil field on Jan. 11 by a group that also claimed responsibility for other oil industry attacks that have cut Nigerian production by almost 10 percent.
Natural gas fell 2.67 cents to $9.085 per 1,000 cubic feet. read more

BY DULUE MBACHU
Militants holding four foreign hostages in Nigeria claimed Sunday they would release the captives soon, according to a statement purportedly from the militant group.
The hostages _ an American, a Briton, a Bulgarian and a Honduran _ were seized near a Shell oil field on Jan. 11 by a group that also claimed responsibility for other oil industry attacks that have cut Nigerian production by almost 10 percent.
“We promise that they would soon join their families, hale and hearty enough to tell the true story of a revolution,” the statement e-mailed to The Associated Press said.
The identity of the e-mail's authors could not be independently confirmed and no name was attached to it. But the statement came from an e-mail address known to be used by the Movement for the Emancipation of the People of the Niger Delta, which has claimed responsibility for a serious of recent attacks on the country's oil industry.
On Saturday, the group's leader told the AP by telephone that American hostage Patrick Landry was sick and warned that if he dies, his group would kill the remaining hostages.
The militants are demanding the release of two imprisoned figureheads of their ethnic Ijaw group and have threatened more attacks on oil facilities. They claim to be fighting for a greater local share of oil wealth they believe is being unfairly snapped up by foreign companies and the federal government.
One day after the four oil workers were seized, a major Shell pipeline leading to its Forcados export terminal was blown up the following day, and more attacks followed in other areas.
Shell _ the largest oil producer in OPEC member Nigeria _ has evacuated hundreds of workers from the Niger delta since the unrest began. The company has cut off production amounting to nearly 10 percent of Nigeria's crude output.
On Friday, the U.S. State Department called for the release of the four captives, while a British diplomat said his country was pressing Nigeria not to use force to free them.
The militants are demanding the government release militia leader Mujahid Dokubo-Asari and former Bayelsa Governor Diepreye Alamieyeseigha. They are also demanding US$1.5 billion (A1.2 million) in compensation from Shell for alleged environmental damage.
Dokubo-Asari was jailed in September on treason charges, while Alamieyeseigha faces extradition to Britain, after jumping bail there on charges of money laundering.
The kidnapped workers are employed by two companies contracted by Shell in the delta: Britain's Ecodrill and Tidewater of Louisiana.
Nigeria, Africa's leading oil producer, exports 2.5 million barrels of oil daily and is the fifth-biggest source of U.S. oil imports.
The crisis, along with concern over the Iranian nuclear dispute and new threats of attacks on the United States by al-Qaida, has helped push world oil prices up. On Friday, light, sweet crude for February delivery rose 54 cents (A0.45) to US$67.35 (A55.81) a barrel in electronic trading on the New York Mercantile Exchange by afternoon in Europe. read more

By Daniel Flynn
ABUJA (Reuters) – Nigerian officials raised hopes a Briton and three foreign hostages could soon be released after receiving a recent photograph of the oil workers at a meeting on Sunday with a representative for the militants holding them.
The hostages were abducted from an offshore oilfield on January 11 by militants who have demanded the release of two ethnic Ijaw leaders and waged a month-long campaign of sabotage against oil facilities in the world's eighth largest exporter.
Diplomats were cautiously optimistic the photograph and meeting signified progress in the 11-day-old hostage crisis, but expressed some doubts about government assurances that it would be over within days.
“The (state) governor is saying that it should be resolved in 12 to 24 hours, but they have been saying the same thing for the last 10 days,” one diplomat said. “It sounds very good. It looks very positive, but I'm still suspicious.”
Another diplomat said he had been informed after the talks the hostages would be freed soon if the government promised no military reprisals against the militants, whose attacks have cut a tenth of Nigeria's oil output.
The militants have promised to carry out more attacks very shortly.
The photograph showed the hostages — an American, a Bulgarian and a Honduran as well as the Briton — in apparently good health and sporting beards, indicating it was taken recently, diplomats said.
A spokesman for the Bayelsa state government said authorities were using community leaders as go-betweens because the militants did not want to talk directly to authorities.
“We are making progress. We hope the hostages will be released in the next few days,” the spokesman said.
The hostages complained in a call to Reuters on Thursday of diarrhoea and fatigue from being constantly moved around the humid mangrove swamps.
The militants had threatened to kill all the hostages if U.S. hostage Patrick Landry, who was ill, died. Landry's health has apparently improved and the threat of execution has abated.
In an email sent before Sunday's meeting, the Movement for the Emancipation of the Niger Delta said it could hold the hostages for years.
DEMANDS
The group's key demand is the release of militant leader Mujahid Dokubo-Asari and former Bayelsa state governor Diepreye Alamieyeseigha.
Oil unions have threatened to leave Nigeria's restive delta, which produces almost all the nation's oil, if the security situation deteriorates. Dozens of people have been killed in the well-organised raids and bombings by the militia.
The campaign has helped pushed world oil prices to four month highs and oil industry sources say the political aims of the militants mean unrest may last until elections next year.
An uprising before 2003 polls hit 40 percent of Nigeria's oil production.
“Even if the hostages are released, their demands cannot be met, so will they give up the attacks or carry on?” said a senior oil industry source.
Alamieyeseigha, impeached last month for money-laundering after escaping arrest in Britain, is a political foe of the president and a major scalp in his war on corruption. Asari is on trial for treason after leading a bloody insurgency in 2004.
“I would be extremely surprised if the government agreed to free them,” said Mosto Onuoha, a professor at the University of Nigeria.
The militants are also seeking $1.5 billion (847 million pounds) from Royal Dutch Shell in compensation to villages for oil spills and more local control over the Niger Delta's oil wealth.
So far, Shell is the only oil major to say it has suffered. It has cut its production by 210,000 barrels a day and pulled out 500 staff. Hundreds of contractors have also fled.
France's Total and Italy's Agip, a unit of ENI, have both denied militant claims they were attacked. read more

CARACAS (AFP) – The Venezuelan government has announced its reduction of a demand for back taxes and interest against a unit of Anglo-Dutch oil giant Royal Dutch/Shell to 13 million dollars.
Although still a hefty sum, the new tax demand is significantly less than the 131 million dollars the authorities had demanded from the oil major's local unit last year.
Shell signed an accord with the government last month deepening its commercial ties with the state-owned Venezuelan oil company, PDVSA, after Caracas said it and other foreign energy groups had failed to meet the requirements of a 2001 law.
The law mandated 16.6 percent royalties and income taxes of 50 percent on petroleum production.
In mid-August, the authorities briefly shut down Shell's offices for 48 hours as tensions over the law mounted.
Spain's Repsol, Brazil's Petrobras, Japanese group Teikoku, and China National Petroleum Corp (CNPC) have also signed agreements relating to the 2001 law. read more

LAGOS, Nigeria – Ethnic militants holding four foreign oil workers hostage in the Niger Delta threatened on Sunday to keep them for years if necessary and repeated demands for Nigeria to free two Ijaw leaders.
The Movement for the Emancipation of the Niger Delta, which has crippled a tenth of Nigeria’s oil supply, promised fresh attacks in the region and on “soft targets” across Nigeria if President Olusegun Obasanjo did not free the two men.
“In countries such as Colombia, hostages are kept for years. We can do (the) same,” said an e-mail from the militants, who abducted the captives 11 days ago from a Royal Dutch Shell offshore oilfield.
The Ijaw group, which demands local control over Nigeria’s oil heartland, has made the release of militant leader Mujahid Dokubo-Asari and former Bayelsa state governor Diepreye Alamieyeseigha its key demand.
“If Asari and Alamieyeseigha are not released as we have expected, we will escalate attacks in the Niger Delta and extend them to soft targets around the country,” the statement said. “Attacks on such facilities will be aimed at crippling economic activity.”
Many fuel storage facilities across Nigeria offered no resistance to assault, said the group, which has also warned truckers not to drive petroleum tankers or face violence.
Dozens of people have been killed in well-organized raids by the heavily armed militia and oil unions have threatened to withdraw their workers if the situation worsens.
The campaign has already helped push world oil prices to four month highs and analysts say the political aims of the militants means unrest may escalate before 2007 elections.
Hostages said to be in good health
A spokesman for the Bayelsa state government, coordinating the response to the attacks, said authorities had received a photograph of the hostages and assurances that the American, Briton, Honduran and Bulgarian were all in good health.
In a telephone call to Reuters on Thursday the captives had complained of diarrhea and fatigue from constant movement in the humid mangrove swamps. American Patrick Landry, who suffers from high blood pressure, was particularly ill, they said.
“We are making progress. We hope the hostages will be released in the next few days,” said the spokesman.
The militants, darting by motor boat around the maze of tidal creeks in Nigeria’s extreme south, said on Saturday they had not yet opened talks with anyone and insisted the government must negotiate directly with the two jailed Ijaw leaders.
Alamieyeseigha, impeached last month for money-laundering after escaping arrest in Britain, is a political foe of the president and a major scalp in his war on corruption. Asari is on trial for treason after leading a bloody insurgency in 2004.
“Each man has a serious court case pending over his head … I would be extremely surprised if the government agreed to free them,” said Mosto Onuoha, professor at the University of Nigeria. “The government is in a difficult position.”
The militants are also seeking $1.5 billion from Shell in compensation to villages for oil spills. Even if this is paid, the group has said it will continue its attacks, focusing on other operators.
So far, Royal Dutch Shell is the only oil major to say it has suffered during the group’s month-long campaign of violence. It has cut its production by 210,000 barrels a day and pulled out 500 staff. Hundreds of contractors have also fled.
France’s Total and Italy’s Agip, a unit of ENI, have both denied militant claims they were attacked. read more

By Tim Webb
Published: 22 January 2006
Greater energy efficiency for households and transport will be promoted in the Government's long-awaited Energy Review, which will be launched tomorrow. The initiative will propose grants for the “fuel poor” – poorer households – to insulate their homes and cut down on carbon emissions.
The consultation with business and the public will last three months and focus on five main areas: nuclear power; renewable forms of energy such as wind; energy efficiency; reducing carbon emissions; and fuel poverty.
Prime Minister Tony Blair has said that he wants a decision on the main question – whether to build more nuclear stations to replace old reactors and coal-fired plants – by the summer.
The review comes after the chief executive of Anglo-Dutch oil giant Shell, Jeroen van der Veer, admitted it would be another 20 to 30 years before renewable forms of energy became “really big business”.
One chief executive of a UK company, which is developing renewable such energy projects as wind and landfill gas, argued that there was little incentive for large oil companies to develop renewable projects more quickly. He said that because the scale of the projects is tiny compared to the majors' core oil and gas businesses, renewables were not a priority.
For example, BP's Alternative Energy division generated $400m (£226m) of revenue in 2004 out of total annual revenues of $200bn. In contrast, “it's hard for smaller companies to raise funds to develop renewable technologies,” he added.
Energy analyst Nigel Hawkins said Shell realised that long-term investment in renewables could provide an alternative source of revenue if profits from selling oil fell in the future.
However, he added: “Oil companies also realise the PR value of emphasising their environmental credentials.”
A spokesman for BP said it would be “some years to come” before its Alternative Energy division played a key role in its business. “We do not pretend that the investment is material at this stage.”
Last week, the price of carbon increased by almost a fifth to €27 (£18.50) per ton to move close to its record high of €29 per ton.
Higher gas prices following cold weather in Europe and concerns over supply from Russia have encouraged power stations to switch to coal. read more

By Wesley Brown
What does a Houston company with Arkansas roots, a French conglomerate headquartered in the Big Apple and a Dutch oil giant with Texas ties all have in common?
Southwestern Energy, Schlumberger Ltd. and Shell Oil, the three respective companies described above, represent the three levels of what could be billions of dollars in investment in the hot Fayetteville Shale play.
These companies alone announced late last year that they will invest more than $1 billion in possibly the hottest natural gas field on earth.
Houston-based Southwestern said just a few days before Christmas that it plans to invest more than half of its $830 million 2006 budget to develop natural gas wells in the giant Arkoma Basin, which stretches across half of the state.
“Our capital program in 2006 … will be heavily weighted toward the Fayetteville Shale play in Arkansas,” Southwestern Energy President and CEO Harold M. Korell said.
The company's $400 million budget this year for the burgeoning Arkansas natural gas portfolio represents a 123 percent hike over the $175 million spent last year. So far, more than 50 wells have been drilled on the nearly 900,000 acres that the company owns in Franklin, Conway, Van Buren, Cleburne and Faulkner counties.
John Thaeler, senior vice president at SEECO, the Fayetteville subsidiary of Southwestern, said the region could see upwards of another $90 million, depending on the outcome of current test drilling.
In oilfield circles, Southwestern is known as an independent producer. Unlike the so-called “majors” that have their hands in the oil business from the drill bit to the refinery to the gas pump, independents mainly focus only on drilling and producing crude oil and natural gas, and then selling it on the international market.
The company left Fayetteville several years ago for Houston, the boom-and-bust Texas city that is now considered the oil capital of the world.
Meanwhile, experts have known for years that the shale region of Arkansas has large natural gas reserves. But the natural gas is contained in shale-dominated, fine-grained rocks in depths ranging from 1,500 to 6,500 feet, making it costly and difficult to extract, said Ed Ratchford, geology supervisor for fossil fuels at the Arkansas Geological Commission.
Now, with new technology and investment dollars siphoned from record natural gas prices, there has been a modern-day gold rush to obtain the mineral rights on the formation so developers and wildcatters can begin exploratory drilling.
It was Southwestern that contracted Schlumberger a few years ago to seek ways to exploit the shale reservoirs of western Arkansas.
Schlumberger is known as one of the Big Three oilfield conglomerates, along with Baker Hughes and Halliburton. The company has heavily invested in gas shale research and is known throughout the oil industry for its downhole technology expertise.
It was the former Paris-based multinational that developed a full line of key technologies – such as 3D imaging, reservoir software and hydraulic well monitoring and measuring – that now allow natural gas developers to extract gas from the porous shale rock.
Together in Houston now, after Schlumberger's recent announcement that it plans to move its U.S. headquarters from New York City Texas, the two companies have helped to draw hundreds of other natural gas speculators to the region.
But it is The Hague-based Royal Dutch Shell plc, one of the largest publicly traded companies in the world with annual revenues of $306 billion, that will put a stamp of legitimacy on the unconventional natural gas play.
Like Southwestern and Schlumberger, the oil giant commonly known as Shell Oil announced near the end of last year that it is coming to Faulkner County.
Shell said that it has acquired the rights to explore on 70,000 acres in the emerging shale play and plans to drill its first well this year.
Schlumberger, with annual revenues exceeding $11 billion, has already begun construction on a regional office at a 20-acre site in Conway's industrial park that will ultimately employ 100 locals.
Before that, Southwestern opened offices in the growing central Arkansas city and will eventually hire up to 150 people there.
If other oil majors like Exxon-Mobil, BP, Chevron and ConocoTexaco join Shell and the others, the payout for the state's economy will be enormous. And Conway, now known as a college town, will join the ranks of the nation's few boomtowns.
Wesley Brown is business editor for the Arkansas News Bureau in Little Rock. His e-mail address is [email protected].
  read more

Business Week: Nigerian militia leader threatens attacksAssociated Press/LAGOS, Nigeria
By DULUE MBACHU
Associated Press Writer
An American worker held hostage in Nigeria is sick and his kidnappers will kill three fellow hostages if he dies, a militant leader threatened Saturday.
Brutus Ebipadei of the Movement for the Emancipation of the Niger Delta did not offer details on the condition of Patrick Landry, a ship captain from Houston, or say why his group would kill hostages from Britain, Bulgaria and Honduras if he died.
“They're drinking the bad water we're drinking and experiencing the conditions our people have suffered for decades,” Ebipadei said.
If Landry dies, “we'll have no choice but to kill the remaining ones,” Ebipadei said. He did not say why.
Landry's son, Dwight, of Eunice, La., said in an interview Saturday that his father had a stroke in 1998 and had not taken his medication for high cholesterol and blood pressure since the Jan. 11 kidnapping.
Dwight Landry said he had heard an audio clip of his father asking that his captors' demands be met.
“I could hear the desperation in his voice, I could hear the panic and I could hear the fear,” he said.
Ebipadei said the kidnappers refused to negotiate and he reissued a threat to launch new attacks on installations in the oil-rich Niger Delta.
“Our demands are not negotiable. And failure to meet those demands means we will launch attacks on all oil installations to stop Nigeria's capacity to export oil,” Ebipadei said.
The militants demand the release of a former regional governor and a militant leader who pushed for greater local control of revenues from the delta. They also want $1.5 billion in compensation from Royal Dutch Shell, Nigeria's largest oil producer, for alleged environmental damage.
Nigeria, Africa's leading oil producer, exports about 2.5 million barrels of oil a day, making it the fifth-largest source of U.S. oil.
Militant members of the 8-million person Ijaw tribe that dominates the delta have long agitated for a greater share of oil wealth. Ebipadei has claimed responsibility for a spate of attacks that included the kidnapping of the four foreigners from a Shell oil platform last week.
A major Shell pipeline leading was blown up the next day and more attacks followed in other areas.
The attacks have cut the OPEC-member nation's crude output by nearly 10 percent. Shell has evacuated hundreds of workers since the unrest began.
Ebipadei said negotiators sent by the government to secure the hostages' release “are traitors to the Ijaw cause and we're not ready to deal with them.”
Officials nonetheless expressed optimism about negotiations.
“People are pleading with them, and the pleas are beginning to reach them,” state government spokesman Ekiyor Welson said.
On Friday, the State Department called for the release of the four captives, while a British diplomat said his country was pressing Nigeria not to use force to free them.
The militants are demanding the release of militia leader Mujahid Dokubo-Asari and former Bayelsa state Governor Diepreye Alamieyeseigha. Dokubo-Asari was jailed in September on treason charges, while Alamieyeseigha faces extradition to Britain, after jumping bail there on money laundering charges.
Problems in the Niger Delta, along with concern over the Iranian nuclear dispute and new threats of al-Qaida attacks on the U.S. helped push up oil prices Friday.
Britain's Press Association has identified the kidnapped Briton as Nigel Watson-Clark, a former paratrooper and father of three from Saltford who was working as a security officer. read more

Possible sanctions against Iran drive oil prices up; violence in Nigeria, IEA forecast of reduced OPEC production also factors
Brad Foss
Associated Press Business Writer
Crude-oil prices charged to a three-and-a-half month high above $66 a barrel Jan. 17 amid growing unease about the possibility of sanctions against Iran, OPEC’s second-largest producer, because of its nuclear ambitions.
Rising violence in oil-rich Nigeria contributed to the runup of more than $2 a barrel, as did a reported refinery snag and a forecast from an international energy watchdog calling for reduced non-OPEC crude output in 2006.
February crude futures leaped $2.39 to settle at $66.31 a barrel on the New York Mercantile Exchange, the highest close since Sept. 29, when oil finished at $66.79.
Futures prices for fuels refined from oil, such as gasoline and heating oil, also soared.
Analysts said that unless there is a quick resolution to the dispute between Iran and the West over Tehran’s nuclear program, oil prices could soon climb above $70 a barrel and even test the Aug. 30 all-time high of $70.85.
“Seventy-dollar crude is on the way,” said James Cordier, president of Tampa, Fla.-based Liberty Trading. “It’s almost a done deal.”
But analysts cautioned that oil prices at that level for any sustained period of time could considerably slow economic growth, and dampen energy demand.
“The calculus of perpetually higher prices assumes that nothing will change,” said oil analyst John Kilduff of Fimat USA in New York. Kilduff said he is not comfortable with such an outlook because it discounts the likelihood that higher prices will eventually lead to reduced demand, and thus lower prices.
For the time being, however, energy traders must deal with strong global demand and a potentially serious threat to oil supplies on the horizon.
“The Iranian nuclear issue is driving the market,” said Tetsu Emori, chief commodities strategist at Mitsui Bussan Futures in Tokyo. “The issue poses a threat of supply disruption in a major oil-producing country.”
Analysts also said recent attacks on oil facilities in Nigeria — Africa’s leading oil exporter and the fifth-biggest source of U.S. oil imports — were supporting crude’s rise. Amid the rising violence in Nigeria, Royal Dutch Shell PLC said it was forced to slash output there by another 115,000 barrels per day, bringing total production cuts to 221,000 barrels per day.
Negotiators were working Jan. 17 to free four foreigners held hostage in the nation’s southern oil region as militants claiming to hold the captives said they would target oil installations if their demands were not met within days.
In London, March Brent crude on the ICE Futures exchange rose 99 cents to $64.17 a barrel.
Heating oil futures surged 7.65 cents to close at $1.7915 a gallon while gasoline futures advanced 9.22 cents to settle at $1.8233 a gallon. The jump in refined product prices was a reflection of the higher oil price, as well as a reaction to a reported shutdown of a New Jersey refinery.
Natural gas futures also rode higher on the back of the oil-market rally, gaining 37.7 cents to $9.168 per 1,000 cubic feet.
Russia and China on Jan. 16 joined the U.S. and its European allies in demanding that Iran fully abandon its nuclear program. The powers called for an emergency board meeting of the International Atomic Energy Agency on Feb. 2-3 to discuss the issue.
The West fears Iran intends to build an atomic bomb, but Iran claims its program is intended only to produce electricity.
Meanwhile, the International Energy Agency on Jan. 17 reduced its forecast for non-OPEC supply growth by 100,000 barrels per day, but left its forecast for world oil demand this year unchanged at 85.1 million barrels a day, up more than 1.8 million barrels a day against last year.
The group also projected that Chinese oil demand bounced back from weakness late last year, with an expected near-7 percent growth in December.
However, Cordier said the IEA’s forecast doesn’t adequately address the possibility of sanctions against Iran and the possible global economic implications if the country’s oil output declines as a result.
“Sanctions definitely mean crude oil off the market,” said Cordier, who added: “There’s no question it comes to a point where we’re going to slow global growth at $70 a barrel.” read more

BLM leasing oil shale properties as part of Energy Policy Act of 2005 push; nominations received, awards expected in spring
Gary Park
For Petroleum News
While Canada lags far behind the United States in exploiting coalbed methane and shale gas, the U.S. is venturing into one of its northern neighbor’s specialties.
The U.S. Bureau of Land Management took the first steps in December towards leasing oil shale and tar sands prospects in Colorado, Utah and Wyoming by initiating efforts to establish a regulatory regime for commercial development.
It is part of a push under the Energy Policy Act of 2005 to open up more unconventional resources by allowing commercial leasing of oil shale and tar sands in 2007.
The targeted areas for oil shale are the Piceance and Washakie basins in Colorado, the Uintah Basin in Utah and the Green River and Washakie basins in Wyoming.
Some estimates put the resource at 1 trillion barrels, although only a small percentage is likely to be recoverable.
Tar sands opportunities are believed to exist in some sedimentary regions of the Colorado Plateau in Utah, similar to the bitumen deposits that are key oil sources in Canada and Venezuela.
Advances in technology targeted
The bureau hopes that advances in extraction technologies will make it possible to avoid the negative environmental impacts when oil shales were leased on federal lands in the 1970s, but careful steps will be taken to prevent a repetition.
Oil shale research, development and demonstration projects started in June when the bureau invited bids for 10-year, 160-acre properties covering a total 16,000 acres in the three states. That area is thought to hold 2.6 trillion barrels of oil.
Nominations have so far been received for 10 parcels in Colorado, eight in Utah and one in Wyoming, with bidders including Chevron, ExxonMobil, Anadarko and Royal Dutch Shell. Contracts are expected to be awarded this spring.
Canadian technology may be needed
But embarking on U.S. shales may involve a transfer of technology from Canada.
At a meeting last summer between U.S. lawmakers and the Canadian Association of Petroleum Producers, the congressional representatives started probing their guests about the chances of applying oil sands technology in the shales.
Not that the Canadians were unwilling to share their know-how but they made it clear that there is a considerable difference between oil sands (where the a grain of sand is coated with water and oil, posing the challenge of breaking the bond between oil and water), while with shale oil, the oil is bonded directly to rock, making it much harder to separate.
Oil sands pioneer Suncor Energy has learned that lesson to its cost, writing off a C$200 million investment in an Australian shale oil venture, conceding that its technology worked only in a test environment.
CAPP President Pierre Alvarez has said the shale oil puzzle needs a major research and development undertaking.
He said a massive R&D effort is required to exploit 70 percent of oil trapped underground and that, in turn, demands a coherent North American energy policy at a time when both the U.S. and Canadian governments have drastically reduced their research budgets. read more

Shell Exploration & Production Co. named three top officials for its Alaska operation Jan. 19.
Rick Fox is Alaska asset manager, Cam Toohey is Alaska government and external affairs manager and George Ahmaogak Sr. is Alaska community affairs manager.
Alaska Exploration Manager Chandler Wilhelm said the company was pleased with the years of leadership and “wealth of Alaska knowledge” the three bring to the company’s Alaska team. “Shell’s ambition is to be in Alaska for a long time, starting in the Beaufort Sea,” he said. Although production is years away business planning and stakeholder engagement work is already under way, he said in a statement.
Fox has been with Shell for 30 years, most recently as operations capability manager based in Louisiana. He has also been responsible for the Shell Robert Training Center, Operations Recruiting and Training. Earlier in his career Fox worked in Alaska’s Bering, Beaufort and Chukchi seas and was lead drilling foreman on the Chukchi Sea exploration team.
Fox, Alaska asset manager, will also be incident command officer, oversee logistics and help build a workforce development plan for Alaska.
Toohey, a lifelong Alaskan, has been special assistant to the secretary of the U.S. Department of the Interior. Toohey will be responsible for Shell’s government and external affairs activities in Alaska, and will work with stakeholders to develop Shell’s Alaska sustainable development and social performance plans, outlining how Shell will manage impacts of its business on residents and communities in Alaska.
Ahmaogak, a lifelong Alaskan, was formerly mayor of the North Slope Borough, president of Ukpeagvik Inupiat Corp. and Piquniq Management Corp. and a member of the Interior’s National Outer Continental Shelf Policy Committee.
His primary responsibility will be to engage with local communities, such as those on the North Slope.
Toohey and Ahmaogak will join Shell Jan. 23; Fox officially assumes his post Feb. 1. All three will be based in Anchorage. read more

Brian Carey
JOHN SWEENEY, the west of Ireland oil distributor and shareholder in the Shelbourne Hotel, is to join the American firm Mandraki Associates in seeking substantial compensation from Shell arising from complaints over the sale of its retail and distribution business in Ireland.
Sweeney and Mandraki bid unsuccessfully for Irish Shell, which includes six oil import facilities, 35 distribution depots and 55 filling stations. They claim that the sale process, which is now the subject of a High Court action, was unfair.
Topaz Energy, a buyout backed by Ion Equity, purchased the retail and distribution assets for an estimated €180m last July, but the deal only closed over a month ago.
It is believed that Sweeney and Mandraki are unhappy about the access it received to certain financial information during the sale. Mandraki has written to the company seeking the repayment of its bid costs of €1.5m and unspecified compensation. It has also sought for the bid to be rerun.
Shell this weekend confirmed that the sale process was now the subject of a legal challenge, but would not identify the party or parties suing.
“We conducted the sale of our Irish retail and commercial marketing and distribution businesses fairly and in accordance with normal market practices,” the company said in a statement. “We confirm that a legal challenge has commenced against Shell in relation to the sale process and that we intend to defend this challenge vigorously.”
Sweeney, 45, is the son of a Clifden publican and one of the largest distributors west of the Shannon. He owns the Station House Hotel in Clifden and the Johnstown House Hotel and Spa in Co Meath. read more

THE ASSOCIATED PRESS LAGOS, Nigeria – Nigerian troops battled militia fighters in swamps around a Royal Dutch Shell oil platform that militants attacked at dawn Sunday. It was the third assault on Shell oil facilities in less than a week.
Shell confirmed the attack on the Benisede oil platform in the southern Niger Delta and said some of its staff were taken to a hospital. The company also said it was evacuating vulnerable facilities.
In a statement, Shell said “heavily armed persons” in speedboats attacked the platform early Sunday, burn- ing down staff accommodations and damaging the facility.
Soldiers guarding Benisede returned automatic-weapons fire, but it was unclear whether they had lost control of the platform, said Brig. Gen. Elias Zamani, commander of a task force charged with security in the volatile oil region.
Zamani had no other details of the fighting.
Residents reported continuous gunfire and the firing of heavy guns. “There is a war going on here,” Enitowari Inengi, a resident near Benisede, said by telephone. “People are scared and are taking their boats and moving away.”
On Wednesday, gunmen attacked Shell's EA platform near the delta coast, seizing a Bulgarian, an American, a Briton and a Honduran. A major Shell pipeline was blown up the next day.
The first two attacks initially forced a 10 percent drop in Nigeria's oil exports. read more

By MARC CHAMPION
Staff Reporter of THE WALL STREET JOURNAL
January 21, 2006; Page A2
Every year, more than 2,000 businesspeople, politicians, celebrities and journalists from around the world gather in the Swiss ski resort of Davos to network. The World Economic Forum — which charges chief executives $23,000 for an annual membership plus $18,000 a pop for tickets to the conference — picks a theme for them to talk about.
Most years, the participants then talk about something completely different.
The theme for this year's meeting, which begins next week, is “The Creative Imperative,” with a focus on doing business with China and India. The real buzz probably will center on energy security.
Much of the energy world is making the trek to Davos, including the head of the Organization of the Petroleum Exporting Countries, or OPEC, and top executives from Royal Dutch Shell PLC, BP PLC, Chevron Corp., Total SA, OAO Lukoil and Saudi Aramco. In mostly private sessions at the four-star Schweizerhof hotel, they'll be holding their own daylong mini-Davos on Thursday.
In one 3½-hour session, an energy-crisis simulation will posit that terrorist attacks cause oil prices to rise to more than $120 a barrel. Among those on hand to figure out the impact and how to respond will be oil and insurance CEOs, the head of the International Energy Agency and President Bush's international energy adviser, Faryar Shirzad.
The global economy may have weathered the Iraq war and surging oil and natural-gas prices pretty well so far. But nervousness has been rising again. Hurricane Katrina showed some of the vulnerabilities of the energy system to natural disaster. Over the holidays, Russia cut off natural gas to Ukraine and Moldova, causing pressure in the pipeline to Western Europe to drop briefly. That triggered a panicked Europe to debate how to diversify energy supplies.
Now Iran is roiling energy markets, as the U.S. and European Union aim to ratchet up pressure on Tehran to abandon nuclear programs that might be used to make weapons. That's raised concerns that Iran's four-million-barrel-a-day production could be disrupted. Oil prices are pushing back toward their recent peak, reached after Katrina in intraday trading, of $70.85 a barrel.
None of this will get resolved at Davos. But the ability to gather so many Fortune 500 CEOs, top politicians, NGO heads and thinkers in a room together and let them work it out may get some ideas rolling. That, according to the forum's founder and president, Klaus Schwab, is what makes Davos different from other talking shops.
Of late, Hollywood celebrities have generated a lot of Davos buzz, too. Last year actors Sharon Stone and Richard Gere stole the show — sparking criticism that Davos had gone Hollywood. Apparently, some of that criticism stung Mr. Schwab and it looks like Ms. Stone won't get invited again.
She “had a little bit of her own show, and that is not what we really appreciate,” Mr. Schwab said in an interview. Stars, including Michael Douglas, will leaven the mix of suits again this year, but they'll include more intellectual types, too, like the architect Rem Koolhaas, Mr. Schwab said. Mr. Koolhaas is as famous in the architecture world as Ms. Stone is in movies — though perhaps without the same primal draw.
Write to Marc Champion at [email protected] read more

Graham Searjeant
PEOPLE are playing many strange new roles on the stock market that were never envisaged when the capitalist system of joint ownership was developed and the principles of company law evolved. The most peculiar of these new life forms are institutional shareholders who sue the companies they own. They are so odd that it is hard to square their relationship with the company with the formal roles of shareholders, such as voting to elect directors and to approve or reject their stewardship.
Last week 26 Dutch pension funds that had owned shares in Royal Dutch Petroleum got together to sue its successor, Royal Dutch Shell, in an American court for a sum that their lawyer could only estimate as “hundreds of millions” of dollars, euros or pounds. The funds, led by the £140 billion civil servants and teachers’ scheme, together represent more than half Dutch pension scheme members.
They are rightly aggrieved that Shell’s former management reported figures for proven oil and gas reserves using the sort of generous interpretation that the Treasury so often commends to the Office for National Statistics. As we now know, this went on for years and was a subject of debate within Shell. But the figures were wrong only if you assume that the archaic definition preferred by the US Securities & Exchange Commission, but also criticised by rival BP, is the gold standard.
Lawyers will argue whether the figures affected the share price. BP had been running ever farther ahead of Shell for several years but the market’s hysterical reaction to Shell’s restatement of reserve figures widened the gap. If you bought Shell and BP a week before the announcement of January 9, 2004, you would have gained about 45 per cent on BP and 33 per cent on Shell, although Shell’s higher dividend would have narrowed the difference.
That is hardly a disaster, but it is still annoying. Unless you sell out in advance, however, it does not make universal sense to vent that annoyance by suing the company that you part own, knowing that it must pay damages with your money. If all shareholders sued, it would be like cutting off your nose to spite your face.
In that case, success would be like forcing a company to pay back capital regardless of its needs, as Kirk Kerkorian mistakenly thought of doing at General Motors and William Ackman’s Pershing Square hedge fund first essayed at McDonald’s. Shell could easily pay out more but there are cheaper ways to achieve that and it might not be the best remedy for lack of reserves.
The other way is to sue other people, usually the auditors, or to differentiate yourself from other investors. The Dutch funds are also suing former directors, more to vent frustration than for financial reasons. They claim to have lost by buying during the key period, implying that others cannot claim compensation.
If the US courts collaborate in this kind of sophistry, they will send a message that any investor who does not employ a lawyer is a second-class shareholder. If institutional investors, hedge funds and billionaires band together to win damages for themselves, the damages will have to be paid not by former directors but by small shareholders.
Shell is not in a strong position to resist the Dutch, having provoked them by settling a different but related lawsuit in the US. But if the oil group’s unified board has learnt from its mistakes over the restructuring, it will try to stop small investors from being fleeced by moralistic institutions. This can be done by promising to pay out equally to all shareholders on whatever basis a court mistakenly decides. At least all investors would be equal, even if the outcome is bad for future returns.
Company articles and company law also need to take account of this daft phenomenon. If a shareholder is suing its fellow shareholders, it has such a perpendicular conflict of interest that it should automatically lose its voting rights. Nor should investors accept the debts of their predecessors.
If investors or former investors sue a company for past misdemeanours, it should be equally obligatory for the company to sue those who owned its shares at that time to compensate present shareholders. That should create such legal and financial chaos that pension funds will think again before trying to extract money unfairly from private investors. read more

(Filed: 21/01/2006)
Volkswagen has signed a letter of intent with Shell and the logen Corporation to conduct a joint study into the feasibility of producing cellulose-based ethanol fuel in Germany. The bioethanol, which is fermented and distilled from waste agricultural products such as corn husks, uses a new process from logen which it claims is up to 90 per cent efficient.
The resulting biofuel cuts carbon dioxide emissions by up to 90 per cent compared with conventional petrol, but initially it would be used to dilute petrol based on mineral oil at a rate of 15 per cent. EU biofuel directives for 2010 propose greater concentrations of ETBE (ethyl tertiary butyl ether), of up to 10 per cent, and VW is supporting this move.
VW Group boss Bernd Pischetsrieder explained the thinking: “The European agreement at Kyoto was to reduce new car emissions of CO2, but with a replacement ratio of 10 per cent and a CO2 reduction of 20 per cent as each old car is replaced [given a typical car life of 10 years], the overall CO2 reduction we can expect cannot be more than two per cent a year.
“In Europe, the car industry will now be measured on its total CO2 contribution rather than just on new cars, and that is why biofuels are the answer – they can reduce the CO2 output from every car on the road.”
Mercedes introduced its Bluetec advanced diesel technology in America last week, and is hoping that this will persuade Americans to buy diesels.
The engines, which are already in use in Mercedes-Benz trucks, use catalytic converters, particulate filters and nitrogen-oxide reduction technology. They meet the stringent exhaust-gas requirements in 50 American states. The first Bluetec engine will be the 3-litre, V6 turbodiesel in the E320 CDi, which goes on sale later this year. Sister company Chrysler will also be fitting Bluetec-equipped engines in future.
Nor is Mercedes the only company trying to persuade the Americans to love diesels. Volkswagen has already committed to bringing diesels to the States, as have Honda and Nissan.
“I see this as a battle of technology, with the Japanese pushing hybrids and the Europeans pushing diesel,” said Nissan boss Carlos Ghosn, when asked whether his company would import diesel engines to the US. “Hopefully, we will have both.”
Renault is currently developing a range of V6 and V8 diesels for its partner, although Ghosn did not rule out buying a diesel from an outside supplier in the meantime.
Nothing quite as exciting as Honda's hydrogen project on the Japanese island of Yakushima (Motoring, October 22) was unveiled at the Detroit show, but we did learn that the Australian state of Tasmania is also investigating creating a hydrogen economy for itself and its many offshore islands.
Like Yakushima, Tasmania is rainy and mountainous, so there's a basis for hydro-generated electricity. We'll keep you posted… read more

BUSINESS
*UK productivity gap grows
Chancellor Gordon Brown's dream of British productivity to rival that of the US was dealt a blow with the publication of figures showing the gap had widened since Labour came to power in 1997.
*Million dollar site hit
The FBI is probing the hijacking of milliondollarhomepage.com – a website that earned its creator Alex Tew $1m (£567,000) by hosting micro-ads – by hackers who demanded a ransom to restore the site. Mr Tew was sent a demand for $50,000 by e-mail by a hacker, believed to be Russian.
*Tesco still at top of the tree
Tesco reaffirmed its position at the top of Britain's supermarket heap, delivering stronger headline growth than its competitors for the fifth year running. But the market, now used to exceptional performance, gave a lukewarm reception to underlying sales up 5.7 per cent over Christmas.
*Airbus again outsells Boeing
Stellar sales in December allowed Airbus to surprise the aerospace industry by announcing it had won more new orders for commercial aircraft than its US rival for the fifth year running. Boeing, however, won 55 per cent of the market by value in 2005, helped by success in selling long-haul aircraft.
*Cisco targets home electronics
Cisco, the leading internet networking equipment maker, plans to challenge companies such as Sony and Samsung in mainstream consumer electronics. Cisco's chief development officer said demand for devices that could link to the internet would allow the company to enter a new market.
*Europe search engine move
Bertelsmann, the German media group, is set to become German leader of a Franco-German project to create a multimedia search engine that can challenge US dominance. Project Quaero aims to take on Google and Yahoo with a search engine that can sort audio, images and video as well as text.
*Boston gets the upper hand
Boston Scientific achieved a potentially decisive blow in its battle with Johnson & Johnson to take control of Guidant. The US heart devices maker has been a takeover target for more than a year and this week switched support from J&J to Boston.
*Debenhams set for comeback
Debenhams, the department store chain that was delisted in 2003, is set for a return to the stock market. The high street retailer has appointed four banks to assess its strategic options ahead of a listing that could raise more than £3bn and be one of the biggest IPOs this year.
*£2bn BA pensions deficit
British Airway's pension deficit has roughly doubled to about £2bn since the last valuation in March 2003, BA told union representatives. If the company were to wind up its schemes, it would crystallise a debt of £3bn-£4bn, compared with BA's market capitalisation of about £3.6bn.
*US banks perform well
Merrill Lynch showed the success of CEO Stan O'Neal's strategy of cost-control and investment in new businesses, reporting record $5.3bn (£3bn) profits for 2005. Merrill's good investment banking performance was in contrast to that produced by JPMorgan's investment banking arm.
*Minolta to abandon cameras
Konica Minolta is pulling out of the camera and photo businesses and selling some of its digital SLR camera assets to Sony. The surprise move signifies the end of an era in which traditional camera and film companies, many of them Japanese, dominated the market.
WORLD
*Chirac's nuclear warning
Jacques Chirac, France's president, threatened to use nuclear weapons against any state that supported terrorism against his country or considered using weapons of mass destruction. Mr Chirac said the end of the cold war did not remove the threats to peace or the justification for his country maintaining its nuclear deterrent.
*Bin Laden's carrot and stick
Osama bin Laden warned on audiotape of preparations for new attacks against the US, but the al-Qaeda leader also offered a truce if US troops were withdrawn from Iraq and Afghanistan. The White House immediately rejected the suggeston.
*Austria calls for investor tax
Wolfgang Schüssel, chancellor of Austria, which holds the EU presidency, said that short-term financial investors should pay a new tax to help fund the 25-member club. According to Mr Schüssel, the EU should look at new ways of financing its operations to avoid wrangling over the budget.
*Iran in nuclear hot water
Britain dismissed calls from Tehran for the resumption of nuclear talks. The EU3 – France, Germany and Britain – last week said the negotiations were at a dead end after Iran resumed uranium enrichment. They now plan to report Iran to the UN Security Council.
*Chile gets first female leader
Michelle Bachelet, the candidate of Chile's centre-left government coalition, won the run-off election to become the country's first female president, and also South America's first popularly elected female president.
*Cash pledge for bird flu fight
The world's top public health authorities stressed the need for a strategy to allocate funds pledged to fight avian flu. A total of $1.9bn (£1bn) was raised from the international community to fight the disease. The US donated $334m and the EU about $260m.
*Pakistan tense after US attack
Condoleezza Rice, US secretary of state, said Washington could not deal “lightly” with al-Qaeda but promised to address Islamabad's concerns after a US attack on a Pakistani village. Pakistan's prime minister struck a conciliatory note following the incident.
*Shell attacks in Nigeria
Nigeria's security forces were on high alert after a spate of seemingly politically motivated attacks by armed militants on oil facilities operated by Royal Dutch Shell, the Anglo-Dutch energy group, in the turbulent Niger Delta region.
*New Israeli PM talks peace
Ehud Olmert, Israel's acting prime minister, who replaced Ariel Sharon after he suffered a massive stroke, said he hoped to renew peace talks with the Palestinians after general elections in March but repeated Mr Sharon's precondition that militant groups must first be disarmed.
Compiled by Delphine Strauss, James Fontanella and Emmeline Ravilious read more

Rory Carroll, Africa correspondent
Saturday January 21, 2006
The Guardian
Concern over four oil workers held hostage in Nigeria grew last night after their captors warned that one was gravely ill and that fresh attacks on oil installations were imminent.
The Movement for the Emancipation of the Niger Delta, a militant rebel group, seized the Royal Dutch Shell employees from a company vessel last week during a series of assaults on pipelines and flow stations which drove up oil prices.
The hostages, an American, a Briton, a Bulgarian and a Honduran, have been kept on the move in the Niger delta's maze of malaria-infested swamps and tidal creeks.
Patrick Landry, the American, suffers high blood pressure and could soon die, a kidnapper, who described himself as a commander, told Reuters by phone on Thursday. “One of them is sick, badly sick, and could give up tonight. If one of them dies, we kill them all.”
The statement contradicted previous assurances that the captives would remain unharmed as long as the Nigerian army did not attempt a rescue. It also denied Nigerian government claims that negotiations were under way.
Mr Landry, permitted to make a telephone call to friends and colleagues, said: “We are in bad shape, we really are. Meet these people's demands. We are not military: we came here to work.”
Nigel Watson-Clark, the British hostage, read out the militants' demands, which included compensation for pollution, the release of two ethnic Ijaw leaders and greater local control over the region's oil wealth.
“I have got to tell you we are under a lot of pressure here and things aren't too good,” said Mr Watson-Clark. He urged Britain to lobby the Nigerian government for their release.
In an email statement yesterday, the rebels gave no update about the hostages but warned of widening their attacks against other oil companies, whom they accuse of collaborating with a corrupt government in siphoning off the region's wealth.
“Be assured that we will continue our attacks very shortly. We are more than capable of sustaining the conflict.”
Since clashes flared last month dozens have been reported killed. Shell has withdrawn 500 workers and cut production by 210,000 barrels a day, about a tenth of national output. Nigeria is the world's eight-largest oil exporter.
In a joint statement the country's two main oil workers' unions threatened to withdraw their members if security was not restored.
To escape the delta's chronic instability, oil companies are moving operations offshore.
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By Daniel Balintkurti in Lagos
Published: 21 January 2006
Britain is urging Nigeria not to use force to free four foreign oil workers held captive by a rebel militia in the south of the country.
A British delegation met Nigerian government officials yesterday in the state of Bayelsa, in the country's oil-rich southern delta, to discuss the crisis.
The workers – a Briton, an American, a Bulgarian and a Honduran – were seized on 11 January near a Shell oilfield by the militant group, which is behind attacks on Nigerian oil installations that have cut the Opec-member nation's crude exports by nearly 10 per cent.
A British high commission spokesman, Graham Bannatyne, said consular officials would remain in the area until the crisis had been resolved.
“The safety of the hostages is paramount to us, and we would not wish to see military action that would endanger their safety,” Mr Bannatyne said.
The governor of Bayelsa has been appointed head of a national committee to resolve the crisis, which was due to meet last night.
The kidnapping of the four workers signalled an escalation in violence in the area. A major Shell pipeline leading to its Forcados export terminal was blown up the following day, and more attacks followed in other areas. Shell has evacuated hundreds of workers from the delta.
The militants are demanding US$1.5bn (£850m) in compensation from Shell for environmental damage. They are also calling for the release of two figureheads of their ethnic Ijaw group: Mujahid Dokubo-Asari, a militia leader, and Diepreye Alamieyeseigha, the former governor of Bayelsa .
Mr Dokubo-Asari was jailed in September on treason charges, while Mr Alamieyeseigha faces extradition to Britain, after jumping bail on charges of money laundering.
The kidnapped workers are employed by two companies contracted by Shell in the delta: Ecodrill, a British firm, and Tidewater, an American firm based in Louisiana.
Nigeria, Africa's leading oil producer, exports 2.5 million barrels of oil daily and is the fifth-biggest source of US oil imports. AP read more

Lead Counsel in the securities class action against Royal Dutch/Shell Transport arising from the recategorisation of Royal Dutch/Shell Transport’s proved reserves of oil and natural gas in 2004, have advised us that the United States District Court for the District of New Jersey recently ruled that non-U.S. purchasers of Royal Dutch/Shell Transport’s securities may enforce their rights under the U.S. securities laws and sue for the losses sustained when Royal Dutch/Shell Transport’s securities dropped in value upon disclosure of the recategorisation. read more