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Posts on ‘February 15th, 2006’

Reuters: Nigeria launches helicopter attack in oil delta

15 Feb 2006 19:10:11 GMT
Source: Reuters
By Segun Owen
WARRI, Nigeria, Feb 15 (Reuters) – The Nigerian military launched a helicopter gunship attack on targets in the oil-producing Delta state on Wednesday, and militants threatened to shoot down aircraft unless military flights stopped.
The attack was the first major military operation in the Niger Delta since a militant group staged a series of attacks against the oil industry, and hours after British Foreign Minister Jack Straw called on the Nigerian government to improve security in the delta.
Militants from the Movement for the Emancipation of the Niger Delta said the attack was against Ijaw communities in the Gbaramatu area of the state, but a Navy source said it was directed against oil barges suspected of being used in the theft of crude oil.
“A military helicopter belonging to the Nigerian Army attacked Ijaw communities in Gbaramatu area of Delta state firing rockets and machine guns at targets on land,” the militants said in an email statement.
The helicopter took off from the Osubi airstrip in Warri, operated by Royal Dutch Shell , which militants said was meant to be a civilian airfield.
“Operators of civilian aircraft in this airfield will do well to advise Shell to desist from the practice of permitting the use of this airfield for military use,” the militants said.
“We are very well capable of shooting down aircraft landing and taking off from this airstrip and may consider doing so should it be discovered that the use of this privately owned civilian airstrip for military operations is not discontinued.”
CRUDE THEFT
Industry and government officials estimate that about 100,000 barrels a day, or 5 percent of Nigerian oil output, is stolen by well-connected Nigerian criminal gangs working with international syndicates.
The proceeds often go towards buying arms for gangs in the delta, fuelling a cycle of violence.
A boat taxi operator in Warri town said he thought Wednesday's attack might be directed against people who have opened a hole in a pipeline in that area operated by the state oil company which feeds the Warri refinery.
The 125,000 barrel-a-day refinery has been shut since last month because of the damaged pipeline.
After meeting with top Shell executives in Port Harcourt, at the other end of the delta, Straw said oil theft was going down, but added that more had to be done to reassure the international community and encourage investment in Nigeria. Some areas of the delta were still lawless, he added.
“There is a big security challenge. A lot of effective security enforcement depends very significantly on cooperation that can be achieved at a state level,” Straw said.
“This delta covers a number of states. In some you have good quality leaders, in others less good quality. That is reflected in the security situation in the delta,” he said.
The Movement for the Emancipation of the Niger Delta, which is fighting for more local control over the oil wealth, cut Nigerian oil output by 10 percent last month with a series of attacks on oil pipelines and plaftorms. They also kidnapped four foreign oil workers, including a Briton, for 19 days.
A military response had been expected because the militants, who are heavily armed and operate in speedboats with military-style efficiency, killed 14 soldiers in one attack on an oil platform on Jan. 13. (Additional reporting by Madeline Chambers in Port Harcourt and Tom Ashby in Lagos) read more

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The Daily Yomiuri, Japan: Sakhalin oil, natural gas project faces delays, cost hike

Masaya Tomizuka Yomiuri Shimbun Correspondent
Preparations have begun for energy resource development projects on and offshore of Sakhalin Island, Russia, by Royal Dutch/Shell Group, Mitsui & Co. and Mitsubishi Corp., but the project has already been hit by delays and increased costs.
Natural gas reserves in the region are estimated to be equivalent to about six-years worth of Japan's annual consumption.
Despite rising expectations regarding the Russian island's resource potential, the Sakhalin II project faces construction delays and increased costs.
Construction of what will be the world's largest liquefied natural gas plant on a 520 hectare site–equivalent to about 110 Tokyo Domes–has started at a site on the island's coast about an hour from Yuzhno-Sakhalinsk, the capital of Sakhalin.
About 6,000 workers are employed at the site, operating heavy machinery in a temperatures as low as minus 20 C. When finished, the plant will be supplied with natural gas and crude oil via pipelines from offshore natural gas and oil fields about 800 kilometers north of the island.
The development of the Sakhalin II project began in 1994 after an agreement was reached between the consortium and the Russian government. Since 1999, an offshore platform has been used to produce crude oil during summer.
Year-round crude oil production is scheduled to begin in 2007, and production of liquefied natural gas–the core project–will begin in the summer of 2008.
Shipment of natural gas and oil from Sakhalin to Japan involves a one week round trip–far quicker than the round trip to and from the Middle East that takes more than a month.
“Crude oil from Sakhalin is a light oil with a large proportion of gasoline and naphtha. There are excellent facilities in Japan to process liquefied natural gas, which makes energy imports from Sakhalin easy and attractive for us,” said Goichi Komori of the Institute of Energy Economics, Japan.
The natural energy resources in and around Sakhalin are attractive to Japan because it imports 90 percent of its crude oil needs from the Middle East and faces diplomatic difficulties with China over the construction of natural gas fields in the East China Sea.
When Sakhalin II is completed, crude oil production is estimated to top 180,000 barrels per day. Annual production of liquefied natural gas is expected to reach 9.6 million tons.
Oil and natural gas the project produces will account for about 4 percent of Japan's crude oil imports and 18 percent of its natural gas imports.
Half of the plant's output is expected to be channeled to Japan.
However, construction of the plant has been delayed for more than six months due to pipeline rerouting to avoid a breeding ground for rare wildlife. Total investment also is expected to double from the initial plan due to rises in the price of iron.

The consortium has applied for additional loans from the Japan Bank for International Cooperation and other institutions. The Japan Bank for International Cooperation is cautious over the loan, saying it needed to determine the probability of loan repayment and study the project's impact on the environment.

Meanwhile, changes in the consortium's framework may be taking place with Royal Dutch/Shell Group proposing partial sales of its license to a Russian state-run gas company.
The Sakhalin Energy Investment Co., which is the core business unit of the consortium, is considering construction of an additional liquefied natural gas plant in 2013.
(Feb. 16, 2006) read more

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Dow Jones Newswires: Total Replacement Ratio Puts It In Front

Wednesday, February 15, 2006 5:29:16 AM ET Dow Jones Newswires
0908 GMT [Dow Jones]-Buy into Total (TOT) weakness after 4Q, says Kepler Equities Strategist Edmund Shing. “While the Oil & Gas sector is following its US counterpart down today on weaker crude prices, look to Total's superb 120% reserve replacement ratio.” Sees probable and proved reserves “now at 20bn barrels (vs. 18.4bn a year ago),” which equals “22 years' worth of current production. This clearly sets Total apart from Royal Dutch Shell or Repsol, both of which are struggling along with ExxonMobil and ChevronTexaco to replace current production.” Stock -0.8% to EUR213.50. (BJL) read more

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MSN Money: Oil Company Total Reports 4Q Loss

All Associated Press News
PARIS (AP) – Hurricanes and high raw material costs drove Total SA's fourth-quarter net profit down 37 percent, the company said Wednesday, but surging oil prices still lifted it to a record euro12.27 billion (US$14.63 billion) profit for the full year.
The world's fourth-largest oil company also reported a strong increase in refining margins that helped 2005 net income rise 13 percent from euro10.9 billion a year earlier.
Total's net profit in the fourth quarter dropped to euro2.34 billion (US$2.78 billion). Analysts blamed the decline on high raw material prices at Arkema, the chemical unit slated to be spun off later this year, and on outages due to hurricanes in the Gulf of Mexico.
“In a context of continued demand growth, the tension on production capacity — aggravated by the effect of hurricanes in the Gulf of Mexico — raised oil prices and refining margins to high levels,” Chairman and Chief Executive Thierry Desmarest said in a statement.
The results broadly matched analysts' expectations. An IBES consensus of 23 analysts expected Total to post an annual net profit of euro12.34 billion (US$14.68 billion).
“The fourth quarter net income figures do not concern me,” said Frederic de Villaret of SG Securities. “The important thing is the long term.”
Total's adjusted net profit for the year, stripping out one-time amortization charges and the impact of a shift to a new inventory accounting method, rose 31 percent to euro12 billion (US$14.2 billion), the company said. For the fourth quarter, Total's adjusted net profit rose 6 percent to euro3.05 billion (US$3.63 billion).
Fourth-quarter revenues rose 19 percent to euro39.9 billion (US$47.5 billion) as full-year revenues rose 17 percent to euro143.2 billion (US$170.38 billion).
Analysts said they were impressed by Total's ability to replace reserves compared to its rivals, which at 20 billion barrels — up from 18.4 billion a year earlier — amounted to 22 years of current output.
Total, which has drawn controversy in France for benefiting from higher prices on the backs of consumers, also said it will increase its dividend by 20 percent to euro6.48 (US$7.71) per share for 2005.
Total's exploration and production division was its big growth driver, with an adjusted operating profit surging 43 percent to euro18.4 billion (US$21.89 billion) over the year thanks to rising hydrocarbon prices last year and a stronger dollar in the fourth quarter.
Oil prices jumped around 40 percent last year, topping US$70 a barrel in the summer months after Hurricane Katrina struck.
Refining operations were hard hit by the hurricanes, however, recording a decline of 11 percent in adjusted operating profit in the fourth quarter. For the full year though, operating income for the division rose 21 percent to euro3.9 billion (US$4.64 billion) behind robust margins. Refining margins have been declining in the first quarter of 2006 in Europe.
Chemical operations suffered from high raw material costs in the fourth quarter, leading to a drop of 47 percent in adjusted operating profit.
Desmarest, commenting on the figures, appeared to dispel reports in French media that one of his titles could be given to another executive.
“I have always said that I'll make sure to organize my succession,” he said. “And I'm confident that we have the skills needed in house … But this is not an issue for 2006.”
Shares of Total were flat at euro215.30 (US$256.26) in Paris trading. read more

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Forbes/AFX News: Talisman in exclusive talks with Shell, Esso to buy Fulmar, Auk fields in NSea

AFX News Limited
02.15.2006
LONDON (AFX) – Talisman Energy Inc said it has entered into exclusive talks with Royal Dutch Shell PLC and Exxon Mobil Corp to buy their interests in the North Sea fields of Fulmar and Auk.
The parties have agreed not to disclose a purchase price, Talisman said.
Shell and ExxonMobil hold combined stakes of 85.3 pct in Fulmar and 100 pct of Auk. Talisman already owns 12.7 pct of Fulmar.
Talisman said it expects to assume operatorship later this year.
The deal would significantly increase Talisman's existing Clyde core area assets in the central North Sea. The company currently operates both the Clyde field (where it owns 95 pct) and Orion field (93.7 pct), which, along with the Auk and Gannet fields, export via the Fulmar production facilities.
Talisman chief executive Jim Buckee said the deal is part of the group's strategy to acquire and develop in the North Sea.
'The combined Clyde, Orion, Fulmar and Auk operations will yield a number of operating efficiencies. We believe redevelopment of the Auk field will deliver significant increases in recoverable reserves and production volumes,' he said.
[email protected]
ak read more

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Western People: Christy and Padraig join Shell’s campaign in Erris

SHELL’S campaign to locate a controversial gas terminal at Bellanaboy in North Mayo took another twist at the weekend when it emerged that Western People journalist and columnist, Mr Christy Loftus, is to take up a position with the company.
Mr Loftus, a former President of the National Union of Journalists and a former Chairman of Mayo Co Board, has been appointed as external affairs advisor to Shell in Mayo. He is due to take up his new position in early March and will work out of the company’s main office in Bangor.
A native of Newport, Mr Loftus began his career with the Westport-based Mayo News before taking up a position with the Western People in the late 1970s. He is a founding member and chairman of the South West Mayo Development Company and a member of the Board of Meitheal Mhaigh Eo. He was also a member of the Mayo 2000 lobby group which campaigned in the late 1990s to bring the Corrib Gas find ashore in Mayo and lobbied for Objective 1 status for the western counties.
Commenting on the appointment, Mr James Laffey, Editor of the Western People, said Christy had been a loyal staff member for the past 28 years and he wished him the very best in his new role.
“Christy contributed a lot to the Western People during his career and I want to thank him for his long service. He is taking up a very challenging position but I have no doubt he will thrive in his new role.”
Christy Loftus said he was under no illusions about the mammoth task that Shell faced in Erris.
“I have been a supporter of bringing Corrib gas ashore in Mayo since the find was first discovered. To say that the project is bogged down at the moment is a major under-statement. Shell recognises that it has a huge amount of work to do to re-build the trust and confidence of the people in Rossport and the wider community in Erris. I hope I can play some role in helping to restore trust, re-build relationships and support Shell’s goal to work in partnership with the local community.”
Meanwhile, Shell E&P Ireland has also confirmed that it has employed the services of former County Secretary, Mr Padraig Hughes. Mr Hughes was Mayo County Secretary when the project was first mooted in the late 1990s and he has been working for Shell in a freelance capacity since the beginning of 2006.
Shell has also employed the services of former BBC journalist, John Egan, who is a native of Castlebar. Mr Egan, who took up his position shortly before Christmas, has been given the title External Affairs Manager. read more

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Pueblo Chieftain (USA): Talk turns to $2 gas as oil prices drop

Prospect for $2 gas returns as oil prices drop
By BRAD FOSS
THE ASSOCIATED PRESS
NEW YORK – Oil futures fell Monday and analysts said retail gasoline prices could soon dip below $2 a gallon in some parts of the country. But traders said any relief would likely be short-lived. They warned of an upturn in prices come spring.
‘‘We should see gasoline at the pump drop 15 to 20 cents in the coming weeks as it catches up with falling wholesale prices,’’ said James Cordier, president of Liberty Trading in Tampa, Fla. ‘‘But if the economy stays strong, gas prices are set for a pretty big rebound in April and May.’’
Light sweet crude for March delivery fell 60 cents to close at $61.24 a barrel on the New York Mercantile Exchange, as traders weighed lagging demand and bulging supplies against political tensions in major producing nations. Brent futures lost 9 cents to $59.55 a barrel on the ICE Futures exchange where the March contract expires at the end of the day.
Traders remained concerned about the international dispute over Iran’s nuclear activities and to a lesser extent unrest in Nigeria.
‘‘Healthy U.S. crude inventories – indicating a well-supplied market – would have justified a substantial downward correction but latest supply worries about Iran put a floor on declining prices,’’ said Vienna’s PVM Oil Associates.
Heating oil futures fell by less than a penny to $1.6386 per gallon, while natural gas futures dipped 7.3 cents to close at $7.243 per 1,000 cubic feet.
Front-month gasoline futures fell 3.09 cents to settle at $1.4312 per gallon, and are down more than 30 cents since Jan. 30. At the retail level, gasoline prices average $2.34 a gallon nationwide. In the Rocky Mountain and Gulf Coast regions, retail prices are about 10 cents below the nationwide average.
‘‘We will probably see some states this week with retail gasoline prices of $2 a gallon or lower,’’ said analyst Tom Kloza of Oil Price Information Service. However, ‘‘it won’t last into April,’’ he said.
In Tehran on Monday, officials announced that Iran, the second biggest oil producer in the Organization of Petroleum Exporting Countries, had indefinitely postponed its negotiations with Moscow over a Russian plan to enrich Iranian uranium and would consider withdrawing from the Nuclear Nonproliferation Treaty if it considers it detrimental to its nuclear plans.
Crude oil futures had slipped Friday on reports of less demand and bigger supplies. The International Energy Agency, the Paris-based energy watchdog, reported falling demand because of the high costs of crude.
The agency slashed its fourth-quarter growth estimate by 420,000 barrels a day to a negligible 80,000 barrels a day even as it maintained its forecast for 2.2 percent oil demand growth in 2006 due to expected strong economic expansion.
It pinned the big year-end demand drop on high energy prices, mild U.S. weather that cut heating demand, and market disruptions stemming from hurricanes Katrina and Rita in the United States.
The IEA also cut its estimates of demand growth in the first and second quarters of this year by 120,000 barrels a day, and by 130,000 barrels a day in the third quarter.
With oil prices retreating in recent weeks, Royal Dutch Shell PLC’s chief executive on Monday said Britain’s government should lower taxes on domestic oil producers in order to spur investment in North Sea drilling projects. Britain’s Treasury Chief Gordon Brown doubled a ‘‘windfall’’ tax on oil production in the British North Sea from 10 percent to 20 percent in 2006, bringing protests from oil companies and free market advocates. ‘‘If oil prices fall we’d like to see taxes fall,’’ Shell Chief Executive Jeroen van der Veer said at an industry conference, Dow Jones Newswires reported.
Associated Press Writer George Jahn in Vienna, Austria, contributed to this report. read more

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Nigerian Tribune: Army vows to restore peace in Niger Delta

THE Nigerian Army has said it will not relent in its efforts to restore peace and order in the Niger Delta region of the country as a sign of honour to its men who have sacrificed their lives in the cause to ensure a peaceful Niger Delta.
This assurance was given by the Commander of the Joint Operation Restore Hope, Brigadier General Elias Zamani, during the funeral service for the 14 soldiers who lost their lives during an attack on Shell’s Benisede Flow Station in Bayelsa State by militant youths.
General Zamani, who described the fallen soldiers as gallant men whose lives were cut short in their prime by their fellow brothers who had chosen to pursue personal interest through violence, added that their death was a huge loss to the nation, the armed forces and their families.
According to him, “for those of us remaining, the maximum tributes we can pay to these fallen heroes are not to relent our efforts until the national objective of total restoration of peace in the Niger Delta is achieved”.
He called on government to stand with the families of the dead soldiers and assured that the loss would not deter the force from its commitment towards restoration of peace in the Niger Delta region.
“We should not spare any effort to give the much needed supportive role to the deceased families, because the soldiers have served the nation gallantly right from the date they were enlisted into the Nigerian Army”, he said.
He appealed to ‘brothers’ in the militia groups to shun destructive tendecies and see dialogue as a better and more reliable way of registering their views. read more

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The Norman Transcript: Pennsylvania 'definitely taken the lead in wind power'

End staffing minimal but jobs pay well
By Mona Ridder
CUMBERLAND TIMES-NEWS (CUMBERLAND, Md.)
CUMBERLAND, Md. —
Considerable potential for positive economic impact from wind electric generation exists in the region as evidenced in the neighboring state of Pennsylvania.
Wind farm construction employs large numbers of people for short periods while the end staffing is minimal with only a few people required to maintain the facilities. The jobs, however, are considered well-paying.
Pennsylvania and New York are the largest wind generated electric producers in the eastern part of the United States, generating 129 and 186 megawatts, respectively, with West Virginia in third place at less than half that capacity with 66 megawatts.
“Pennsylvania has definitely taken the lead in wind power,” said Jim Cookman, vice president for development with US Wind Force, headquartered in Wexford, Pa. “Gov. (Ed) Rendell has put a lot of resources behind wind power development, including efforts to locate manufacturers in the state.”
In September, Gamesa, a Spanish manufacturer of wind generation components, announced its U.S. headquarters and East Coast development would be located in Philadelphia, where it is expected to generate 1,000 jobs in five years. A plant proposed for Ebensburg, near Johnstown, is to generate 500 construction jobs to be followed by 236 permanent positions for the manufacture of wind turbines.
“There’s no reason why Maryland and West Virginia can’t have the same kind of economic development in the wind industry,” said Cookman. “The cost of transporting the turbines and the blades, which are huge, is one of the biggest expenses in developing wind farms; it makes sense to manufacture them closer to where they’ll be used.”
It would also make maintenance and replacement less costly.
Energy as a whole is a target industry in state, according to Jan Dickinson of the West Virginia Development Office, noting the state is “rich in energy resources.”
“We are always trying to recruit manufacturing,” she said. “It is no secret that manufacturing is leaving the U.S. and we are targeting retaining and new manufacturing but not specifically manufacturing for the wind production industry.”
West Virginia has one wind project in operation with 44 turbines, the largest wind farm in the East.
The project is located on Backbone Mountain in Tucker County and will be dwarfed by the up to 200-turbine wind farm project being developed by Nedpower to be operated by Shell WindEnergy at Mount Storm in Grant County.
Tim O’Leary of Shell said that the company focuses on the development and operation of utility-scale wind farms.
“Working with our partners in Europe and the U.S., we have advanced rapidly from early pilot projects to commercial-scale wind energy production,” he said. “As wind energy becomes increasingly competitive with conventional power sources, we aim to be one of the industry’s leading players and a force for progress in this rapidly developing sector.”

He said that Shell has wind projects under development in Texas, Hawaii, California, Wyoming, Idaho and in Europe, and the company plans to continue to initiate other wind projects.
In addition to concerns about the environment, viewshed and issues related to the health and welfare of the people and animals living near the wind projects, there are people who don’t believe the relatively small amount of electricity produced by the large numbers of turbines warrant the cost.
The average generating capacity per wind turbine is a maximum of 2.5 megawatts, according to Cookman.
“There are smaller turbines that can generate 1.5 megawatts, and the size of the turbine used is determined by the site and wind potential, or regime, of the site,” he said.
Using 2.5 megawatt turbines operating at full capacity, it would require 72 turbines to meet the same output as the Mexico Farms AES Warrior Run coal-fired plant’s 180-megawatt output, according to the calculations.
The federal government concluded in a report in 2000 that the average cost of electricity from wind energy had dropped from 50 cents per kilowatt hour in 1980 to a projected 6 cents per kilowatt hour in 2000 in favorable wind regimes. Despite those gains in reducing costs, the wind technologies were still not generally commercially viable. A cost of 2 to 2.5 cents per kilowatt would be more acceptable economically, according to the report.
That is why states and the federal government have created incentives for wind farm projects, Cookman said, adding that with President Bush’s current push — as announced in his State of the Union address recently — for more research and development into renewable energy sources, specifically wind, those costs are likely to continue coming down to a point incentives will no longer be needed.
Mona Ridder writes for the Cumberland (Md.) Times-News. read more

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The Scotsman: Tax hike makes N.Sea oil tougher

By Simon Webb
LONDON (Reuters) – Higher taxes have made operating in the North Sea oil and gas sector tougher for producers but boom times continue, officials and company executives said on Tuesday.
Chancellor Gordon Brown took a bigger slice of record oil company revenues when he hiked taxes on profits by 10 percent in December.
But so far there has been little change in the number of companies trying to cash in on high oil prices by developing smaller North Sea fields that had previously been uneconomical.
“We still believe more companies are coming in than leaving,” said Paul Willcocks, Managing Director at Harrison Lovegrove, which advises on energy acquisitions and divestments.
Willcocks, speaking at a seminar on the North Sea in London, said that he expects an increase in the number of smaller deals for North Sea oil and gas assets of the size of $50-$100 million this year.
U.S. major ConocoPhillips may sell some North Sea assets after $35.6 billion purchase of Burlington in December, Willcocks said.
Canadian producer Talisman may also look to sell some assets as it consolidates last year's $2.1 billion buy of Paladin Resources, he said.
Royal Dutch Shell said on Tuesday that it was putting together a package of marginal undeveloped fields and exploration assets for sale this year.
The UK government has encouraged asset holders, especially oil majors, to sell marginal or undeveloped fields to smaller producers and independents in efforts to maximise output from the declining North Sea oil and gas sector.
CHALLENGING TARGET
Higher taxes have made reaching the government's ambitious output target of 3.0 million barrels of oil equivalent per day in 2010 more challenging, said Joan Macnaughton, Director General of energy at the UK's Department of Trade and Industry.
As things stand, industry projections are for production of 2.6 million boepd in 2010, she said. Output is currently 3.6 million boepd equivalent.
“Of course it will be a challenge to maintain commitment (to the UK North Sea),” she said. “It was a challenge after the last fiscal changes and it will be again this time.”
Producers blamed a surprise tax rise in 2002 for low drilling activity in 2003 and 2004.
Macnaughton said that glitches at UK fields last year may have tipped the UK into being a net oil importer after many years of exporting. But restored output and new projects coming on line should mean the UK will be a net exporter later this year and for a few more years.
The tax changes may delay some projects and will increase exposure among North Sea producers to oil prices, executives said.
“The market is now more sensitive to oil and gas fluctuations,” said Mike Bowyer, UK Vice President of U.S. oil service giant Halliburton .
Shell Chief Executive Jeroen van der Veer called on Monday on the British government to commit to cutting taxes on North Sea oil production if oil prices fall.
He said that would provide the kind of stability needed to guarantee investment in the UK's Continental Shelf.
Executives from oil majors Shell and Total on Tuesday reaffirmed their commitment to the North Sea sector.
“There remain enormous opportunities in the North Sea for everyone,” said Martin Tiffin of French major Total . “Our asset base can take us well beyond 2020.”
UK oil production peaked in 1999 and has been declining since as reservoirs are exhausted at ageing fields. Output declined at 10 percent per year in 2003-2004. read more

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PESN, Utah: Shell Oil May Have Spurred Gulf Quake

Extraction of oil, gas, and brines can trigger earth movements. The epicenter of the 5.2 earthquake on Feb. 10 coincides with Shell Oil's Brutus field. Could the Gulf Coast be priming for an Aceh-like tsunami?
by Paul Noel
Pure Energy Systems News
Copyright © 2006
It would appear that Shell Oil company may have triggered a 5.2 earthquake in the Gulf of Mexico. The location of a 5.2 quake recorded by the US Geological Survey on Feb. 10 is approximately centered near the Shell Oil operations under their gigantic floating platform “Brutus.” The earthquake happened in the zone affected by this particular oil and gas development.
With the heavy pressure to ramp up production and recover from the Hurricanes, it is likely that the operations are proceeding at breakneck speed. A nation desperate for oil in a world strangling for oil has to drive production at all costs. These heroic workers are driving against awful odds to try to keep the world oil supply coming.
At the same time the world is fast coming up against the realities that the damage from our dependence on oil is severe. This earthquake should serve as a warning. It is in a zone the US Geologic Servey considers to be at very low risk of earthquakes. (Ref.)
The earthquake here is most likely from unsettling the rock formations as a result of extraction of massive quantities of oil, gas and brines. This is a warning of things to come. This region is subject to conditions geologically that are similar to those which brought about the earthquake and tsunami at Ache, Indonesia. (Ref.)
The price of dependence on oil and gas while dragging our feet on development of alternative energy systems is starting to bring serious consequences. If the world demand for oil continues to grow, shortly the air pollution, earthquakes, land subsidence and other problems that result will seriously damage the environment world wide.
Do we have to see a tsunami flood the southern USA doing many times the damage of a Hurricane Katrina before people awaken and say that we need to slow down and change course towards a more sane energy policy. Is alternative energy so expensive when weighed against the damages we are starting to suffer? read more

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THE WALL STREET JOURNAL: Cnooc outbids rivals for stake in gas stations

By RENYA PENG
February 15, 2006; Page B12
BEIJING, China — China National Offshore Oil Corp. beat four rivals, including multinational heavyweights BP PLC and Royal Dutch Shell PLC, to acquire a stake in a chain of gasoline stations in Shanghai.
Cnooc, the state-owned parent company of Hong Kong-listed Cnooc Ltd., bought a stake of more than 50% in private fuel-distribution company Shanghai Xingcheng Oil Co., a Cnooc official said. Cnooc also outbid domestic competitors China Petroleum & Chemical Corp., known as Sinopec, and PetroChina Co. to buy Xingcheng's 22 gasoline stations and several oil tanks.
The Cnooc official didn't give details, and representatives of Xingcheng weren't available for comment. The purchase strengthens Cnooc's presence in oil-products refining and retailing in China. The company is China's largest offshore oil producer by volume, but has a very limited presence in refining and retailing gasoline in China.
Write to Renya Peng at [email protected] read more

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AFX Europe (Focus): Australia's Woodside Petroleum sees strong demand for LNG

Feb 15, 2006
SYDNEY (AFX) – Woodside Petroleum Ltd chief executive Don Voelte said demand for liquefied natural gas (LNG) is strong with customers lining up to buy gas from projects the company is planning to develop.
Voelte told a briefing after the group reported a jump in underlying profit for 2005 to a higher-than-expected 1.038 bln aud, that the market has been at its strongest levels for some time, adding that customers were looking for gas for delivery from 2008-2010, including China.

“China is coming back to us and getting very serious very fast,” he said.
But, Voelte said, other markets were opening up including the US where the company, 34 pct owned by Royal Dutch Shell, is hoping to supply Australian gas to the west coast.

Woodside is the operator of Australia's North-West Shelf project which will soon deliver its first LNG to Guangdong in China under a long-term contract with China National Offshore Oil Corp (CNOOC).
Voelte said first shipments to Guangdong are expected in June.
He said marketing of gas from the company's proposed wholly owned Pluto LNG project near the North-West Shelf project was basically complete while volumes from the North-West Shelf project were largely committed.
Voelte said this left the proposed Browse project as potential supplier to markets in China.
The Browse fields lie about 250 kms off the coast from Broome and hold an estimated 20.5 trln cubic feet of gas.
They comprise Woodside's biggest undeveloped gas resource and include the Scott Reef, Brecknock and Brecknock South fields in which BHP Billiton, BP Plc, ChevronTexaco Corp and Royal Dutch Shell own stakes.
(1 usd = 1.35 aud)
[email protected]
blh/tr read more

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AFX Europe (Focus): Australia's Woodside Petroleum year to Dec profit beats forecasts

Feb 15, 2006
SYDNEY (AFX) – Australia's largest oil and gas company, Woodside Petroleum Ltd, said its net profit for the 2005 year fell marginally to 1.107 bln aud from 1.146 bln in 2004, when earnings were inflated by assets sales.
But before one-off items Woodside, which is 34-pct owned by Royal Dutch Shell, reported a higher-than-expected 54.5 pct rise in annual profit, benefiting from higher production and strong oil and gas prices.
Woodside, operator of the North West Shelf liquefied natural gas (LNG) project off Western Australia, said net profit before one-offs rose to 1.038 bln aud from 671.8 mln a year earlier.
The result was ahead of a market consensus forecast of a 964 mln aud net profit and followed annual revenue rising 29.3 pct to 2.748 bln.
Woodside said improved volumes from existing offshore oil and gas fields as well as the new Mutineer-Exeter oil field off the Western Australian coast and acquisitions in the Gulf of Mexico boosted output 4.0 pct to 59.7 mln barrels of oil equivalent (boe) during 2005.
It forecast a 27 pct rise in 2006 output to 76 mln boe, reflecting production from new fields, including Chinguetti, off the coast of Mauritania.
The North West Shelf project will supply its first LNG to Guangdong in China.
The company said it remains in discussion with the Mauritanian Government about disputed amendments to production-sharing contracts although Chinguetti is not affected.
The latest year's net profit included significant items of 69.7 mln aud from asset sales while the 2004 was boosted by significant items totalling 474.6 mln aud, mainly due to the sale of a 40 pct interest in the previously owned Enfield oil field off the West Australian coast to Japan's Mitsui.
Shareholders will receive final 0.58 aud dividend, taking the total annual dividend to 0.93 aud, up from 0.59 aud paid for the 2004 year.
(1 usd = 1.35 aud)
[email protected]
blh/dg/dk read more

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Lloyds List: Shell's big game hunt for elephant projects

Van der Veer expects oil major to be tackling 10 mammoth developments by 2015, writes Martyn Wingrove
Feb 15, 2006
ROYAL Dutch Shell expects its higher capital investments this year to push through new elephant sized energy projects and to find the next generation of developments.
The Anglo-Dutch oil major has increased spending to $19bn, the highest of all the international oil companies, as it develops three huge projects and searches for more in the future.
Chief executive Jeroen van der Veer told the first day of International Petroleum Week in London: 'We will see more of what I call elephant projects. By 2015, I expect that Shell will have 10 of these under way, up from three today.
'We have almost doubled investment in five years from $10bn to $19bn, while exploration investment has gone from $1bn to $2.1bn.'
The London-listed group has turned its strategy around in two years, from an oil company known for downgrading hydrocarbon reserves to one that has ramped up investments and finding large fields.
It is pushing ahead with frontier projects such as the $20bn Sakhalin II campaign and developing non- conventional resources, including Canadian oil sands, to rebuild its international business.
'This year Shell is investing $19bn, with $4bn in the downstream and $15bn in upstream projects,' said Mr van der Veer. 'Of this, $2.1bn is in exploration and $13bn on developing our projects. Shell has the highest investments of all the international oil companies.
'We have a good development flow and opportunity set and we could have seen more than $19bn with our portfolio of projects.'
A large slice of its future spending will be on the elephant projects, where hydrocarbon resources are estimated to be more than 1bn barrels of oil equivalent.
These currently include Sakhalin II in eastern Russia, where two offshore oil and gas fields are under development and a liquefied natural gas plant is being built. It also includes the Bonga deepwater project in Nigeria, which started production late last year, and the huge Nanhai onshore development in China.
Shell is also searching for 'big cat' projects, where resources are more than 100m barrels; it found seven last year from its growing exploration programme, including four in Nigerian deep waters.
Mr van der Veer thinks there will be more of these projects to develop in the future but they will increasingly be found in ultra deep waters or harsh environments.
'Half of the conventional oil undiscovered is in deep waters or in the Arctic,' he told the IP Week event, run by the Energy Institute.

'Meeting future energy demand means we will need to explore in more remote regions, develop in ever deeper waters and overcome more difficult geology.
'All this means that energy projects are going to be bigger and more expensive.
'We should not underestimate the demands these massive projects will make on resources, people and finances.
'The scale of the investment required to meet global energy demand is immense. As an industry we will need to double the level of investment per year.' read more

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