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Posts on ‘March 30th, 2006’

Inner City Press: Iraq's Oil to be Metered by Shell, While Basrah Project Remains Less than Clear

BYLINE: Matthew Russell Lee, Inner City Press U.N. Correspondent
UNITED NATIONS, March 30 — From Iraq's Mission to the UN, there's finally an answer to the months-old oil metering mystery. Shell has been given the contract, and it will take from one to two years to implement. How the accountability of oil flows and sales until then will be tracked has not yet been addressed, nor has why it will take two years. For an oil port in Basrah, the process will be faster, but it remains unclear which company has been awarded the work. This follows a December 2005 statement by the International Advisory and Monitoring Board for the Development Fund for Iraq that the oil metering contract had been awarded to an American firm, followed by a January 2006 IAMB statement that nothing was being done. Now named are a Dutch-based company and a “project” agreed to by the U.S. Pentagon's Project and Contracting Office, recently in the news for its dealing with Halliburton. Inner City Press has put written questions to both IAMB and Iraq's Mission to the United Nations and will report results on this site.
— Jean-Pierre Halbwachs briefing reporters on 12/28/05
In a March 22 letter provided to Inner City Press on March 30, the UN's Jean-Pierre Halbwachs was informed that – “the Iraqi Ministry of Oil has concluded an agreement with the American Project and Contracting Office (PCO) to include a project for rebuilding the metering system in the Basrah oil port of the Southern Oil State Company, as part of the other projects that are funded by the American grant to the Iraqi Ministry of Oil. This project is in progress now and is expected to be finalized by 2006. Furthermore, a preliminary agreement was reached with the Shell Group to act as a consultant to the Iraqi Ministry of Oil on matters related to metering and calibrating which would include the establishment of a measuring system for the flow of oil, gas and related products within Iraq, as well as the export and import operations. This long-term development project will be implemented in stages that may be fulfilled in one or two years.”
The term in the letter, “Southern Oil State Company,” does not result in any hits either via the Google search engine nor (Academic) Lexis. The letter is signed by Iraq's Alternate Permanent Representative to the UN Feisal Amin Al-Istrabadi, described as “an American lawyer of Iraqi origin.” Click here for his curriculum vitae, via Depaul's law school — his legal practice has been in Indiana, although the c.v. refers to hazardous chemical spills and Petroleum Marketing Marketing Act cases. Inner City Press has put written questions — for the second time — to the Iraqi mission's listed press attaché, including:
“For this [Basrah] project, to be completed by the end of this year, has a contractor been designated? PCO was in the news earlier this week with regard to their audits of Halliburton's performance (as well as Foster-Wheeler). Direct question: does the above quoted mean that Halliburton has gotten or could get this 'included' project? Secondarily, why does the nationwide oil metering contract described in the second paragraph of the letter need to take two years? And what will be done in the interim?”
The same questions have been put to the chair of IAMB, the UN's Jean-Pierre Halbwachs. Watch this space.
UN Round-up: upstairs at the UN headquarters on Thursday, Secretary-General Annan met at noon with the chairman of Turkey's Koc Holdings which holds, among other things, a joint venture with Shell and 87,000 employees, on the occasion of Koc Holdings joining the UN Global Compact. At the noon briefing, it was asked how it is decided which of the Global Compact's signatories get to meet with the Secretary-General, and whether these companies — including Koc Holdings — might take questions from the press on their adherence to the Compact's principles, including human rights, perhaps at a new Corporate Stake-Out. These questions were answered in far less than three months:
From: [ ]@un.org>
To: Matthew.Lee [at] innercitypress.com
Sent: Thu, 30 Mar 2006 14:13:44 -0500
Subject: your questions on the Global Compact
Hardly ever does the SG meet with CEOs when they sign up. Mr. Koc was one of the rare exceptions because of the significance of the company's commitment to the country as a whole (Turkey) and the broader region. Also, Koc has deep partnership relations with UN agencies in the areas of health and education. Regarding your suggestion that the CEOs signing on to the Global Compact (GC) be made available to the press… the GC’s media guy, wrote the following to me: 'I like the suggestion, but as always in these cases, I guess this is ultimately up to the CEO. I would be very open to suggest it in advance of future CEO-SG meetings. However, our experience is that these CEOs are very tightly guarded by an army of PR staff who would probably advise against it. Nevertheless, I will be more than happy to connect interested journalists with the public affairs people of the CEO prior to future meetings of this type.' If you’re still interested in talking to Mr. Koc, it's Ms. Ayse Tuba Kadiraga, Public Relations Specialist, Koç Holding A.S…. Tuba will be traveling back to Istanbul this afternoon, but can be reached tomorrow.”
To tie it all together for now, including Shell getting the oil metering contract in Iraq, Koc Holdings' oil refinery joint venture with Shell is being challenged to the EU Court of Human Rights by the union Petrol-Is. What is Koc Holdings (and Shell's and even the SG's and Global Compact's) positions on this? Questions, questions… read more

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

THE NEW YORK TIMES: Price of Oil Trades Near $67 Per Barrel

By THE ASSOCIATED PRESS
Published: March 30, 2006
Filed at 2:06 p.m. ET
WASHINGTON (AP) — The price of oil traded near $67 a barrel Thursday amid persistent supply disruptions in the Gulf of Mexico and Nigeria, a U.N. standoff with Iran over its nuclear program and growing demand in the U.S. despite rising energy costs.
The market was also rattled by an announcement late Wednesday from Venezuela's oil minister that Exxon Mobil Corp., the world's largest publicly traded oil company, was no longer welcome in his country — the latest sign of tighter state-control of energy around the globe.
''All of these things are adding up,'' said Antoine Halff, director of global energy at Fimat USA in New York.
Light sweet crude for May delivery rose 50 cents to $66.95 a barrel on the New York Mercantile Exchange. Brent crude for May gained 50 cents to $66.05 a barrel on London's ICE Futures exchange.
Gasoline prices rose 2.68 cents to $1.981 a gallon (3.8 liters), while heating oil futures gained 1.8 cent to $1.87 gallon. Natural gas futures climbed more than 6 cents to $7.520 per 1,000 cubic feet.
Tensions between Exxon Mobil and Venezuela boiled over because the Texas-based company resisted tax increases and contract changes that are part of a policy by President Hugo Chavez's government to ''re-nationalize'' the oil industry. Rather than submit to new terms that will turn 32 privately run oil fields over to state control, the company sold its stake in a 150,000 barrel-a-day field to its partner, Spanish-Argentine major Repsol YPF.
''Exxon Mobil … preferred to sell to Repsol, its partner in the agreement, rather than adjust,'' Oil Minister Rafael Ramirez said in an interview with the state-run TV broadcaster. ''We said we don't want them to be here then,'' Ramirez added.
On Thursday, top officials of the five permanent Security Council nations plus Germany urged Tehran to freeze uranium enrichment, but a senior Iranian envoy defiantly rejected the call, saying his country's activities were ''not reversible.''
Iran, the No. 2 oil producer in OPEC, has been referred to the U.N. Security Council over fears it may want to misuse its nuclear program to make weapons.
In the Gulf of Mexico, oil output is still down by 343,000 barrels per day because of damage that occurred during last summer's hurricanes Katrina and Rita. That is roughly 23 percent below pre-storm output levels.
Nigerian oil output also remains a concern. Royal Dutch Shell PLC, the largest foreign oil company operating in the country, has shut in nearly half of its Nigerian production and says it won't resume operations until the country is safe enough for its workers. Some 600,000 barrels per day of Nigerian production has been shut in, according to IFR Energy Services in New York.
Concern about gasoline was also affecting the market.
In its weekly petroleum report, the U.S. Energy Department said Wednesday that gasoline inventories fell by 5.4 million barrels last week to 216.2 million barrels, about even with year ago levels. The decline came as refiners conducted maintenance on their facilities ahead of summer in the Northern Hemisphere, when fuel demand peaks.
The U.S. agency also said that motor gasoline demand averaged 9.1 million barrels a day over the last four weeks, which is up 1.3 percent from a year ago. The average U.S. retail price of gasoline is $2.50 a gallon, up 34.5 cents from the year before.
Associated Press Writers Natalie Obiko Pearson in Caracas, Venezuela, and George Jahn in Vienna, Austria, contributed to this report. read more

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

Financial Times: All-round gain offered

By Ross Tieman
Compliance with legislation, regulations, directives and codes has never been more challenging. Though business conduct has always been constrained by law, today the volume of legislation and rules, and the pace of change, have increased so much that meeting the requirements has turned compliance into a corporate discipline in its own right.
Some company chairmen complain that compliance is distracting them from strategic management. Others shrill about the mounting costs.
This has come about because, in Europe and the US especially, legislators have taken companies to task over their behaviour. In the US the Sarbanes-Oxley Act, designed to prevent corporate scandals, has established tough new standards for company directors, while in the UK and continental Europe companies must comply with voluntary governance codes, or explain their failure to do so.
Companies operating within the European Union must also comply with a tidal wave of new pan-European directives.
All this change coincides with corporate globalisation. National industrial or services champions have been spurred by market opening into global rivalry. Today they must comply with the rules in more jurisdictions than ever before at a time when the rules almost everywhere are changing by the month.
Yet every cloud has a silver lining – for the bold. The challenge of compliance has become so great that mastering compliance has become a tool to achieve competitive advantage.
Compliance requires leadership from the top. The Combined Code on Corporate Governance, effective in the UK since 2003, gives board directors new responsibilities. The code encourages quoted companies to separate the roles of chairman and chief executive, ensure that more than half the directors are independent, and calls for committees to oversee the key functions of audit, appointments and remuneration. Its effect, increasingly, is to create a single board that combines the functions of the supervisory board and the management board common in continental Europe, obliging the freewheeling chief executive to work within a collegiate framework.
US governance laws, codified and backed by tough penalties, leave the executive chairman in charge but require the chairman and the finance director to certify a rigorous paper-trail of evidence that the company is meeting its obligations.
Can such measures deliver better corporate governance? Investors see a link between high standards of governance and corporate longevity. Think of Cadbury Schweppes, the UK chocolate and fizzy drinks company whose former chairman, Sir Adrian Cadbury, was one of the pioneers of corporate governance reform.
Shares in Shell, the Anglo-Dutch oil group, plummeted last year after it understated its oil reserves and incurred a record £17m fine from Britain’s financial and securities regulator, the Financial Services Authority. But its corporate governance reforms that followed prompted a significant re-rating by the markets.
Anthony Carey, a partner at accountant and adviser RSM Robson Rhodes responsible for board evaluation, was project director for Britain’s Turnbull working party on risk management. He says: “A strengthened selection process and improved definition by the Combined Code on Corporate Governance of the role of the non-executive director makes it easier for non-executives to constructively challenge management and also to contribute on strategic issues.”
He says boards should focus on the value that reform can deliver, and check there are key performance indicators to ensure it is achieved.
Overhauling the boards of companies takes time. Last October, the Association of British Insurers, representing many of the country’s biggest investors, analysed the annual reports of 477 UK quoted companies and found that only 46 per cent of FTSE 100 companies stated that they were fully compliant with the code.
But Peter Montagnon, the ABI’s investment director, is encouraged by that. “If companies still don’t have the right balance on the board, that doesn’t mean they aren’t seeking it,” he says.
Achieving good governance with compliance is “about strategic decision-making and management risk,” he says. “It has little to do with the mechanical implementation of a rule book.”
Directors alert to corporate governance obligations have become focused on compliance throughout their organisations.
Perhaps the biggest compliance challenge today for companies operating in Europe is to comply with the stream of directives from Brussels designed to create a single European market in financial services. The regulatory landscape has become increasingly codified and complex.
Abesh Choudhury, an associate in the London office of US law firm Cleary Gottlieb Steen & Hamilton, says: “The thrust of a lot of new regulations is to focus ultimate responsibility on senior management.”
Paul Nelson, head of the financial markets practice at law firm Linklaters, concurs. “We have seen over the past 15 years a real professionalisation of the compliance industry,” he says.
A company’s compliance director for Europe will typically be a member of its European board. And a typical European financial institution will employ 100-200 in its compliance department.
One specialist recruitment agency reckons that 2 per cent of opportunities advertised in the UK financial services industry are now in compliance. Graduates with just three years’ compliance experience are earning more than £40,000 a year, and for top posts salaries are well into six figures.
Because skilled compliance officers are in short supply, salaries soared 17 per cent last year.
No wonder that universities, working with industry, are now offering courses to fill the gap. read more

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

Financial Times: Penalties: FSA flexes its muscles with tougher action

By Phil Manchester
The Financial Services Authority, the UK regulator, is flexing its muscles. Since 2001, when it assumed new powers under the Financial Services and Markets Act 2000, the FSA’s Enforcement Division has handed out increasingly high penalties.
In 2001-02, its first full year of operation under the new regulations, the FSA imposed fines of just over £10m. Fines rose slightly in 2002-03 and reached £12.5m in 2003-04. In 2004-05 – the latest complete year – total fines hit £22.2m and by February 2006, with two months still to go, fines for the current year stand at £16.2m.
Although the 2004-05 total was skewed by the £17m fine on oil company Shell for mis-stating its oil reserves, the trend in penalties is definitely upwards.
The increased level of fines is not, however, reflected in the number of cases the FSA has pursued.
The FSA has completed only 13 cases so far in the current year. In 2004-05, it completed 31, while in its first two years the FSA’s caseload was more than 70.
The change is the result of a deliberate policy by the FSA to pursue fewer cases – but impose higher fines. Margaret Cole, director of enforcement at the FSA, re-emphasised the change in a speech to the Securities and Investment Institute Compliance Forum in January this year.
“We will focus our enforcement activities on those areas which pose the greatest risk to our statutory objectives. We will be working very closely with the business units to ensure that our enforcement resources are deployed strategically to address cases and issues which are priorities for the FSA,” she said.
She added that this does not exclude investigation of transgressions that might lie outside the “priority strategic areas”.
The FSA has a wide brief to supervise financial dealings of companies operating in the UK, from high street financial advisers to giant corporations. Enforcement is only part of its activities, employing about 8 per cent of its 2,600 total headcount.
It is generally acknowledged that the FSA’s approach to enforcement has been successful. Headline-catching high-profile cases over the past two years such as Shell, Citigroup, Lloyds TSB and Credit Suisse First Boston International have shown the FSA to be tough on those that misbehave.
“It is certainly working – as those regulated firms and individuals who have broken the rules have found out,” says Gary Dixon, group chief executive of specialist Compliance Solutions. He goes on to say that the FSA’s broad approach to compliance means that penalties are often a last resort: “The FSA has a number of different ways of achieving its goals. If the first one does not work, then it can move on to the next one.”
Peter Bevan, a partner in the financial markets group at law firm Linklaters, says the FSA’s increased enforcement activity has led to quantifiable improvements in corporate governance:
“We have done a lot of work reviewing risk management controls and we have seen a huge amount of movement towards best practice. It is incorporating enforcement as part of its broader activities.
“Increasingly, the FSA sends in an enforcement officer as part of the team in its regular visiting programme.”
The relatively small number of penalties is, says Mr Bevan, a reflection of the industry’s positive response to compliance:
“When the FSA started in 2001, it began with a strong enforcement regime and it was assumed that it would take a lot of scalps. Although there have been some high profile cases, there have not been as many as expected.”
He goes on to say that the FSA has a unique relationship with those it supervises:
“ It is not like normal litigation because there is a continuing relationship between the FSA and the companies it supervises.”
Tim Kendal, a fraud and regulatory specialist at 2 Bedford Row, a London barristers’ chambers, agrees: “In these sort of investigations where the FSA is prosecutor and judge, they would rather deal with it administratively,” he says.
“They want to avoid legal action because, if they don’t win, the costs and the negative publicity would be destructive. There are, of course, exceptions where there could be a public interest in bringing it to court.”
Mr Kendal suggests the penalties for non-compliance could be higher – although the bad publicity is likely to be more effective in the long term.
“Although the Shell fine, for example, seems large, it’s piffling compared to those handed out in the US. Its effect on Shell is not going to amount to much. But what large corporations don’t like is the bad publicity that they are not compliant or that they may be abusing market rules.”
After only five years in its enhanced role as a “super regulator”, the FSA has shown that it can be tough on villains – whether corporate or individual.
The continued expansion of the financial sector and the prospect of further innovation in financial instruments means the FSA will face yet more challenges – and may well have to get tougher. read more

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

CNN Netscape News: Oil above $66 after Iran defies U.N. call

By Janet McBride
LONDON (Reuters) – Oil climbed further above $66 on Thursday, toward its $70 record, after Iran rejected a U.N. Security Council demand that it halt uranium enrichment.
“There's got to be a crunch point over Iran,” said Geoff Pyne, an independent oil analyst. “At the end of the day Iran is intent on uranium enrichment and the West won't allow it.”
U.S. crude (CLc1) stood at $66.58 a barrel at 1306 GMT, up 13 cents. London Brent crude (LCOc1) was up 50 cents at $66.05.
The U.N. Security Council unanimously adopted a “presidential statement” late on Wednesday calling on Iran to freeze its uranium enrichment work.
But as the five permanent Security Council members and Germany met in Berlin to discuss their next step on Thursday, Iran's ambassador to the U.N. atomic agency ruled out complying.
Oil prices touched their highest point since February 2.
In real terms oil is at levels unseen for a quarter of a century. Prices have climbed from below $20 in a four-year rally partly driven by fast-growing Chinese demand. Supply disruptions in Nigeria and Iraq have helped to fire this year's gains.
Analysts Goldman Sachs stuck to their forecast that U.S. WTI crude would average $69.50 a barrel over the rest of 2006. They noted world economic growth was on a firm footing.
“Although Goldman Sachs economists expect a slowdown in the U.S. economy in the second half of 2006, the continuing recoveries in Europe and Japan, combined with strong growth in China, should make global growth more balanced, and more sustainable into 2007,” they wrote in a research note.
NIGERIA PIPELINE RESTART
Oil has held above $60 for more than a month, partly buoyed by rebel attacks in Nigeria that have shut a quarter of oil output in the world's eighth biggest oil exporter.
Some of the lost production struggled back on Thursday when Italy's Agip (ENI.MI) lifted a force majeure on exports from its Brass terminal after repairing a sabotaged pipeline, a shipping agent said.
Attackers blew up the Tebidaba-Brass pipeline on March 17, forcing Agip to shut 75,000 barrels per day oil production and causing a spill. Some 455,000 bpd of Royal Dutch Shell (RDSa.L) production remains closed, however.
U.S. GASOLINE
With so many question marks over supplies, the market is extremely sensitive to demand data. The United States, which uses over 40 percent of the world's gasoline, reported a sharp 5.4 million-barrel drop in weekly stocks on Wednesday.
“We continue to believe gasoline stocks will tighten further in coming weeks,” said Citigroup analysts in a note.
Analysts at BNP Paribas agreed.
“The gasoline market will still be tight over the summer. Last year refineries had to run at high rates of capacity utilisation to meet demand and a similar outcome is likely this year. This should provide support for the WTI price right through the year,” they said.
(additional reporting by Neil Chatterjee in Singapore) read more

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

allAfrica.com: Nigeria: Ogoni Oil Spill Was Not Sabotage – Rivers Govt

This Day (Lagos)
March 30, 2006
Posted to the web March 30, 2006
John Iwori
Port Harcourt
As the oil spill in Kegbara Dere community in Gokana Local Government area of Rivers State continues to generate ripples, the state government has ruled out sabotage, saying Shell made frantic efforts to contain its spread.
Making the position of the state government known in an interview with newsmen yesterday, Commissioner of Environment, Dr Roselyn Konya, said the spill was as a result of aged pipes used by the multinational oil company several years ago.
According to Konya, all environmental regulatory bodies, both federal and state, have confirmed that the spill did not result from sabotage or vandalism.
The spill, which flowed between Friday and Sunday, affected Kpor, Mogho, K-Dere, B-Dere and Bara communities.
The commissioner said not less than 1,000 barrels of oil was lost to the spill, adding that the state government had ordered the owner of the pipes, Shell Petroleum Development Company (SPDC), to go to the site and start cleaning the spill.
According to her, the pipe that spilled oil had undergone repairs last year, adding, “after the repairs, we felt that there may not be any other disaster in the area.”
While expressing regrets that the spillage had caused a lot of damage to both crops and soil in the area, he said the state government has promised to send relief materials to victims of the spillage.
The state Governor, Peter Odili, visited the spill site on Monday and promised that the victims would be well compensated, and immediately ordered Ministry of Environment to get the list of those that have farmlands in the spill area. read more

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

RIA Novosti: Russia to build 4 tankers for Sakhalin II operator

12:42 | 30/ 03/ 2006
MOSCOW, March 30 (RIA Novosti) – Russia is expected to build four vessels to deliver oil and gas under the Sakhalin II energy project being implemented on Russia's Far Eastern island, the project operator said Thursday.
The shipyard based in St. Petersburg, Russia's second biggest city, will build two ice-breaking tankers, and a shipbuilding plant in Primorye Territory in the Far East two more vessels under a 15-year contract between Sakhalin Energy and a Russian-operating affiliate of A.P. Moller-Maersk group, which runs about 1,000 vessels and drilling platforms across the world.
Sakhalin Energy, a Dutch-British-Japanese venture that is developing two vast fields with estimated recoverable reserves of 150 million metric tons of oil and 500 billion cubic meters of gas on Sakhalin, is expected to receive six vessels from the group in 2007. They will operate under the Russian flag and cost some $140 million overall.
Sakhalin Energy, which is also building an oil terminal and a liquefied gas plant, the first one in Russia, will use the four vessels to deliver oil and liquefied gas to foreign consumers from the southern Aniva Bay.
The vessels' overall towing capacity is at least 70 metric tons. They will be fitted out with equipment to contain oil spills and fire-fighting devices. Each vessel will be operated by six-member Russian crews.
Sakhalin Energy, owned by Royal Dutch/Shell (55%) and Japan's Mitsui (25%) and Mitsubishi (20%), is working in Russia under a production sharing agreement that gives the company major tax breaks in exchange for a certain share of the output. The project, which is being implemented in difficult climatic conditions, has been complicated by environmental obstacles and repeated spending delays on the part of the Russian authorities. read more

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

Daily Telegraph: Slump in petrol reserves oils the wheels as bid fever hots up

Lower-than-expected oil supply figures and renewed speculation of a bid for BG pushed London's oil stocks and the FTSE 100 higher.
Strong trading in the oil majors underpinned a rise of 23.5 to 5959.2 in the blue chip index, offsetting falls for 40pc of the constituents.
BG headed the top flight throughout the day, closing up 30½ – or 4pc – at 734p. The rise followed renewed talk of a bid from Exxon Mobil at 950p a share and came despite the shares going ex-dividend. Exxon Mobil was not available for comment and BG declined to talk about the speculation.
Royal Dutch Shell, BP and Cairn Energy all responded positively, climbing 19p to £18.63, 5½ to 668½p and 25p to £21.60 respectively. The shares were also boosted by oil inventories data from the US Department of Energy showing that motor gasoline stocks had fallen by 5.4m barrels.
Angus Campbell, of spread betting firm Finspreads, said: “The rally was very much down to energy. The strengthening oil prices in the last few days has also driven the oil stocks higher.”
Elsewhere, investors welcomed better than expected, fourth-quarter figures from supermarket group J Sainsbury, showing a 5.3pc increase in like-for-like sales.
Steve Davies, of Numis, said: “In our view, Sainsbury's is very much in the sweet spot of food retailing at the moment.”
Sainsbury's shares rose 5¼ to 332¼p. Other top risers included Intercontinental Hotels Group, up 27½ to 928p, after UBS analysts upgraded the stock from “neutral” to “buy” and its target price from 930p to £11.30.
Vodafone regained some of Tuesday's losses, putting on 2½ to 122p after investors reconsidered the impact of European Commission proposals to cut roaming rates by up to 60pc.
Dresdner Kleinwort Wasserstein said Tuesday's 4pc drop in Vodafone shares showed the market “over reacted”. “We recognise the negatives of roaming regulation for operators. However, we also believe that roaming rate reductions should also lead to greater usage amongst non-business users.”
BAA rose 11½ to 838½p after a spokesman for Spain's Grupo Ferrovial SA said it was still considering all of its options with regards to acquiring the airport group.
On the downside, Scottish & Newcastle, one of a number of stocks to go ex-dividend, was the biggest blue chip faller, down 17 to 528p. Others included Amvescap, 5½ lower at 545p and BSkyB, down 2½ at 540½p.
Standard Chartered Bank said it was seeking merger and acquisition activities in Taiwan and other areas in the Asia Pacific but the news failed to help the shares, which fell a further 25 to £14.57 on fading hopes of a bid from Singapore's Temasek.
However, continued bid speculation lifted Royal Bank of Scotland 12p to £18.52 and Alliance & Leicester 11p to £11.90. Market rumours suggested Alliance & Leicester had already been approached about a bid. Spanish bank Banco Santander SA was considered as a potential suitor, along with France's Credit Agricole. Alliance & Leicester would not comment.
RBS was linked with a possible bit from Citigroup. But a source close to the situation said senior management at Citigroup had made it clear they were not in the mood for a transformational acquisition.
RBS made no comment. Citigroup was not available for comment.
Copper miner Kazakhmys shed much of its recent rise, dropping 8½ to 953½p. Analysts predicted yesterday that full-year pre-tax profits, buoyed by higher copper prices, would be 31pc better at $565m (£326m).
Troubled retailer Woolworths said like-for-like annual sales had fallen 4pc and warned of “tough trading conditions” in the year ahead. But its shares rose slightly to 35¼p.
The FTSE 250 rose 4.7 to 9820.8. Brit Insurance Holdings, the Lloyd's of London insurer, topped the mid-line risers list, adding 7p – or 8pc – to 98p after the High Court cleared plans to move £180m from the share premium account to distributable reserves.
Hikma Pharmaceuticals ticked up 18 to 408p after the Jordanian generic drug maker topped expectations with a 9pc rise in full-year profits to $64.4m pre-tax.
In other trading, Isoft, the software group, slumped 27¾ – or 16pc – to 148½p, after Accenture said it would take a $450m hit on a contract to update computer systems in the NHS, partly blaming delays in software delivery from Isoft.
Dairy Crest rose 6¾ to 481½p after it said strong sales of branded products such as Cathedral City cheese had helped it to offset oil-related cost rises. read more

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

AP Worldstream: Oil prices pull back after surging on U.S. data showing decrease in gasoline supply

Mar 30, 2006
Crude oil futures pulled back Thursday in early Asian trading after a 38-cent increase on the previous day on U.S. data showing a large decrease in domestic supplies of unleaded gas.
Light, sweet crude for May delivery fell 35 cents to US$66.10 a barrel on the New York Mercantile Exchange, morning in Singapore. Gasoline prices slipped less than 1 cent to US$1.9465 a gallon (3.8 liters) while heating oil futures also dropped less than 1 cent to US$1.8460 a gallon.
Last week's decline in commercial gasoline inventories in the United States was the fourth in as many weeks, and comes as refiners conduct maintenance on their facilities ahead of the Northern Hemisphere's summer driving season, when fuel demand peaks.
In its weekly petroleum report Wednesday, the U.S. Energy Department said gasoline inventories fell by 5.4 million barrels last week to 216.2 million barrels, about even with year ago levels. The agency also said that motor gasoline demand averaged 9.1 million barrels a day over the last four weeks, which is 1.3 percent above year-ago levels.
The average retail price of gasoline in the U.S. is $2.50 a gallon, up 34.5 cents from a year ago.
Inventories of distillate fuel, which include heating oil and diesel, slid by 2.5 million barrels to 124.2 million barrels, but that was 15.4 percent higher than last year. U.S. crude inventories rose by 2.1 million barrels to 340.7 million barrels, or 8.2 percent higher than last year.
Prices also continue to respond to concerns about supplies from Nigeria and the Middle East.
The outlook on Nigerian oil output remained uncertain. Royal Dutch Shell PLC, the largest foreign oil company operating in the country, has shut in nearly half of its Nigerian production and says it won't resume operations until the country is safe enough for its workers.
Iran, the No. 2 oil producer in OPEC, also remains a potential source of concern. It has been referred to the U.N. Security Council over fears it may want to misuse its nuclear program to make weapons, but the council has been at loggerheads over U.S.-led efforts to ratchet up the pressure on Tehran.
Copyright 2006 Associated Press read more

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THE NEW YORK TIMES: The New Face of an Oil Giant

March 30, 2006
By JAD MOUAWAD
If Rex W. Tillerson has his way, Exxon Mobil will no longer be the oil company that environmentalists love to hate.
Since taking over as Exxon's chairman three months ago from Lee R. Raymond, his abrasive predecessor who dismissed fears of global warming and branded environmental activists “extremists,” Mr. Tillerson has gone out of his way to soften Exxon's public stance on climate change.
“We recognize that climate change is a serious issue,” Mr. Tillerson said during a 50-minute interview last week, pointing to a recent company report that acknowledged the link between the consumption of fossil fuels and rising global temperatures. “We recognize that greenhouse gas emissions are one of the factors affecting climate change.”
But despite the shift in style to a less adversarial tone, the substance of Exxon's position has not changed with the new chairman. The company said the recent report only clarified its long-held position on global warming. Indeed, Mr. Tillerson noted that he, like Mr. Raymond before him, remained convinced that there was “still significant uncertainty around all of the factors that affect climate change.”
To Fadel Gheit, a longtime industry analyst at Oppenheimer & Company in New York, Mr. Tillerson certainly presents a kinder, gentler face for Exxon. But in the end, Mr. Gheit cautioned, do not expect much difference between Mr. Tillerson and Mr. Raymond.
“It's the same old wine in a new bottle,” he said. “You can't expect a company this size to change on a dime, but you might see changes in how it projects its image to the public, to its clients.”
“Lee was impatient,” he added. “Rex is firm, but with a smile.”
Mr. Tillerson, who succeeded Mr. Raymond in January, said he saw no reason for any sharp departure in strategy. Exxon's business is about increasing oil and gas supplies to consumers, he said, not chasing alternatives that offer little prospect of replacing the fossil fuels that he views as the only realistic way to meet the world's huge and growing demand for energy.
In contrast to rivals at BP and Royal Dutch Shell, which plan to invest billions of dollars in the next decade to develop renewable energy sources like wind and solar power, Mr. Tillerson sees Exxon's future as still firmly tied to oil and natural gas.
The answer to today's high prices? “More supplies.” President Bush's reference to America's “addiction to oil”? “An unfortunate choice of words.” Exxon's role in society? “A good business, and what we do brings good things to people.”
“To say suddenly that there is something wrong about that,” he said, “I can't connect with that.”
With 30 years at Exxon, Mr. Tillerson has taken over the company at a time when the oil industry faces formidable new challenges. Not since the 1980's has there been as much talk about energy costs and the nation's dependence on oil.
After nearly two years of high energy prices, oil companies are facing public discontent at $2.50-a-gallon gasoline and political pressure over the companies' record profits. Mr. Tillerson said the situation offered him an opportunity to better explain his company's position.
“The only thing I've said to people will change, maybe, is the management style, the way I communicate,” Mr. Tillerson said. “We're all individuals. Lee Raymond is Lee Raymond. He has his style. I am Rex Tillerson and I have my style.”
Whatever Mr. Raymond's legacy on the environmental front, there's no arguing with Exxon's financial success. He pulled the company far ahead of rivals by engineering the 1999 merger with Mobil that partly recreated the original Standard Oil trust.
Exxon is now the world's largest publicly traded oil and gas producer. Last year, its net income surged to $36.1 billion, the highest for any American corporation and a 43 percent jump from the previous year. That is a legacy Mr. Tillerson is proud to defend.
But to its many critics, Exxon, based in Irving, Tex., is locked in an increasingly frustrating race for additional oil supplies and is failing to help develop alternative fuels, curb consumption and act on the real threat of global warming.
“They have to be part of the solution,” said Kert Davies, a research director at Greenpeace. “They have too much money; they are too powerful. Without Exxon pulling with the rest of the world, it will take longer to solve global warming.”
For Shawnee Hoover, the campaign director of Exxpose Exxon, a coalition of the nation's leading environmental groups, including Greenpeace and the Sierra Club, “Exxon has this prehistoric culture.”
She added: “They dig their heels in.”
But at Exxon, executives see very little reason to alter a course that has proved exceptionally profitable.
In a capital-intensive business, the company's obsession about costs has allowed it to outperform all its rivals. Its rate of return on capital employed, which the company says is the best indication of performance and cost management, reached 31 percent last year. The second-highest return among the giant oil companies, BP's, was 20 percent.
“Exxon has really been about discipline,” said Daniel L. Barcelo, an analyst at Banc of America Securities. “What Exxon brings to the table is their balance sheet, the technical expertise, and their operational management and development. That's where they shine.”
But he said the company's conservative management also had a flip side. “Others have been more willing to take risks,” Mr. Barcelo said. “Some say Exxon is actually being blind and missing out on huge opportunities for growth.”
Indeed, oil analysts argue that the company has been plowing too little money back into finding hydrocarbons while giving too much back to shareholders. Oil and gas production as well as reserves have remained mostly flat for the last five years. Last year, Exxon paid $23.2 billion in dividends and share buybacks, more than the $17.7 billion it spent on exploration and development.
A native of Wichita Falls, Tex., Mr. Tillerson, who turned 54 this month, joined Exxon in 1975 as a production engineer after graduating from the University of Texas with a degree in civil engineering. He later ran some of Exxon's American operations. In the early 1990's, he was responsible for negotiating the company's investments in Sakhalin Island in Russia, as well as in the Caspian Sea.
Since he started at Exxon, the energy business has changed radically. Easy-to-find oil has been mostly found, opportunities for new resources are scarcer, competition is rising and governments are tightening the screws on international oil companies.
But after taking over as chairman, Mr. Tillerson has already scored two major coups: gaining access to the world's fourth-largest oil field, in the United Arab Emirates, and prevailing in a five-year-old dispute over the development of Indonesia's largest untapped oil reserves.
Mr. Tillerson met with each country's leaders to break deadlocked talks or make a final pitch for his company. In Indonesia, the government fired the head of the national oil company, who opposed Exxon. His successor quickly signed a deal.
But if both agreements proved a success for Mr. Tillerson, they also mask a starker reality for oil companies: their access to the world's top hydrocarbon deposits is more limited than ever. At Exxon, the problem is magnified by the company's size. Each year, its geologists must find huge amounts of oil and gas — nearly 1.5 billion barrels — just to replace the company's production of about 4 million barrels a day.
The model for Exxon's expansion was perhaps best displayed in Qatar, a small Persian Gulf state holding the world's third-largest natural gas deposits, after Russia and Iran. In the early 1990's, Exxon approached the Qatari government with an offer to serve as a joint partner. Today, Exxon is the largest foreign investor in Qatar and the nation is on track to become the world's leading liquefied natural gas producer.
“We are looking for the large opportunities,” Mr. Tillerson said.
Referring to Qatar, Mr. Tillerson said “that approach can be replicated around the world.”
But can it? Recent setbacks in Venezuela and Russia suggest the obstacles are multiplying. After briefly welcoming foreign oil producers, Russia has now mostly shut the door to new foreign investment. In Venezuela, Exxon is battling the demands of President Hugo Chávez's nationalist government, which wants to increase royalties and other taxes on foreign investors. But rather than give in and set a precedent, the company prefers to scale back its investments or shut fields.
Still, Mr. Tillerson insisted that Exxon was not constrained by a lack of prospects or partners. “There are other opportunities,” he said, “in the Middle East, in the Caspian, in other parts of the world where we will continue to take the same approach.”
This month, at Exxon's annual session for Wall Street analysts, top executives outlined 22 major projects over the next three years, from Angola to Norway, Malaysia to the North Sea. For 2009 and beyond, they identified another 32 prospects.
To develop these projects, the company plans to increase its capital spending to $20 billion a year by the end of the decade. Exxon hopes to increase its oil and natural gas production to five million barrels a day by 2010 and lift its daily capacity by a total of two million barrels after 2015.
Dismissing the view that the world is running out of oil, Mr. Tillerson said there was still plenty more to be found to meet what Exxon expects will be a 50 percent rise in global energy demand by 2030.
At the same time, he defended Exxon's record of investing in research for alternative fuels, citing a 10-year, $100 million contribution to the Global Climate and Energy Project at Stanford, which focuses on long-term technological research. “We are going to continue to use fossil fuels,” he said. “We are looking for the fundamental changes, but that's decades away. The question is, What are we going to do in the meantime?”
Three months into the job, the changes at the helm of Exxon are mostly evident in small, impressionistic touches.
At a refiners' conference in Salt Lake City last week, for example, Mr. Tillerson urged other managers to get the industry's message out by, among other things, attending Rotary Club and PTA meetings.
And at a recent news conference, he displayed a lighter touch that one rarely associates with Exxon executives. In reply to a question about what he thought would happen to oil prices this year, for example, Mr. Tillerson offered this response: “If I knew, I'd be living on a Caribbean island with my flip-flops and a laptop, working just two hours a day.” read more

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