March, 2006:

By Cassandra Braun
CONTRA COSTA TIMES
A potentially hazardous chemical release at the Shell refinery in Martinez this afternoon prompted authorities to issue a shelter-in-place warning to residents. Sirens sounded and automatic telephone warnings began about 4:15 p.m. after a sulfur dioxide release at the refinery. Residents were advised to stay inside and close windows and doors.
The extent of the release was not immediately known, but there did not appear to be a fire, said Steve Morioka, Contra Costa County Health Services hazardous materials specialist.
Sulfur dioxide has a distinctive odor and is a strong irritant to eyes and throat and also causes breathing difficulty for people with asthma, Morioka said.
Authorities had no further details. read more

Mar 27, 2006
LAGOS (MarketWatch) — The governor of Delta State in Nigeria, James Ibori, on Monday completed the handover of three foreign workers who had been held hostage by militants, the governor's spokesman said to Dow Jones Newswires.
“The hostages were handed over to officials of Shell (RDSA), their employer, in the presence of embassy officials from the U.S. and U.K.,” according to Abel Oshavire, who spoke by phone on the way back from Warri, where the handover took place.
The three men, two from the U.S. and one from the U.K., as well as six others released by the militants on March 1, are employees of Wilbros, an oil services contractor working for Shell in Nigeria.
Oshavire explained the release of the workers would have lingered further but for the confidence that the militants have in Ibori, who led the efforts to secure freedom for the kidnapped men.
“The governor has always been very sincere and free with these people (the militants), and always puts his reputation at stake with them,” Oshavire said.
He said that Ibori has assured the militants there would be no more attacks on them by the Nigerian government. Ibori also assured the militants that the Delta State government would negotiate with the Nigerian government for “justice, equity and a better Niger Delta region.”
“So they believed him, and on the basis of this, they were moved to release the hostages to our negotiating team,” Oshivare said. He spoke as they drove from Warri to Ibori's country home in Oghare, where he had been conducting the rescue efforts.
“The governor is very happy and hopes we will never walk this path again,” Oshivare said. The hostages had been held Okerenkoko, which is believed to be the stronghold of Ijaw militants in the Niger Delta.
The Nigerian government had warned last week it would not negotiate with the militants for the release of the hostages, but promised the problems of the Niger Delta would be discussed after the hostages had been released.
Demands by the militants include a greater control of revenue accrued from oil and gas, clean up of the region that has been polluted by oil exploration and production, and the provision of basic infrastructure in the area.
The Delta State government hopes all issues “will be resolved amicably to the satisfaction of both parties,” Oshivare said.
-Contact: 201-938-5400 read more

By Times Online, and AP in Warri, Nigeria
Three remaining hostages were released by militants in Nigeria’s oil-rich southern delta today, more than five weeks after the oil-industry workers were kidnapped.
Abel Oshevire, a spokesman for the southern delta state government, said that Cody Oswalt and Russell Spell, both American, and Briton John Hudspith were released just before dawn today and were now with the local governor, James Ibori. “They are here with us now and are all in good health,” Mr Oshevire told reporters.
The militants, responsible for a wave of recent attacks in southern Nigeria, took nine foreign oil workers hostage on February 18 from a barge owned by Houston-based oil services company Willbros Group Inc., which was laying pipeline in the delta for Royal Dutch Shell.
The group released six of the captives after 12 days. The last three hostages could be seen from a distance as they greeted officials but the freed men did not immediately talk to reporters.
The new militant group has targeted the oil-industry in the world’s eighth-largest producer of crude, blowing up oil installations and cutting production by 20 per cent, sending prices higher on international markets. The militants say their larger goal is a bigger cut of the oil revenues held by the federal government for their southern Niger Delta region, which remains deeply poor despite the oil pumped from beneath them.
The hostage takers had demanded the release of jailed ethnic Ijaw leaders and the payment by Royal Dutch Shell of US $1.5 billion ($1.26 billion) to compensate Ijaw communities for oil pollution, a demand that has also come from Nigerian lawmakers.
Mr Ibori said no ransom was paid, adding: “Now that they have been released, the pertinent issues raised by the youths on the Niger Delta condition will have to be addressed.”
Foreign oil workers are frequently taken hostage in Nigeria, and most are released unharmed. read more

By Christopher Hope (Filed: 27/03/2006)
Shell's future is looking rosy, Jeroen van der Veer tells Christopher Hope, in spite of Gordon Brown's tax bill
Companies the size of Shell have the economic clout of small countries. So it is no surprise to find that Jeroen van der Veer, Shell's chief executive, gets on well with our iron Chancellor.
“I have met Gordon Brown,” he says, “He is fast. You don't need a long time for pleasantries, you can go straight to the heart of the matter, which is excellent.”
Van der Veer insists the world is not about to run out of oil and gas. ‘There are plenty of reserves’ he says, as Shell looks to expand in China, Russia and Iraq
When we meet 24 hours after the Budget in his office in the Hague, Van der Veer is pondering whether Brown is a “fossil-fuel chancellor in a carbon-conscious world” (copyright: D Cameron). “This is not fair criticism,” says the Dutchman whose company produces 3pc of the world's fossil fuel. “If you look at Gordon Brown he has a pretty 'green' mind.”
But Van der Veer has good reason to be less than generous towards Brown after he slapped a windfall tax on North Sea oil companies last November. With BP's Lord Browne of Madingley, Van der Veer is campaigning for the tax to be pegged to the oil price. “It cannot be in the interests of the long-term development of the North Sea because you have lots of mature fields,” he says.
“You have to make sure that you maximise the recovery of the UK's resources. That is why our first priority is that those taxes disappear when the oil price has gone down.”
No Shell projects in the North Sea have been cancelled – yet. “As things stand today we put the taxes into the sum because that it is the best assumption and that will impact project ranking.”
Last week's Budget contained another nasty shock for Shell. Hidden away in the back of last week's Budget is press notice BN13 entitled Controlled Foreign Companies and Residence which, tax experts believe, could land Shell with a tax bill for hundreds of millions of pounds.
Van der Veer says he has no idea about the scale of this latest assault from the Treasury. “Our tax people have studied this. Our tax residency is in the Netherlands, that is where the headquarters is. But I am not a taxation expert.” But he is realistic enough to know that few people will be sympathetic to Shell's plight after it unveiled 2005 profits of $22.9bn (£12.9bn), a record for a British-listed company.
Van der Veer's problem is that while he runs one of the world's largest oil and gas companies, with more than 100,000 employees in 140 countries, most people think of Shell as the company that runs the local petrol station.
Van der Veer admits he needs to explain away the billions more effectively. “We need to do better explanations but I still give myself low marks.
“We have said 'hang on, we don't make the profits at the retail gasoline price' or 'we make most of our profits outside the UK'. Or 'we invest more or less the same amount of profits that we make for future production'. Maybe we find more explanations. But at the end of the day, I try to say this is not profiteering.”
Why not sell the garages, where Shell makes next to nothing? Van der Veer won't have it. “It is part of our legacy. Gasoline pumps were not good business in the recent past but over the long run we like to be in the downstream, and our history is part of this.”
This modest Dutchman was parachuted into the top job in March 2004, in the middle of Shell's reserves crisis – it lost a quarter of its proven oil and gas – after the abrupt departure of his predecessor Sir Phil Watts.
The drama was the making of Van der Veer, who managed to pull of the feat of merging Shell's two operational companies (separate since 1906) into one company in little over a year.
He pulls out a piece of A4 graph paper, with a series of handwritten boxes that show how he mapped out the future of Shell. “This is the same as the handwritten slide I showed to the board,” he says. “The board refused to believe we were attacking the structure. They said 'what do you mean'?”
More graph paper, this time for another presentation to Shell's top brass last December. “I am a strong believer in absolute simplicity, if you can't say it simply then you had better think again.”
Van der Veer believes that some of the problems which engulfed Shell two years ago stemmed from a “me first” culture at Shell, dating from the dot.com days. He says. “It is the classic Kennedy thing, 'what can you do for Shell' not 'what can Shell do for you'. If you like the second, don't join Shell.”
“Something happened around the year 2000 and everyone thought 'I am so brilliant and good things will come to me'. You have to bring people back to reality. These are the rules. This is all about teamwork, and if you think you are too important, then you don't fit in.”
Right now Van der Veer is asking for a bit of patience from investors who are wondering why Shell is not finding more oil and gas than it is producing. The company has ramped up its spending ($19bn this year) to develop fields and replace the “lost” reserves.
Van der Veer hopes that in four years' time, Shell's sluggish production will start to rise. “I feel very good for 2010 and beyond. The problem is that short term you don't see it in our figures.”
Part of the frustration is that under the SEC's booking rules, Shell can only report reserves which it is certain are there. So, at Shell's $19bn Sakhalin programme in eastern Russia, it only books a “very low percentage” of the 4bn-worth of barrels which are probably under the tundra. “You can only book around the hole you drill. You do that as you go along,” he says.
Surprisingly for an oil boss, Van der Veer is not worried about the world running out of the black stuff. “There are plenty of reserves,” he says. “There is a peak of easy oil like in the North Sea, but if you look at oil sands, oil shale, very deep water, we think that the peak is very far out.”
Instead, the Dutchman loses sleep over what to do with the world's hot air. Shell's latest plan is to bury carbon dioxide under the North Sea. But he admits that this may not be the right answer.
“Every CO2 solution has another disadvantage. You can store CO2 very deep in the ocean, but will it stay there? Nobody knows. CO2 is one of the most complex themes that our industry has to face over the coming years.”
One of Van der Veer's plans for the company's future is to use its boffin reputation to beat rival oil companies to new projects. Last week he appointed Shell's first chief technological officer. And he has already removed the “cap” from Shell's research and development budget to find new energies.
“To win work from national oil companies you have to offer something that others cannot,” he says.
Elsewhere Shell will focus on gradual expansion in places like Russia and China, while keeping a watching brief on war-torn Iraq and Iran. On Iraq he says it's too dangerous for now but: “we are ready. We are a spring that is coiled”. Iran, too, has potential. “The Chinese have identified many prospects in Iran. Of course you have a short-term difficult political situation, but Iran has the second largest reserves of oil and gas, and they will last for decades.”
The frustration of Van der Veer is the length of time it takes to develop reserves. This means that his successor will reap the benefits after he retires on July 1, 2008.
“You do a lot for your successors,” he says. “I hope that one day sitting in my chair, old and grey, someone will say thank you very much.” read more

By Christopher Hope, Industry Editor (Filed: 27/03/2006)
Shell could be landed with a tax bill running into hundreds of millions of pounds because of a decision by the Chancellor to change the rules on how some foreign companies are taxed. Tax experts believe the main victim could be Shell, which last year moved its HQ – and so its tax residency – to the Hague as part of its £130bn restructuring. One tax expert said: “It could be worth hundreds of millions.”
Under the changes, contained in the Budget, Gordon Brown is to tax companies that became non-resident for tax before April 2002 under “Controlled Foreign Companies and Residence” rules.
Shell carried out its restructuring in Britain by “reversing” into another UK company which had been registered before 2002. The company has always described the fiscal effect of its merger as “tax neutral”.
Jeroen van der Veer, Shell's chief, said Shell was studying the measure after receiving “an email from my tax people” on Wednesday.
He added: ” Our tax people have studied this and they have realised that our tax residency is in the Netherlands – that is where the headquarters is. But I am not a taxation expert.”
In an interview with The Daily Telegraph, Mr Van der Veer also said that Britain should not worry that more of its gas will come from Russian companies, such as state controlled Gazprom, as North Sea supplies run out.
Politicians had become alarmed after Russia cut off gas supplies to Ukraine this winter over a dispute about prices, he said.
However, he blamed that problem dating from the 1990s about “a lot of friction between Russia and Ukraine about the conditions of the gas delivery and whether they had paid for their gas”.
“It had nothing to do with them not liking to supply western Europe. On the contrary. For the past 30 or 40 years Gazprom has never missed a contractual delivery.
“They are very proud of that, and they will bend over backwards to keep that record.
''There is a high contractual compliance in their thinking. The Russian administration realises that export of oil and gas is one of the key levers for their international prestige as well.
“And like every country they will use that lever. If you talk with the leadership of Gazprom they are reasonable people, they don't necessarily fit our stereotype we have in the West.” read more

Mar 27, 2006
LONDON (AFX) – Royal Dutch Shell PLC is facing a tax bill than could run into hundreds of millions of pounds following a decision by Chancellor Gordon Brown to change the rules on how some foreign companies are taxed, the Daily Telegraph newspaper reported, citing tax experts.
Shell, which last year moved its headquarters to The Hague from the UK, will be among those companies that will be hit hard by the tax reforms, contained in the Budget.
Under the changes, the government is to tax companies that became non-resident for tax before April 2002 under “Controlled Foreign Companies and Residence” rules. Shell carried out its restructuring by “reversing” into another UK company which had been registered before 2002, the newspaper said.
Shell has always described the fiscal effect of its merger as “tax neutral”.
[email protected] read more

By THE ASSOCIATED PRESS
Published: March 27, 2006
Filed at 3:27 a.m. ET
SINGAPORE (AP) — Crude oil prices held steady Monday above $64 a barrel amid lingering concerns about Nigerian and Iranian oil supplies.
Light, sweet crude for May delivery fell 6 cents to $64.20 a barrel in electronic trading on the New York Mercantile Exchange. The contract on Friday rose 35 cents to settle at $64.26 a barrel, 2 percent higher for the week.
April Brent crude futures on London's ICE Futures exchange fell 7 cents to $63.44 a barrel.
Gasoline prices dipped 0.52 cent to $1.8180 a gallon while heating oil futures rose 0.41 cent to $1.7965 a gallon. Natural gas futures fell 13 cents to $7.160 per 1,000 cubic feet.
Prices continued to be supported by concerns about supply disruptions in Nigeria and tension over Iran's nuclear program.
''The Nigerian attacks have really sparked concerns about supply,'' said David Thurtell, commodity strategist at the Commonwealth Bank of Australia in Sydney. ''People are wondering how deep is it going to go and how long will it go on for?''
On Monday, militants in Nigeria's oil-rich southern delta released their last remaining foreign hostages — two Americans and one Briton — more than five weeks after the oil-industry workers were kidnapped, officials said.
The militants took nine foreign oil workers hostage Feb. 18 from a barge owned by Houston-based oil services company Willbros Group Inc., which was laying pipeline in the delta for Royal Dutch Shell. The group released six of the captives after 12 days in captivity.
The militants are behind a spate of attacks that have cut Nigeria's oil exports by more than 20 percent. On Saturday, they said they killed three soldiers in fresh clashes near a key natural gas plant run by Royal Dutch Shell. Shell said there was no impact on the gas plant.
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, but the council has been at loggerheads over U.S.-led efforts to ratchet up the pressure on Iran. Iran insists its nuclear program is for peaceful energy purposes. read more

By REUTERS
Published: March 27, 2006
Filed at 0:49 a.m. ET
WARRI, Nigeria (Reuters) – Three foreign oil workers, two Americans and a Briton, were freed on Monday by Nigerian militants who had held them hostage for five weeks, officials said.
The release of the three, employees of U.S. oil services company Willbros, raised hopes for an end to three months of sabotage and kidnapping in the world's eighth largest oil exporting country that has cut shipments by a quarter.
The three men were handed to the governor of Nigeria's southern Delta state by an ethnic Ijaw leader, who had been negotiating with the militants on behalf of the government. U.S. and British diplomatic staff took the men for medical checks.
“(The three) are in very good health and high spirits,'' said Abel Oshevire, a spokesman for Delta state. “Of course, they are a bit agitated after a month in captivity.''
The rebel Movement for the Emancipation of the Niger Delta (MEND) had demanded a greater share of the region's huge oil wealth, the release of two jailed Ijaw leaders and compensation for oil pollution as conditions for freeing the hostages.
It was not immediately clear what produced the breakthrough, but President Olusegun Obasanjo is due to fly to Washington on Tuesday and pressure had been building up for an end to the standoff over the hostages.
WAVE OF ATTACKS
MEND militants originally captured nine foreign oil workers on February 18 during a wave of attacks on oil facilities, but released six of them earlier this month. It was the second bout of kidnapping by the group since January.
The militant attacks followed a military assault on communities in Delta state that the government accused of involvement in oil theft. The military commander who ordered the assault has since been removed.
Militants had threatened to stage another major attack on oil facilities this month with the aim of cutting another one million barrels a day of exports.
“I hope the federal government will cease all attacks and will not try to arrest anyone,'' said Dimieari Von Kemedi, Ijaw activist and head of the Our Niger Delta non-governmental group.
“I also hope MEND realizes that the issues raised are now being handled as a top priority and there is no need for further attacks as that would be counter-productive to dialogue.''
MEND has yet to comment on the freeing of the hostages.
Militants, often armed and funded with the proceeds of crude oil theft, roam the mangrove-lined waterways of the delta in speedboats.
The majority of people in the delta have seen few benefits from decades of oil extraction that has yielded billions of dollars in profits for foreign oil companies and corrupt politicians. Authorities often dismiss militants as thieves.
Vast areas of the delta are not connected to the national power grid. There is no clean water in many places. There are almost no roads. Teachers and doctors are in short supply.
The environment has been wrecked by oil spills and the 24-hour burning of gas associated with the extraction of oil.
Mnay analysts say Nigerian governments, during almost three decades of military dictatorship as well as during periods of civilian rule, have seen it as being in their interests to control the oil by keeping the delta poor, divided and insecure.
Royal Dutch Shell and other companies on the western side of the delta have shut about 556,000 barrels a day of oil output, most of which is exported through the Forcados tanker terminal, which was damaged in the February attacks.
Officials say they expect to be able to restore most of the oil production within two weeks if peace returns to the delta. read more

By EDMUND L. ANDREWS
March 27, 2006
WASHINGTON, March 26 — It was after midnight and every lawmaker in the committee room wanted to go home, but there was still time to sweeten a deal encouraging oil and gas companies to drill in the Gulf of Mexico.
“There is no cost,” declared Representative Joe L. Barton, a Texas Republican who was presiding over Congressional negotiations on the sprawling energy bill last July. An obscure provision on new drilling incentives was “so noncontroversial,” he added, that senior House and Senate negotiators had not even discussed it.
Mr. Barton's claim had a long history. For more than a decade, lawmakers and administration officials, both Republicans and Democrats, have promised there would be no cost to taxpayers for a program allowing companies to avoid paying the government royalties on oil and gas produced in publicly owned waters in the Gulf.
But last month, the Bush administration confirmed that it expected the government to waive about $7 billion in royalties over the next five years, even though the industry incentive was expressly conceived of for times when energy prices were low. And that number could quadruple to more than $28 billion if a lawsuit filed last week challenging one of the program's remaining restrictions proves successful.
“The big lie about this whole program is that it doesn't cost anything,” said Representative Edward J. Markey, a Massachusetts Democrat who tried to block its expansion last July. “Taxpayers are being asked to provide huge subsidies to oil companies to produce oil — it's like subsidizing a fish to swim.”
How did a supposedly cost-free incentive become a multibillion-dollar break to an industry making record profits?
The answer is a familiar Washington story of special-interest politics at work: the people who pay the closest attention and make the fewest mistakes are those with the most profit at stake.
It is an account of legislators who passed a law riddled with ambiguities; of crucial errors by midlevel bureaucrats under President Bill Clinton; of $2 billion in inducements from the Bush administration, which was intent on promoting energy production; and of Republican lawmakers who wanted to do even more. At each turn, through shrewd lobbying and litigation, oil and gas companies ended up with bigger incentives than before.
Until last month, hardy anyone noticed — or even knew — the real costs. They were obscured in part by the long gap between the time incentives are offered and when new offshore wells start producing. But lawmakers shrouded the costs with rosy projections. And administration officials consistently declined to tally up the money they were forfeiting.
Most industry executives say that the royalty relief spurred drilling and exploration when prices were relatively low. But the industry is divided about whether it is appropriate to continue the incentives with prices at current levels. Michael Coney, a lawyer for Shell Oil, said, “Under the current environment, we don't need royalty relief.”
The program's original architect said he was surprised by what had happened. “The one thing I can tell you is that this is not what we intended,” said J. Bennett Johnston, a former Democratic senator from Louisiana who had pushed for the original incentives that Congress passed in 1995.
Mr. Johnston conceded that he was confused by his own law. “I got out the language a few days ago,” he said in a recent interview. “I had it out just long enough to know that it's got a lot of very obscure language.”
A Subsidy of Disputed Need
Things looked bleak for oil and gas companies in 1995, especially for those along the Gulf Coast.
Energy prices had been so low for so long that investment had dried up. With crude oil selling for about $16 a barrel, scores of wildcatters and small exploration companies had gone out of business. Few companies had any stomach for drilling in water thousands of feet deep, and industry leaders like Exxon and Royal Dutch Shell were increasingly focused on opportunities abroad.
“At the time, the Gulf of Mexico was like the Dead Sea,” recalled John Northington, then an Energy Department policy adviser and now an industry lobbyist.
Senator Johnston, convinced that the Gulf's vast reservoirs and Louisiana's oil-based economy were being neglected, had argued for years that Congress should offer incentives for deep-water drilling and exploration.
“Failure to invest in the Gulf of Mexico is a lost opportunity for the U.S.,” Mr. Johnston pleaded in a letter to other lawmakers. “Those dollars will not move into other domestic development, they will move to Asia, South America, the Middle East or the former Soviet Union.”
Working closely with industry executives, he wrote legislation that would allow a company drilling in deep water to escape the standard 12 percent royalty on up to 87.5 million barrels of oil or its equivalent in natural gas. The coastal waters are mostly owned by the federal government, which leases tens of millions of acres in exchange for upfront fees and a share of sales, or royalties.
Mr. Johnston and other supporters argued that the incentives would actually generate money for the government by increasing production and prompting companies to bid higher prices for new leases.
“The provision will result in a minimum net benefit to the Treasury of $200 million by the year 2000,” Mr. Johnston declared in November 1995, denouncing what he called “outrageous allegations” that the plan was a giveaway.
He won support from oil-state Democrats, Republicans and the Clinton administration. Hazel O'Leary, the energy secretary at the time, said the assistance would reduce American dependence on foreign oil and “enhance national security.”
Representative Robert Livingston of Louisiana, then a rising Republican leader, declared that the inducements would “create thousands of jobs” and “reduce the deficit.”
Many budget experts agree that the rosy estimates were misleading. The reason, they say, is that it often takes seven years before a new offshore field begins producing. As a result, almost all the costs of royalty relief would occur outside of Congress's five-year budget timeframe.
Opponents protested that the cost estimates were wrong, that the incentives amounted to corporate welfare and that companies did not need government incentives to invest.
“They are going to the Gulf of Mexico because that's where the oil is,” said Representative George Miller, Democrat of California, during a House debate. “What we do here is not going to change that. We are just going to decide whether or not we are going to give away the taxpayers' dollars to a lot of oil companies that do not need it.”
Industry executives and lobbyists fanned out across Capitol Hill to shore up support for the program, visiting 150 lawmakers in October 1995. The effort succeeded. A month later, Congress passed Mr. Johnston's bill.
A Missing Escape Clause
To hear lawmakers today, they never intended to waive royalties when energy prices were high.
The 1995 law, according to Republicans and Democrats alike, was supposed to include an escape clause: in any year when average spot prices for oil or gas climbed above certain threshold levels, companies would pay full royalties instead.
“Royalty relief is an effective tool for two things: keeping investment in America during times of super-low prices, and spurring American energy production when massive capital and technological risks would otherwise preclude it,” said Representative Richard W. Pombo, Republican of California and chairman of the House Resources Committee. “Absent those criteria, I do not believe any relief should be granted.”
But in what administration officials said appeared to have been a mistake, Clinton administration managers omitted the crucial escape clause in all offshore leases signed in 1998 and 1999.
At the time, with oil prices still below $20 a barrel, the mistake seemed harmless. But energy prices have been above the cutoff points since 2002, and Interior Department officials estimate that about one-sixth of production in the Gulf of Mexico is still exempt from royalties.
Walter Cruickshank, a senior official in both the Clinton and Bush administrations, told lawmakers last month that officials writing the lease contracts thought the price thresholds were spelled out in the new regulations, which were completed in 1998. But officials writing the regulations left those details out, preferring to set the precise rules at each new lease sale.
“It seems to have been a massive screw-up,” said Mr. Northington, who was then in the Energy Department. No one noticed the error for two years, and no one informed Congress about it until last month.
Five years later, the costs of that lapse were compounded. A group of oil companies, led by Shell, defeated the Bush administration in court. The decision more than doubled the amount of oil and gas that companies could produce without paying royalties.
The case began as a relatively obscure dispute. Shell paid $3.8 million in 1997 for a Gulf lease and soon drilled a successful well. But the Interior Department denied the company royalty relief, saying that Shell had drilled into an older field already producing oil and gas. The decision hinged on undersea geography and the court's interpretation of language in the 1995 law.
A typical field, or geological reservoir, often encompasses two or three separately leased tracts of ocean floor. Interior Department officials insisted that the maximum amount of royalty-free oil and gas was based on each field. Shell and its partners argued that limit applied only to each lease.
Perhaps shrewdly, the oil companies sued the Bush administration in Louisiana, where federal courts previously had sided with the industry in spats with the government.
The fight was not even close. In January 2003, a federal district judge declared that the Interior Department's rules violated the 1995 law. If the department “disagrees with Congress's policy choices,” Judge James T. Trimble Jr. wrote, “then such arguments are best addressed to Congress.”
What might have been a $2 billion mistake in the Clinton administration suddenly ballooned into a $5 billion headache under Mr. Bush.
But even as the Bush administration was losing in court, it was offering new incentives for the energy industry.
Mr. Bush placed a top priority on expanding oil and gas production as soon as he took office in 2001. Vice President Dick Cheney's task force on energy, warning of a deepening shortfall in domestic energy production, urged the government to “explore opportunities for royalty reduction” and to open areas like the Arctic National Wildlife Refuge to drilling.
Gale A. Norton, who stepped down this month as interior secretary, moved quickly to speed up approvals of new drilling permits. Starting in 2001, she offered royalty incentives to shallow-water producers who drilled more than 15,000 feet below the sea bottom.
In January 2004, Ms. Norton made the incentives far more generous by raising the threshold prices. Her decision meant that deep-gas drillers were able to escape royalties in 2005, when prices spiked to record levels, and would probably escape them this year as well.
She also offered to sweeten less-generous contracts the drillers had signed before the regulation was approved.
“These incentives will help ensure we have a reliable supply of natural gas in the future,” Ms. Norton proclaimed, predicting that American consumers would save “an estimated $570 million a year” in lower fuel prices.
Ms. Norton's decision was influenced by the industry. The Interior Department had originally proposed a cut-off price for royalty exemptions of $5 per million British thermal units, or B.T.U.'s, of gas. But the Independent Petroleum Association of America, which represents smaller producers, argued that the new incentive would have little value because natural gas prices were already above $5. Ms. Norton set the threshold at $9.34.
Based on administration assumptions about future production and prices, that change could cost the government about $1.9 billion in lost royalties.
“There is no cost rationale,” said Shirley J. Neff, an economist at Columbia University and Senator Johnston's top legislative aide in drafting the 1995 royalty law. “It is astounding to me that the administration would so blatantly cave in to the industry's demands.”
Incentives Keep Growing
Last April, President Bush himself expressed skepticism about giving new incentives to oil and gas drillers. “With oil at $50 a barrel,” Mr. Bush remarked, “I don't think energy companies need taxpayer-funded incentives to explore.”
But on Aug. 8, Mr. Bush signed a sweeping energy bill that contained $2.6 billion in new tax breaks for oil and gas drillers and a modest expansion of the 10-year-old “royalty relief” program. For the most part, the law locked in incentives that the Interior Department was already offering for another five years. But it included some embellishments, like an extra break on royalties for companies drilling in the deepest waters.
Lee Fuller, vice president of the Independent Petroleum Association of America, said smaller companies wanted to prevent future administrations from cutting back on incentives. “Having a clear, stable royalty policy was of value to independent producers,” he said.
And energy companies, whose executives had long contributed campaign funds to Republican candidates, pushed to block any amendments aimed at diluting the benefits.
The push to lock in the royalty inducements came primarily from House Republicans. The only real opposition came from a handful of House Democrats, in a showdown about 1 a.m. on July 25, according to a transcript of the session.
“It is indefensible to be keeping these companies on the government dole when oil and gas prices are so high,” charged Representative Markey of Massachusetts, who proposed to strip the royalty provisions. “We might as well be giving tax breaks to Donald Trump and Warren Buffett.”
Mr. Barton, the Texas Republican, brushed aside the objections. He reassured lawmakers that the new provisions would not cost taxpayers anything.
When Mr. Markey proposed a more modest change — having Congress prohibit incentives if crude oil prices rose above $40 a barrel — Republicans quickly voted him down again.
“The only reason they waited until after midnight to bring up these issues is that they couldn't stand up in the light of day,” Mr. Markey said in a recent interview. “They all expected me to give up because it was so late and I didn't have the votes. But if nothing else, I wanted to get these things on the record.”
A Royalty-Free Future?
It is still not clear how much impact the reduced royalties had in encouraging deep-water drilling. While activity in the Gulf has increased since 1995, prices for oil and gas have more than quadrupled over the same period, providing a powerful motivation, experts say.
“It's hard to make a case for royalty relief, especially at these high prices,” said Jack Overstreet, owner of an independent oil exploration company in Texas. “But the oil industry is like the farm lobby and will have its hand out at every opportunity.”
The size of the subsidies will soar far higher if oil companies win their newest court battle.
In a lawsuit filed March 17, Kerr-McGee Exploration and Production argued that Congress never authorized the government to set price cut-offs for incentives on leases awarded from 1996 through 2000. If the company wins, the Interior Department recently estimated, about three-quarters of oil and gas produced in the Gulf of Mexico will be royalty-free for the next five years.
Mr. Markey and other Democrats recently introduced legislation that would pressure companies to pay full royalties when energy prices are high, regardless of what their leases allow.
But Republican lawmakers and the Bush administration have signaled their opposition.
“These are binding contracts that the government signed with companies,” Ms. Norton recently remarked. “I don't think we can change them just because we don't like them.” read more

Mar 27, 2006
BOMBAY (AFX) – Shell India has drawn up plans to expand the Hazira terminal and port with an investment of over 250 mln usd, Business Standard reported.
Ahead of the proposed expansion, the company is likely to sell part of its stake to some of the majors in the sector, the newspaper said.
The Royal Dutch/Shell Group holds 74 pct stake in the terminal while French oil major Total SA holds the remaining 26 pct.
Marc den Hartog, director, Shell India, confirmed that talks were on with both Indian and foreign companies for the expansion project but he declined to divulge the details of the stake sale plan, the report said.
“We are planning to expand it to a container cargo handling terminal of world scale with an investment of 250 million dollars… The entire expansion is likely to be over in three years,” he was quoted as saying.
The Shell-Total consortium is also doubling the capacity of the LNG terminal to 5 mln tonnes, the report said.
Marc told the paper that Shell did not have any plans to go for a public float. “Major companies in the sector are ready to collaborate with us and there is no need to go to the public,” he said.
rc/
null read more

By Khozem Merchant in Mumbai
Published: March 27 2006 03:00 | Last updated: March 27 2006 03:00
As he begins his first overseas trip as India's energy minister, Murli Deora has a message for foreign investors.
“Those who had abandoned India must now be disappointed,” he says, mischievously declining to identify directly Royal Dutch/Shell, which in 2002 sold what turned out to be one of the country's richest oil-bearing blocks, in the princely state of Rajasthan.
For Mr Deora, a friend of big business in India's communist-supported government, the benefit of wooing foreign investment is a given. His first set-piece opportunity is today, when he launches India's largest sale of exploration blocks to the world's big energy companies.
“We want them [global exploration and production companies] to bring their technology for deep-water exploration, something not available [in India],” he told the FT in his first interview with international media.
Mr Deora's task will be to overcome global scepticism about India's oil sector. He was reminded of this last week when BP dumped plans to develop with state-run Hindustan Petroleum a $3bn refinery and a network of petrol stations.
The move illustrated how price controls on kerosene were not only shrinking commercial margins, but scaring away capital.
According to petroleum ministry advisers in New Delhi and people in the industry, Mr Deora has a good chance of at least arresting this trend, and one reason for this is the country's new regulatory regime for downstream activities.
To the surprise of analysts, India's parliament last week passed critical energy legislation that has been stuck in the legislature for nearly six years. The new law sets up a gas regulator with a mandate to police pricing and develop a national gas grid. It would also set up a “common carrier” regime, which would give gas suppliers access to all pipeline capacity and prevent duplication.
The law is the minister's ace card as he presents India's sixth “new exploration licensing policy”. This comprises the sale of 55 on-land and offshore blocks spread across 352,000 sq km. India's five previous rounds have conspicuously failed to yield major discoveries.
“There can be no gas market without pricing and no market without [pipeline] transportation, so the passage of this law effectively creates a market. This is the regulatory environment that foreign investors had sought in previous rounds, now they have it,” says an adviser to the minister.
Mr Deora identifies three challenges for India's oil industry: encouraging domestic exploration; securing overseas energy assets; and exploiting resources such as coal, of which Indian has an abundance, and nuclear energy.
He wants to persist with his predecessor's “positive” work on building “partnerships” with China. “We are two energy-starved countries, I want more joint bids and joint development with China,” he says, adding that collaboration could ease the competition bidding that has cost India, for example, dear. India lost out to China in recent bids for energy assets in Kazakhstan
Although he says he is “continuing [with my predecessor's] work” on a pipeline that links Iran, Pakistan and India and which is strongly opposed by the US state department, those familiar with Mr Deora detect a hint of ambivalence. Critics argue his deep ties with US policy-makers were one reason for his landing the energy portfolio.
Mr Deora also identifies himself as a “firm” supporter of Prime Minister Manmohan Singh's nuclear energy pact with the US. He sees the contribution of nuclear sources to India's energy mix tripling to about 6 per cent by 2022. On the US leg of his current trip, Mr Deora will address US congressmen to try to win support for the nuclear pact.
Mr Deora admits he has had to “adjust” to the realities of office. This has meant adopting the party position on subsidies “so fuel is within reach of the poor”.
One effect, at a time of rising crude prices, has been to damage the profitability of India's four main public-sector refining and exploration companies. Together, between April and December 2005, they lost Rs282.83bn ($6.5bn) because of retail fuel price controls. “I'd like to ease their pain, too, somehow,” he says. read more

WARRI, Nigeria (AP) — Militants in Nigeria's oil-rich southern delta on Monday released their last remaining foreign hostages — two Americans and one Briton — more than five weeks after the oil-industry workers were kidnapped, officials said.
Abel Oshevire, spokesman for the Delta state government, said Americans Cody Oswalt and Russell Spell and Briton John Hudspith were released just before dawn and were now with the local governor, James Ibori.
“They are here with us now and are all in good health,” Oshevire told reporters.
Militants of the Movement for the Emancipation of Niger Delta took nine foreign oil workers hostage Feb. 18 from a barge owned by Houston-based oil services company Willbros Group Inc., which was laying pipeline in the delta for Royal Dutch Shell. The group released six of the captives after 12 days in captivity.
Militants have launched attacks against the oil industry in the world's eighth-largest pumper of crude in an effort to get a bigger cut of the oil revenues held by the federal government. The southern Niger Delta region remains deeply poor despite the oil pumped from beneath them.
Attacks on installations in the region have cut oil production by 20%, sending prices higher on international markets.
In exchange for the release of the hostages, the militants had demanded the government free jailed ethnic Ijaw leaders and Royal Dutch Shell pay $1.5 billion in compensation to Ijaw communities for oil pollution.
Ibori said no ransom was paid, but added now that the hostages had been released, “the pertinent issues raised by the youths on the Niger Delta condition will have to be addressed.”
Foreign oil workers are frequently taken hostage in Nigeria, and most are released unharmed. read more

By Thomas Catan
On the face of it, oil companies have never had it so good.
Last month, ExxonMobil posted the largest annual profit in US corporate history. BP, Shell, Total and others also smashed their own earnings records. Industry bosses are having a hard time figuring out what to do with their unprecedented cash gushers.
An enviable problem, perhaps. But those staggering profits mask a deeper sense of malaise in the oil and gas industry.
Not long ago, the so-called “Seven Sisters” dominated the production, refining and distribution of oil and divided the world among them. Today, their descendants are masters of an ever-shrinking universe, excluded from the best energy prospects in the world.
Oil companies now offer few services that host governments cannot buy elsewhere and, as a result, are struggling to replace their reserves – a key indicator of future growth. “Almost 75 per cent of the world’s reserves are closed off to them now,” says Philip Verleger, an energy economist. “It’s staggering how little access they have.”
Under such circumstances, the best thing oil companies have found to do with their cash is hand it back to investors. In the past two years, they have returned an estimated $120bn (£69bn) through dividends and share buybacks, prompting accusations that they are failing to invest in new production.
But arguably, the real problem with oil companies is the opposite: they have been throwing cash at projects that until recently many would have regarded as wholly impractical.
Without access to Middle East oil, companies are being forced to extract from ever more forbidding environments, in the deepest waters and the coldest climates. They are committing tens of billions of dollars to develop “unconventional” sources such as oil sands in Canada, a process that is logistically difficult, expensive and immensely wasteful.
This frenzy of activity has spurred rampant cost inflation. The price of everything from labour to drilling rigs has soared. The result is that capital spending by the big oil companies has virtually doubled since 1999, according to a recent report by McKinsey, the consultancy, to reach nearly $200bn a year.
Some companies are also buying reserves through expensive corporate acquisitions that amount to giant bets that energy prices will stay high.
While the oil price remains at between $60 and $70 a barrel, none of this should matter. But if history is a guide, it will not.
Analysts at Foresight Research in New York recently read the annual reports of 16 of the largest oil companies from 1979 and 1980, the last time experts declared that prices had moved permanently higher. They made for sobering reading.
“The oil companies were horrible in their forecasts,” says Bernard Picchi, head of Foresight’s energy team. “In the early 1980s, everyone was predicting that oil and gas prices would remain high and of course they didn’t.”
Ah, say optimists: this time things are different. The oil price may have gone through boom and bust many times but the rise of China and India means that demand will not fall again. Add to that the fact that many of the easily accessible oilfields have been exhausted and suddenly today’s price begins to look like a floor, not a ceiling.
Many who lived through the 1979–81 boom and the subsequent bust have different ideas. Prices may not hit $10 again any time soon, they say, but there is no structural reason why they should be as high as they are. And they would not have to fall very far for many oil companies to find themselves in serious trouble.
At least one of the largest international oil companies routinely runs financial health checks on smaller competitors to determine how vulnerable they are to a fall in the oil price. When oil hits $45 a barrel (recently seen as a high price) they are planning to sweep up overstretched oil companies with assets all over the globe.
To be in that position, however, oil companies will have to remain disciplined with their own spending. The so-called “supermajors” are just about holding the line but, as the longest oil boom in 40 years continues, capital discipline is becoming harder to sustain.
Increased investment, moreover, will eventually undercut the oil price that gave rise to it. Much of the new capacity may come on-stream when high prices have already affected oil use. A slowdown in the US, China or India would further depress demand.
“It may take time but the iron law of supply and demand never fails,” says Mr Picchi.
But if prices are set to fall, then when? Samuel Bodman, US energy secretary, last year declared the era of cheap energy to be over, echoing a pronouncement by his predecessor during the 1979–81 boom. If such statements are anything to go by, the cycle may already be getting ready for another turn.
“During all oil price booms, it becomes possible to imagine that the industry’s economics have changed forever,” McKinsey notes. “But history shows that the point when industry observers start to say that things are really different this time around usually marks the top of the cycle. By then, the seeds of the crash to come have germinated.” read more

PART 5: : MONDAY 27 MARCH 2006
By Alfred Donovan
This is the final part in a series of five articles relating to the defamation action which EIGHT Royal Dutch Shell companies have collectively brought against Shell whistleblower Dr Huong in respect of postings on this website under his name.
In parts 1 to 4, we published the letter from TH Liew (the lawyers acting for Shell) and the accompanying “NOTICE TO SHOW CAUSE” which they served on Dr Huong on Wednesday, 15 Match 2006 notifying of Shell's intention to issue contempt of court proceedings punishable by imprisonment or fine.
Since I am named in the proceedings and have played the key role in the various internet publications at the heart of the case, I was asked by Dr Huong and his lawyers to supply an Affidavit testifying to the facts. Extracts from my draft Affidavit were inserted into the first four articles.
I will now publish my comments on some primary issues covered by the Plaintiff group of EIGHT Royal Dutch Shell companies in their recent REPLY to the DEFENCE filed by Dr Huong. We have already published both documents. However, for ease of reference, I have republished Shell's entire REPLY again and have inserted my comments printed in red. All yellow highlighting is mine. All underlining is by Shell lawyers, TH Liew.
An extract:
What it all seems to boil down to is that the plaintiff Royal Dutch Shell companies were initially keen to associate themselves with the Shell brand generally when complaining about alleged damage to Shell's reputation. However they are now attempting to divorce themselves from the association because of well placed fears about Shell having to supply discovery documents which will blow the lid off Shell management misdeeds generally.
PARTS 1, 2, 3 & 4 ARE ALSO ACCESSIBLE VIA THIS ARTICLE
For the complete article click on the link below: –
http://shellnews.net/2006 docs/DR HUONG 2006/royal_dutch_shell_group-part-five-dr-huong-march-2006.htm read more

Even as efforts are still being made to effect the return of the major oil giant, Shell Petroleum Development Company (SPDC), to Ogoniland in Rivers state, to resume oil exploitation activities, an oil spill from one of the company’s oil wellheads has devastated another Ogoni community.
Sunday Tribune gathered that K-Dere community in Gokana local government area of Rivers state went to sleep Friday evening with all its vicinity filled with crude oil spill from SPDC’s Bomu Well-2. It was further gathered that the spill was still on around 2:50pm, Saturday afternoon, when this report was being compiled.
According to reports, the spill occurred a year after a previous one, which SPDC came to stop and promised to come back later to do a more thorough work to prevent a reoccurrence, which never happened. Describing the level of damage to the Nigerian Tribune in a telephone conversation in Port Harcourt on Saturday, the President of the Movement for the Survival of Ogoni People (MOSOP), Ledum Mittee, said the spill would definitely have far reaching effect on the people.
According to him, “where this spill is happening is just like 100 meter from a church, attended by people, a school is just about 300 meters away and all round the wellhead are farms, on which active farming is gong on”.
He pointed out further that the area where the accident had occurred is well habited and as a result, “the spill will affect their food, water and livelihood sources”.
However, in a press statement sent online by Don Boham, the Corporate External Affairs Manager of SPDC, on the company’s behalf, the incidence was confirmed, adding that the company had mobilised its men to site to curtail the spill.
According to the statement, “a leak has occurred at Bomu Well-2, a dormant well in Ogoni land belonging to Shell Petroleum Development Company of Nigeria limited. Crude oil was seen spewing out of the well-head late Friday, 24 March 2006. The vicinity of the spill is uninhabited.
“We have mobilised our oil spill response and fire service teams to the site, and also taking steps to secure the well and contain the spill. The cause of the spill and quantity of crude involved are yet to be determined.
“The relevant government agencies and community leaders have been informed of the situation and a Joint Investigation Team is due to visit the area”, it said. The company added further that it had stopped producing oil from Ogoni land in 1993. read more

Panic follows Shell oil leak
Conal Walsh
Sunday March 26, 2006
Shell faces sharp criticism in the Philippines this weekend after a large oil spill at its controversial depot in Manila, the country's capital, writes Conal Walsh.
An estimated 25,000 litres of oil leaked from a storage drum at the giant Pandacan plant on Friday, reportedly emitting a pungent odour that caused panic among some of the shanty-town dwellers who live on the outskirts of the plant.
Although the leak was quickly brought under control, the incident will heighten calls among local politicians and international activists for Pandacan to be closed. They have long warned that the depot's location in the densely populated heart of Manila makes it a prime target for Islamic terrorists.
'A major incident at Pandacan, even an accident such as the one we saw at the Buncefield depot in England, would almost certainly lead to catastrophic loss of life,' said Craig Bennett of Friends of the Earth.
In response to fears of terrorism, Shell has increased security at Pandacan and scaled back its operations there, decommissioning the oil tanks that most closely border residential areas. read more

DULUE MBACHU
Mar 25, 2006
Militants behind a spate of attacks in Nigeria's southern oil-rich delta said Saturday they killed three soldiers in fresh clashes near a key natural gas plant run by Royal Dutch Shell.
The Movement for the Emancipation of the Niger Delta, responsible for several bombings and hostage-takings this year that have cut Nigeria's oil exports by more than 20 percent, said its fighters crossed a military patrol boat on Thursday.
“We confirm that three soldiers were killed in this encounter,” the group said in an e-mail statement that gave no details of the clash. The group said it captured the boat and some quantities of arms and ammunition.
Army spokesman Col. Mohammed Yusuf said three soldiers went missing around Soku on Thursday but could not give any further details. Shell said there was no impact on the gas plant.
The movement claims to be fighting for the interests of the impoverished Niger Delta region that accounts for most of Nigeria's oil.
The militants have held two Americans and one Briton since Feb. 18, when the militants raided a barge owned by Houston-based oil services company Willbros Group Inc. and seized nine hostages. They released six of them after 12 days. Hostage-takings occur frequently in the volatile delta region. Most are released unharmed.
Nigeria normally exports about 2.5 million barrels of oil daily.
Copyright 2006 Associated Press read more

26 MARCH 2006
By Alfred Donovan
This is part four of the publication of extracts from a letter and “NOTICE TO SHOW CAUSE” issued by TH Liew, the solicitors acting for the EIGHT Royal Dutch Shell companies collectively suing Dr Huong for alleged defamation in respect of postings on this website.
The letter and accompanying “NOTICE TO SHOW CAUSE” were served on Dr Huong on Wednesday, 15 Match 2006 notifying of Shell's intention to issue contempt of court proceedings against him punishable by imprisonment or fine.
Since I am named in the proceedings and have played the key role in the various internet publications at the heart of the case, I have been asked by Dr Huong and his lawyers to supply an Affidavit testifying to the facts as Dr Huong has to respond to the charges made in the NOTICE TO SHOW CAUSE. My draft response in printed in red. All yellow highlighting is mine. All underlining is by Shell lawyers, TH Liew.
Part four extracts deal with sections 8 to 19 of the NOTICE TO SHOW CAUSE relating Dr Huong's draft Affidavit and my letter to Human Rights Watch: –
The 7.2.06 publication on the Shellnews.net website
8. You sent a detailed write-up of scandalous allegations of misconduct and wrongdoing by the Plaintiffs and Shell, which you called an 'affidavit*, to Alfred Donovan.
9. Donovan included this 'affidavit' in a comprehensive letter from him to Human Rights Watch and copied to his Shellnews.net website. The title of the piece is “The Persecution of Dr John Huong by a Multinational Giant' It makes numerous scandalous allegations against the Plaintiffs and Shell. This article states inter alia thus:
THE ARTICLE IS ACCESSIBLE VIA THE FOLLOWING LINK
http://shellnews.net/2006 docs/DR HUONG 2006/royal-dutch-shell-group-dr-huong-part-four-march-2006.htm read more

By Alfred Donovan
Posted on: March 25, 2006, 3:28 PM PST
Story: Net defamation suit leads to libel award (see below)
One expert has predicted that as a result of the decision in the Keith-Smith libel case companies will now try to shut down “suck sites” also known as “gripe sites”.
This would be a huge backward step because in my humble opinion the internet is the most important development in freedom of expression in my lifetime. It provides a low cost platform for anyone, even of modest means, to reach a global audience. It is the high-tech equivalent of having a soap box at “Speakers Corner” in London’s Hyde Park – that long-established bastion of free speech. The net gives ordinary mortals lucky enough to live in open societies the opportunity to publicly criticise the rich and powerful of this world.
I speak with some authority as I own and operate the world’s ultimate “gripe” website – (Royal Dutch Shell Plc .com). Shell International Petroleum Company issued proceedings via the World Intellectual Property Organisation in 2005 in an unsuccessful attempt to seize my Shell related domain names. The domain names included the top level domain names for their new $223 billion USD parent company, Royal Dutch Shell Plc and for the entire Group: Royal Dutch Shell Group. Shell came unstuck in those proceedings and I retain and use all three Shell domains in question. I won the case on a unanimous verdict by a three person panel.
Basically the WIPO panel decided that it is legally permissible to use a domain name even if it is identical to the name of a targeted company, provided the gripe site is operated on a non commercial basis. Of course this is subject to the domain registrations being available. By a fluke my Shell domain names were available. Out of the three best top level domain names relating to Shell – Shell.com, RoyalDutchShellPlc.com and RoyalDutchShellGroup.com – I own two and Shell owns one. This puts me in a wonderful position to embarrass Shell management.
The power of the internet has put me, a veteran of the second world war (89 next month), in a position to take on in a global arena one of the world’s largest multinational goliaths, the Royal Dutch Shell Group which operates in more than 140 countries and territories and employs more than 112,000 people.
I operate two sites each utilising one of the above domain names. They now contain over 9,000 pages of information about Shell, including leaked Shell internal documents and communications plus Shell insider revelations and thousands of news articles.
My son and I have assisted a number of parties who contacted us, including the WWF (the World Wildlife Fund), The Ecumenical Council for Corporate Responsibility, the U.S. Public Interest Research Group, and the New York lawyers Bernstein Liebhard & Lifshitz, LLP acting for the lead Plaintiffs in a U.S. class action lawsuit against Royal Dutch Shell plc (and others) in respect of the Shell reserves scandal.
The World Wild Life Fund, U.S. PIRG and the ECCR all appealed through the medium of my websites for Shell shareholders to support resolutions to be put to Shell shareholders at the inaugural Royal Dutch Shell Plc AGM in May 2006. The ECCR was successful in recruiting more than the required 100 shareholders as a result of its various appeals for support and the relevant resolution has been accepted by Royal Dutch Shell Plc.
With regard to the class action, Bernstein Liebhard & Lifshitz has confirmed that my website successfully generated a shareholder, Mr Peter M Wood, to act as a representative of all non-U.S. Shell shareholders in the class action. As a result, a motion has been filed with the appropriate U.S. District Court.
Do I have the attention of Shell senior management? Absolutely!
A Shell whistleblower, Dr John Huong, a former Shell geologist of 29 years standing is currently the subject of a High Court Injunction and Restraining Order collectively obtained by EIGHT Royal Dutch Shell companies in respect of articles posted under his name on my website. Shell served “NOTICE TO SHOW CAUSE” proceedings against him on 15 March 2006 for alleged contempt of court in respect of alleged “persistent internet postings” on my site, with a potential penalty of imprisonment or fine.
A further indicator that I have Shell management well and truly rattled is that I am in possession of an internal email between three top people at Royal Dutch Shell, including its Chief Executive Officer, Mr Jeroen van der Veer, which fell into my hands. It contains a discussion concerning my activities and mentions a plan which is activated whenever I contact anyone, so your Editor can expect to hear from Shell if you post my comments!
For anyone interested in why I have a gripe against Shell, or to learn more about the WIPO decision, or Shell’s case against Dr Huong, you are cordially invited to visit www.royaldutchshellplc.com
http://news.com.com/5208-1030-0.html?forumID=1&threadID=15271&messageID=129405&start=-1
RELATED ARTICLE
Net defamation suit leads to libel award
By Graeme Wearden
Special to CNET News.com
Published: March 23, 2006, 7:41 AM PST
Michael Keith Smith of the U.K. Independence Party has become the latest person to win substantial damages after being defamed on the Internet.
Smith brought the case against Tracy Williams after she posted a series of derogatory remarks about him on an online discussion board run by Yahoo. Williams has been ordered to pay more than $29,500 (17,000 pounds) after being found guilty of libel.
The accusations, which included claims that Smith was a racist and guilty of sexual offenses, were made as part of an online discussion about the Iraq war in 2003.
Smith had argued in favor of the conflict, which prompted Williams to label him a “lard brain” and later to falsely claim that he had sexually harassed a colleague.
Williams' remarks were made under a pseudonym, and in 2004, Smith obtained a court order forcing Yahoo to reveal the identity of the poster. He then brought his case to the High Court, claiming that Williams had continued to abuse him online.
Judge Alistair MacDuff, who heard the case, ordered Williams to pay Smith $17,365 (10,000 pounds) in damages and never again to repeat the remarks, which he described as “seriously defamatory.” Williams, who did not file a defense, must also pay 7,200 pounds in court costs.
Legal experts have suggested that Smith's victory could encourage other people to file libel lawsuits.
A landmark case in 2000, Godfrey v. Demon, established that statements posted online were not beyond the reach of the law, and this case looks to have set a similarly important precedent.
Graeme Wearden of ZDNet UK reported from London. read more

25 Mar 2006 18:13:44 GMT
Source: Reuters
YUZHNO-SAKHALINSK, Russia, March 25 (Reuters) – The European Bank for Reconstruction and Development (EBRD) is likely to approve a key loan to the Royal Dutch Shell Plc-led Sakhalin-2 oil and gas project in East Russia, despite strong opposition from green groups, senior EBRD sources said.
After much scepticism, the bank's management has become much more supportive of the $20 billion project in recent months, partly due to the desire of key bank shareholders, including the United States and Japan, to secure new energy sources, and other strategic goals, the sources said.
“There has been a change of mood (in favour of the project),” one senior source told Reuters.
Sakhalin-2 will proceed even without the loan but it would be a big win for Shell's reputation. The bank's strict environmental rules mean the loan effectively endorses the project's ecological record.
The world's third largest publicly traded oil firm has taken a battering from green groups because of the risks the project poses to endangered whales, salmon spawning grounds, indigenous peoples' lifestyles and other aspects of the largely empty and undeveloped island's delicate ecology.
The bank insists it remains neutral on whether to approve the loan and environmental officials at the bank deny any pressure is being exerted on them to take a less critical view of the development.
Environmental officials said any warming toward Sakhalin-2 on their part reflected the fact they have forced Shell and its partners to make a number of key improvements to reduce the ecological impact.
“The gap between our expectations and reality on the ground have narrowed considerably,” Mark King, group head of the bank's environmental department, told Reuters at the sidelines of a public meeting in Yuzhno-Sakhalinsk this week.
However, the sources said this was not the only reason the bank's management had become less sceptical about Sakhalin-2.
“There was political pressure from different sources, and undoubtedly some of that came from the U.S.,” a second senior bank insider said.
CONTROVERSIAL LOAN
Sakhalin-2, off the north coast of Sakhalin Island in Russia is one of the largest hydrocarbon developments in the world, with recoverable reserves of 4.5 billion barrels equivalent of oil and gas.
Shell and its partners, the Japanese firms Mitsui and Mitsubishi , have asked the EBRD for around $300 million to develop the fields and a $6-7 billion financing package including other government-backed lenders hinges on the bank's decision.
EBRD officials say it is the most controversial application they have ever had to consider.
The oil and gas fields off the north coast of the island are located near the feeding grounds of the critically endangered Western Grey whale.
A pipeline must be run across around 1,100 rivers and water courses to connect the fields to an export terminal in the south of the island. The island's economy is heavily reliant on fish which spawn in the rivers.
At a public meeting in Korsakov on Friday, locals expressed worries about the impact of the dumping of dredged material in their bay, the loss of a public beach to the gas export terminal and other concerns.
Shell, which has spent tens of millions of dollars to improve the project environmentally, had hoped to secure the EBRD loan last year but the bank delayed approval because it was unhappy with the way the rivers were being crossed.
Green groups accused the EBRD of giving into Shell by putting the project forward for public consultation — the final stage before approval — in December.
The senior bank sources said the EBRD did face heavy lobbying from Shell but was also being steered by the interests of its shareholders.
The United States and Japan, two of the largest customers for Sakhalin-2's production, are also two of the largest shareholders in the EBRD.
“Pressure is coming on . . . (from) governments who feel that anything away from the Persian Gulf is advisable,” the second senior bank source said.
Other shareholders — who have to vote on approval — will also be reluctant to antagonise Russia by refusing the loan, especially those like the UK and France, who have large oil firms who seek to do business in Russia.
Ian Craig, chief executive of the consortium running Sakhalin-2, agreed the project enjoyed wide support.
“It's a very strategic development and for that reason, it's broadly supported by the (United) States, by Europe and by the Far East countries,” he told Reuters this week. read more

By Alfean Hardy
Shell Refining Company (Federation of Malaya) Bhd (Shell Refining) is expected to name its new chairman on May 17, its outgoing chairman Datuk Jon Chadwick said.
Speaking to reporters on the sidelines of Invest Malaysia 2006 conference in Kuala Lumpur on March 24, Chadwick said: “May 18 is my last day as chairman of Shell Refining.”
Chadwick has taken on the role of executive vice president Asia for the Shell Group.
“The board will be deliberating on who my replacement is at a board meeting on the day before and we’ll be making an announcement, hopefully, to our shareholders on May 17,” he added.
Chadwick declined to say whether his replacement would come from within Shell Refining.
On the company’s record dividend payout of RM1 per share for FY05, Chadwick said: “We’ve made clear what our dividend policy is. Interim plus a final 50 sen. In addition, we will be paying 20 sen every quarter until we’ve used up our cash.”
“We predict that it will be any where from four to eight quarters. We’ve already paid two, so there’s two to six (quarters) to go. This means that we’ll be paying anywhere from 90 sen to 130 sen per share,” he added.
“Last year we paid a ringgit and, for a stock that’s trading at about RM10 today, that’s a 10% yield. We are predicting we’d be paying between 90 sen and 130 sen this year. It’s better than putting it in a bank,” said Chadwick. read more

By Hillary Bain Lindsay
“Nothing has changed,” says Patterson Ogon, founding director of the Ijaw Council for Human Rights in the Niger Delta. “Since 1995 when Ken Saro-Wiwa was hung, [Shell's] public relations and glossy reports seem to indicate that they're doing so much in the Niger Delta. But we are still waiting to see any practical change.”
Over a decade has passed since the Nigerian government killed Ken Saro-Wiwa and eight other Ogoni activists. Saro-Wiwa led a non-violent struggle against Royal Dutch Shell and other oil multinationals whose operations in the region were devastating the environment and livelihoods of local people. In a statement made to the court before his verdict, Saro-Wiwa predicted that the end of the struggle was near, but warned, “Whether the peaceful ways I have favoured will prevail depends on what the oppressor decides, what signals it sends out to the waiting public.”
Ten years later, the Niger Delta is once again making international headlines. The struggle remains the same but the tactics have changed. The Movement for the Emancipation of the Niger Delta (MEND) is a well-armed, well-organized group of youth who aim to localize control of the Niger Delta's oil wealth and are demanding compensation for communities environmentally devastated by oil operations.
MEND is targeting the oil multinationals that export 2.5 million barrels of oil from the region each day, specifically Shell, which is responsible for nearly half of those exports. The group kidnapped four foreign oil workers on January 11th and nine more on February 18th. MEND is threatening to bring oil exports from Nigeria to a halt.
The group has already shut down nearly one fifth of the country's oil production; a significant feat considering Nigeria is the eighth largest oil exporter in the world. “Violent attacks by militants in the Niger Delta” are having an effect on oil prices, the New York Times noted on February 20th.
The “violent attacks” referred to in the article are the blowing up of oil infrastructure in the region, including pipelines and loading platforms. Not mentioned in the article are the Nigerian soldiers which have been killed during skirmishes between the military and MEND. According to MEND, they “deeply regret” the deaths. In an email sent on January 17th MEND states, “We understand and sympathize with soldiers being sent into this conflict, that they are there without choice. We do not wish to kill them unless absolutely necessary and urge them to be passive observers so they do not share the fate of their colleagues in Benisede [an attack which destroyed one oil flow station and two military house boats].”
Ten out of the thirteen hostages taken have been released unharmed and MEND has publicly stated that it has no intention of killing hostages. “The hostages are being treated as well as we possibly can,” read an email statement MEND released on January 20th, “But they must live under the same conditions we have been subjected to for the last 48 years.”
These conditions, argues Ogon, are a different kind of violence imposed daily on the people of the Niger Delta. The region's environment has been devastated by oil operations, “It has affected agricultural and fishing yields,” he says. “When people can no longer depend on fishing and farming, when they can no longer depend on the land, when they can no longer depend on the rivers and creeks that have fed them and their fathers and grandfathers… What do you expect them to do?” he asks. “We are talking about the security of the future.”
“People feel like they are pushed against a wall,” explains Annie Brisibe, founding Director of Niger Delta Women for Justice. Though she does not condone the hostage-taking, MEND's tactics do not surprise her. “It's come out of frustration, anger, and complete marginalization,” she says from her home in the United States where she is now living. “This has created a lot of anger in the young men and women of the Niger Delta… People are forced into doing things that they're not supposed to do because of poverty.”
Despite the region's oil wealth, seventy percent of people living in the Niger Delta survive on less than $1 US a day.
There have been many attempts to non-violently address the harsh inequality in the Niger Delta. Most recently, Ijaw communities took Shell to court. “They wanted to take a judicial path,” explains Ogon. Nigeria's public assembly had previously passed a resolution compelling Shell to pay 1.5 billion for ecological damage. The case went to court after Shell refused to pay.
One of MEND's central demands is that Shell pay the 1.5 billion. In an email statement released on January 20th, MEND stated, “This money is to be paid directly to the affected communities and we ask no part of it. Shell must pay this sum or in the alternative, provide a firm commitment of its desire to settle this claim immediately. ”
At the end of February, the federal high court in Nigeria ordered Shell to pay the 1.5 billion to communities in the Niger Delta for damage caused to their environment by Shell's activities. Shell is appealing the decision.
Although MEND's tactics have caught international attention, neither their demands nor the government's reaction to them are anything new, says Brisibe. “Retaliation is always the same,” she says. “Always with force.”
Two weeks after the first four hostages taken by MEND were released, Nigerian military helicopters attacked what the government says were barges used for smuggling oil. MEND accused the military's attack, dubbed”Operation Restore Hope,” of targeting civilians, however, and accused Shell of providing the airstrip as the staging post for the helicopter attack.
This does not surprise Brisibe, who notes that the Nigerian military provides Shell with security. “The government has a better relationship with the multinational corporations than it has with its own citizens,” she says. “Shell provides the guns and the helicopters and the pay and the government provides the military.”
Ogon reports that the government response to MEND has had a far graver impact on communities than the tactics of MEND itself. “It's worse when federal troops invade local communities and subject innocent people to all forms of harassment and extrajudicial killings. It has made it really difficult for local people who depend on fishing and farming to go about their normal business.”
According to a 2005 report released by Amnesty International, this kind of government response is not unusual . “Government security forces continue to kill people in the Niger Delta with impunity. Excessive force is used to protect the oil industry and restore law and order–and the human rights of communities are regularly violated.”
Effectively confronting the impacts of oil multinationals in the region is almost impossible with a corrupt government that is benefiting from the oil wealth, says Brisibe. “The international community needs to pressure the government,” she says. “All we're asking for is good governance. A government that respects human rights and eradicates corruption.” That said, she continues, the international community has not often been a positive force in ending corruption and oppression in Nigeria. “The truth is the international community has a double standard when it comes to Nigeria. If you put pressure on Shell it will have to conform to international standards, which will decrease their profits. Is the international community ready to do this?”
In the meantime says Ogon, Shell is doing everything it can to project a facade of corporate responsibility. A recent posting on Shell Nigeria's website says that the company “is concerned about the likely effects on the environment of the oil spills resulting from the recent attacks on its pipelines and manifolds… As soon as it is safe to do so, we will commence immediate assessment of the environmental impact of such attacks and take necessary steps to clean up the affected areas.”
Ogon is confident that Shell's glossy pamphlets and tokenistic “development” projects no longer fool the people of the Niger Delta. “The level of understanding and coordination in the communities gives me hope,” he says. “They are saying 'We cannot let this go on.' They're not sitting down and allowing it to go on.”
Hillary Lindsay Managing Editor The Dominion Canada's Grassroots Newspaper www.dominionpaper.ca read more

Associated Press
HONG KONG — Cnooc Ltd., China's largest offshore oil producer by output, said Friday its 2005 net profit rose 57% on soaring oil prices and strong output growth. The company also said it had ended talks on buying natural gas from the Gorgon project in Australia and will instead seek supplies from Indonesia.
CNOOC's company secretary, Cao Yun Shi, told reporters on the sidelines of an earnings news conference that no price has been agreed for the Indonesian gas. “The Gorgon thing is over,” he said. Chevron Corp., the project operator, holds a 50% stake in the venture, while Royal Dutch Shell PLC and Exxon Mobil Corp. own 25% each.
China remains concerned over an increasing shortage of natural gas in the next five years, caused by sharply rising demand and limited production capacity, especially after the country's first liquefied natural gas terminal starts operating in mid-2006, analysts said.
Cnooc's net profit for 2005 was 25.32 billion yuan ($3.15 billion), compared with 16.14 billion yuan the year before. Revenue rose 29% to 69.46 billion yuan, largely lifted by higher oil prices. The company's average oil selling price rose 34% to US$47.31 per barrel.
Cnooc, which last summer gave up its $18.5 billion bid to acquire U.S. oil firm Unocal Corp. amid intense opposition in Washington, said it will keep hunting for overseas oil assets.
Last year, Cnooc said it had seven projects come on stream, and it made 14 new discoveries and eight appraisal successes in offshore China. It also expects several big domestic oil fields to start producing oil in the near future, the company added.
Cnooc, which disclosed a US$2.27 billion acquisition of a stake in a Nigerian oil field mid-January, said it proposes a special dividend of five Hong Kong cents on top of a final dividend of 10 HK cents. In 2004, each shareholder got a final dividend of three HK cents, plus a special dividend of five HK cents.
Offshore oil and gas production rose 14% to 141 million barrels of oil equivalent. Cnooc said late January it is targeting a 9% increase in oil and gas output this year.
Reserve replacement ratio, which measures how fast an oil company replaces the oil and gas it pumps with new findings, was 173% in 2004.
Capital spending in 2005 totaled US$2.20 billion, up from US$1.69 billion in 2004.
Copyright © 2006 Associated Press read more

Energy
• BP, Europe's largest oil company, pulled out of a $3bn Indian oil-refining venture hailed by chief executive John Browne in October as “a major step forward'' in the country.
• Northern Petroleum, a UK oil and gas company, said it has found oil and natural-gas reserves in five fields in the Netherlands. The shares soared to their highest in more than eight years.
• Prime Minister Tony Blair led an attack on French and Spanish attempts to wall off the energy market, calling on Europe to follow Britain in scrapping utility monopolies.
• Centrica said its Rough natural-gas storage site, Britain's biggest, will not be able to inject gas until June 1 after a fire last month.
• Royal Dutch Shell's oil and gas venture in eastern Russia has agreed a payout to a second local fishing company for obstructing fishing nets. read more

Tina G. Santos and Margaux C. Ortiz
Mar 25, 2006
THE GASOLINE OVERFLOW INCIDENT at the Pandacan oil depot in Manila on Thursday has strengthened the city governments stand that the oil facility should be shut down.
We never had any talk about the oil firms staying in Pandacan. The city governments stand remains that the oil firms would have to leave the area, especially after the Thursday incident, Mayor Lito Atienza told the Inquirer yesterday.
Gas overflowed from a storage tank of Caltex Philippines on Thursday morning, alarming residents living near the oil depot. The gasoline apparently came from a pipeline in a storage farm inside the depot.
Although depot officials said the problem was immediately contained, Atienza said he would immediately sign the ordinance changing the areas classification from industrial to commercial/residential.
The reclassification of the area under the Manila Comprehensive Land Use Plan and Zoning Ordinance of 2005 would make it unsuitable for the depot to continue operating. The ordinance was supposed to take effect in April 2003 but the oil firms have taken the matter to court. As a compromise, the oil firms signed an agreement with the city government to scale down their operations in the depot and to provide a green buffer zone between the oil tanks and the residential area.
However, Atienza stressed that the agreement does not supersede the ordinance which called for the facilitys closure. Were urging the oil firms to accelerate the removal of all other structures, they must vacate the area, he added.
The depot on the southern bank of the Pasig River near the Nagtahan Bridge is maintained by the countrys three biggest oil firmsPetron, Caltex and Shell. It consists of large manufacturing and storage facilities for petrochemicals that are connected by pipelines to refineries in Batangas province.
Residents living near the depot appealed to the oil companies to conduct their social responsibility programs in the area to make up for the facilitys continued presence in the city.
The residents were alarmed at the overflowing incident on Thursday morning, but we know that it would be impossible for us to call for the immediate transfer of the depot, Domingo Seposo, chair of Barangay 836 in Pandacan, told the Inquirer. Apart from ensuring environmental safety, they should also conduct some of their medical missions here, he said.
Seposo said the residents acknowledged the importance of the oil depot, but stressed that they should also receive compensation for the looming dangers the facility posed like oil spills and explosions.
Seposo explained that they formed the Fence Line Community for Human Safety and Environmental Protection to conduct regular dialogues with officials of the oil companies to share their concerns. read more

Lorna Siggins, Marine Correspondent
Mar 25, 2006
The Government's mediator in the Corrib gas controversy, Peter Cassells, has published new ground rules for negotiations between Shell and the five north Mayo men jailed last year over opposition to the onshore pipeline.
The move is designed to try and kick start the negotiations, which have been stalled since a row over public comments made on the issue by Minister for the Marine Noel Dempsey.
Speaking to The Irish Times last night, Mr Cassells said both parties had contacted him to seek clarification on the ground rules, and he expected to hold separate meetings with the two groups in the next week or so.
Significantly, the proposed terms include a commitment by both parties that “all developments, concepts and all routes should be considered in the mediation and that the parties may set down core non-negotiable issues”. Shell has previously said it will not change the basic plan for an onshore terminal, linked to the Corrib gas field 70km offshore by a high-pressure pipeline. The five men and the Shell to Sea campaign have been calling for an offshore terminal for the project.
Mr Cassells has also promised that no other parties will be involved in the talks – contrary to a position taken two months ago by the Minister when he said he had never intended talks to be confined to Shell and the five men only. This contradicted earlier statements made by Mr Dempsey on RTE and in the Dail on the day of and shortly after the men's release on September 30th.
The proposed ground rules for the mediation provide for absolute confidentiality, no reporting to third parties, exclusion of all other parties, and state that the Department of Communications, Marine and Natural Resources will be “a consultative partner as required and appropriate”.
Mr Cassells said he had also “given the Rossport Five and Shell a guarantee that the mediation will be carried out properly, professionally and in an independent manner in accordance with these ground rules”.
“The overall task of the mediation will be to reconcile the two interests of bringing the gas in the Corrib gasfield to market and ensuring safety,” he added.
A spokesman for the five men said that they would be meeting Mr Cassells on the issue of clarifying the ground rules.
A spokesman for Shell said that the company would “approach mediation positively and constructively with a view to achieving a negotiated solution”.
Shell said it had absolute confidence in water quality in Carrowmore lake, where abnormally high aluminium levels were reported recently.
Mayo County Council has attributed the results to “human error”. read more

Mar 25, 2006
Iraq has signed two deals for a metering system to track oil and gas flows, the Iraqi mission to the U.N. said, a step that could help get its economy back on track and reduce oil smuggling.
Iraq has signed a preliminary agreement by which the Royal Dutch/Shell Group will advise the Oil Ministry on setting up a system to measure oil and gas flow inside Iraq, as well as for imports and exports.
It has also signed a deal to rebuild the metering system at its Basra port. That agreement was reached with the U.S. Project and Contracting Office, which oversees infrastructure construction in Iraq.
The agreements were announced in a letter from Iraq's Deputy U.N. Ambassador Feisal Istrabadi to the International Advisory and Monitoring Board, the U.N. office that monitors Iraq's oil revenue. The letter was dated March 22 but made public Friday.
The board, established in 2004, has urged Iraq to install metering equipment in accordance with standard oil industry practices.
Iraq's economy has been severely weakened by oil smuggling to neighboring countries, a problem that could be checked in part by the presence of a metering system. The smuggling has created a fuel crisis that leads to occasional shortages even though Iraq is one of the world's leading producers of oil.
Some experts believe that oil smuggling may be funding Iraq's insurgency. read more

By REUTERS
LONDON (Reuters) – Oil held above $64 a barrel after hitting a near seven-week high on Friday as renewed supply woes in Nigeria increased expectations of prolonged outages in Africa's largest producer.
Oil in New York surged 3.5 percent on Thursday after Italian energy firm Eni said it could not honor crude oil export commitments from its Nigerian Brass River terminal, after a pipeline attack last week.
“I'd be expecting Nigerian outages to last for another couple of months,'' said Deborah White of SG CIB Commodities in Paris. “It's not particularly that the situation has deteriorated, but it is indeed quite serious.''
U.S. light crude for May delivery (CLc1) settled 35 cents higher at $64.26 a barrel. It hit a peak of $64.75 earlier Friday, the highest since February 7.
London Brent crude (LCOc1) settled 24 cents higher at $63.51 after a surge of $1.76 the previous day.
Eni's Brass River terminal loads around 200,000 barrels per day (bpd). The pipeline blast shut in 75,000 bpd of Eni's Nigerian output, but the company said on Thursday that if all went well, it could be repaired within a week.
Exports from Nigeria, a member of the Organization of the Petroleum Exporting Countries and Africa's largest producer, have been cut back by attacks on oil installations there. Royal Dutch Shell and other companies already have shut down 630,000 bpd of production, 26 percent of the capacity in the world's eighth-largest crude exporter.
NIGERIA
On Wednesday, a senior global maritime analyst at the U.S. Office of Naval Intelligence, Charles Dragonette, told a conference that Nigeria was no longer able to ensure security in the delta region where it pumps most of its crude.
Oil production from the African country will “hang precariously in the balance'' for some time, he said.
Crude oil has traded in a range of $60-$64 this week as traders' focus shifted between ample U.S. crude inventories and concern about real or threatened supply disruptions, including tensions over Iran's nuclear program.
Despite a surprise decline last week, U.S. crude oil inventories stayed near seven-year highs, or 9 percent above those of a year earlier.
“A force majeure declaration by Eni on its Nigerian crude exports, strong technical support and some delayed reaction to yesterday's U.S. stocks data all pushed prices in the same direction,'' said David Thurtell of Commonwealth Bank of Australia in Sydney, of Thursday's price jump.
Traders also appeared to be shifting focus to expected lower refinery production in the U.S., the world's largest gas guzzler, due to planned maintenance and unplanned outages.
Oil prices are sensitive to any disruption to gasoline supplies from U.S. plants ahead of summer, when demand usually peaks for the motor fuel.
Exxon Mobil Corp. will close for routine work in May a gasoline-producing unit at the largest refinery in the mainland U.S, according to traders. The one-month shutdown of the unit at the 564,000-bpd refinery in Baytown, Texas, is for planned work.
On Wednesday, Exxon shut down a crude unit and a coker at its refinery in Baton Rouge, Louisiana for 32 days, the company confirmed. read more

U.S.-based arm of Dutch mega-major emerges as mystery buyer at Alberta lease sale; creates new Canadian subsidiary SURE Northern Energy to probe untapped resource
Gary Park
For Petroleum News
A Texas-based arm of Royal Dutch Shell has disclosed it paid a record C$468 million for almost 220,000 acres of northern Alberta oil sands leases in February, ending six weeks of speculation about the identity of the mystery buyer.
Shell Exploration and Production in the Americas said March 21 it is creating SURE Northern Energy, a new Calgary-based subsidiary, to evaluate and potentially develop the heavy oil resources using possible ground-breaking technologies.
SURE is separate from Shell’s 78 percent owned Shell Canada, which is 60 percent operator of the Athabasca oil sands project in partnership with Chevron Canada and Western Oil Sands, each holding 20 percent.
Shell America’s Executive Vice President Marvin Odum said Royal Dutch Shell has a “suite of both enhanced and new heavy oil technologies that could potentially apply to this type of resource.”
“While these technologies are not commercially proven, we believe there is significant potential for us to pursue this opportunity,” he said.
“This move represents a distinct opportunity to assess new and emerging technology.”
Limestone-encased bitumen
The bitumen in the area acquired by Shell is actually encased in limestone, which would require a shift from the current methods of extracting the raw bitumen from sandstone or dirt, using open pit mining or steam-assisted methods.
Neither of those systems works with limestone, which is not easily mined and breaks down if water is used.
The resource is called carbonate and until now what little data has been gathered suggests the leases are not suited to thermal recovery techniques.
Shell is not talking in detail about its challenges although a company official told the Globe and Mail that “some type of enhanced thermal recovery will be required to economically develop the resource.”
The company has said it needs more time to conduct a detailed appraisal program.
For now it is encouraged by the size of the resources (which Shell has not disclosed), current market conditions and advances in enhanced oil recovery methods.
Venture 60 miles west of Fort McMurray
The SURE venture is about 60 miles west of the established Fort McMurray oil sands region, moving into an area of deeper deposits where Robert Bedin, a senior analyst at Ross Smith Energy Group, said companies have tried and failed to develop a workable technology.
The move by a new Shell subsidiary into the oil sands caught some off guard, given the track record of Shell Canada and its ambitious plans to expand the Athabasca project from 155,000 barrels per day to more than 500,000 bpd. However, Royal Dutch Shell said it is maintaining its full support for the Canadian subsidiary’s ongoing business.
In addition to Athabasca, Shell Canada is also playing a role in an attempt by a tiny aboriginal community in northeastern Alberta to develop a C$1 billion mining project covering more than 8,000 acres holding an estimated 500 million barrels of recoverable oil.
The Native-owned Fort McKay Group of Companies, a conglomerate of seven businesses, has been working as an oil field service firm for the past decade and last year generated C$50 million in revenue for its 550 residents through a variety of operations.
Fort McKay and Shell Canada have an agreement that could see Shell become the primary developer and producer if the first nation relinquishes control of its leases and simply collects royalties.
A stronger indication of what is under discussion is expected at a community meeting on April 4 when the Fort McKay leadership will unveil details of work done by the engineering firm SNC Lavalin to put a cost estimate on a mining project.
Core drilling is also under way to define the quality of the reserves.
Earlier reports have pointed to a possible 25,000 bpd operation coming on stream in the 2013-2015 period.
The land is close to the massive oil sands operations run by Shell, Syncrude Canada and Suncor Energy.
It was inherited by the Fort McKay community as part of a 15,000-acre land claim settlement that gives the community C$41 million in cash over three years, of which C$10,000 is distributed to each member and C$33 million has been locked into a trust fund for future investment. read more

Dear Sir
I am a 3rd year business studies student at the University of Liverpool, England and doing a report into the Exploration and Production strategies of Royal Dutch Shell. I am e-mailing you to request any information you might have on targeted oil fields and/or details on where Shell is exploring for oil and how the company goes about securing targeted oil fields.
Many thanks,
David
We have David's full name and his email address. If any of our readers at Shell E & P or elsewhere can assist him we will pass on David's contact details to you. Please respond contact via: [email protected] read more

24 MARCH 2006
By Alfred Donovan
This is part three of the publication of extracts from a letter and “NOTICE TO SHOW CAUSE” issued by TH Liew, the solicitors acting for the EIGHT Royal Dutch Shell companies collectively suing Dr Huong for alleged defamation in respect of postings on this website.
The letter and accompanying “NOTICE TO SHOW CAUSE” were served on Dr Huong on Wednesday, 15 Match 2006 notifying of Shell's intention to issue contempt of court proceedings against him punishable by imprisonment or fine. Shell has some expertise in this area having had the “ROSSPORT FIVE” committed to prison in Ireland last year the day after the most important ROYAL DUTCH SHELL dual AGM's in the history of the Anglo Dutch Group. It is fair to say that Shell management came to regret that move which resulted in an International PR disaster. Shell backed down in a spectacular U-TURN three months later and took steps to ensure that the five martyrs who opposed the Corrib pipeline were released from incarceration.
It will be interesting to see the timing on this imprisonment threat, bearing in mind the fast approaching inaugural AGM of ROYAL DUTCH SHELL PLC. Will Shell management be willing to risk another PR debacle which will inevitably focus even more attention on the matters raised by Dr Huong and on publications made on my websites? It is quite a poker game. All in all, a no win situation for Shell.
 
Since I am named in the proceedings and have played the key role in the various internet publications at the heart of the case, I have been asked by Dr Huong and his lawyers to supply an Affidavit testifying to the facts as Dr Huong has to respond to the charges made in the NOTICE TO SHOW CAUSE. My draft response in printed in red. All yellow highlighting is mine. All underlining is by Shell lawyers, TH Liew.
 
Part three extracts deal with sections 5, 6 & 7 of the NOTICE TO SHOW CAUSE: –
The 2.2.06 publication of your letter to Jyoti Munsiff on the Shellnews.net website
5. You wrote this letter to Jyoti Munsiff:
“Congratulations on your appointment as Chief Ethics and Compliance Officer for Royal Dutch Shell Plc…

The entire article is accessible via the following link: –
http://shellnews.net/2006 docs/DR HUONG 2006/royal_dutch_shell_group-dr-huong-part-three-march-2006.htm read more

Syncrude, Suncor to pay less in 2009
PATRICK BRETHOUR
CALGARY — Alberta is forecasting a steep drop in royalties from the oil sands in three years — by as much as a fifth — as the two founding members of the sector start paying charges on cheaper bitumen rather than more valuable synthetic crude.
In budget documents released this week, the province predicts that royalties from synthetic crude and bitumen will drop to $1.35-billion in fiscal 2008-09 from $1.71-billion the previous year. Even as royalties fall, oil sands production is forecast to rise sharply, jumping nearly 40 per cent between now and fiscal 2009.
The smaller income on a higher volume of production is largely predicated on the two oldest companies in the oil sands sector, Syncrude Canada Ltd. and Suncor Energy Inc., beginning to pay royalties on bitumen, which sells at a deep discount to synthetic oil. As a result, the royalty bill for the two companies would fall substantially.
Prices are expected to decline as well — helping to push down royalties — but the drop in payments by the oil sands sector is the most significant factor at work, and part of a larger trend of Alberta getting a smaller part of the income from exploiting the province's energy resources. The Energy Department's business plan released this week shows that the Crown was paid 19 per cent of industry revenue between 2002 and 2004, down from the 24 per cent it received between 1999 and 2001. The most recent figures are lower than the target of 20 to 25 per cent that the government has set for itself.
Energy Minister Greg Melchin has said that the decline in part results from rising oil sands production and a system that allows the projects to pay low royalties while they recoup capital costs. Royalties then jump sharply, a scenario laid out in the budget, where the province's revenue from bitumen and synthetic crude production rises by 50 per cent from fiscal 2006 to fiscal 2008.
But in the next year, the tally drops by $360-million, largely a reflection of the expected switch by Suncor and Syncrude. Both companies were in business before the province established a fiscal regime in the mid-1990s that allowed future oil sands operators to choose between paying royalties on bitumen or synthetic crude. Although the bitumen royalties are lower, the tradeoff is that a company gives up the right to deduct the billions it might spend on an upgrader facility from the calculations of those payments to the Crown.
Shell Canada Ltd., for instance, decided in 1998 that it would pay royalties on bitumen. (Although Shell does not pay royalties on its synthetic crude production, any profit that results are subject to corporate tax.) However, the decision to pay bitumen royalties meant it was not able to apply the cost of its Scotford upgrader. The decision made seven years ago — a “shot in the dark,” said spokeswoman Janet Annesley — proved to be the right one. Bitumen prices rose, but crude oil prices rose even more, leaving Shell better off.
The policy was designed to ensure that any company wanting to exploit the oil sands would not end up being inadvertently encouraged to simply extract raw bitumen and ship it out of the province to be upgraded. But its arrival meant that Suncor and Syncrude could have been stuck with permanently higher royalties than their competitors, so they were given the right to make a changeover.
Although the two companies have yet to formally make a decision, both have entered into extensive negotiations on when and under what conditions they could make the transition. Suncor has largely hammered out its agreement, while Canadian Oil Sands Trust, the largest owner of Syncrude, says the talks with the province are still in their initial stages.
If they do make the switch, they will lose any unused credits for earlier capital spending. However, the benefits they have already received will not have to be refunded — an acknowledgment, Alberta's Energy Department says, that the province also benefited from the two companies producing synthetic oil.
Greg Stringham, vice-president at the Canadian Association of Petroleum Producers, said the public may have to adjust its expectations of how much “economic rent” can be extracted from each barrel of oil or gigajoule of natural gas, although total royalties could well continue to grow. Costs are on the rise generally, and the more profitable conventional production is giving way to the capital-intensive businesses such as the oil sands and coal-bed methane. However, Mr. Stringham added that he has some hope that major natural gas discoveries could still deliver high rates of production, and high royalties. read more

CALGARY, Alberta (Reuters) – Shell Canada Ltd.(SHC.TO: Quote) has wrapped up a C$400 million ($342 million) project to produce ultra low sulfur diesel fuel at its two refineries, the company said on Thursday.
The Calgary-based company, 78-percent owned by Royal Dutch Shell Plc (RDSa.L: Quote), completed work on two units, called hydrotreaters, at its refineries in Montreal and in the Edmonton, Alberta, area.
The facilities can now produce diesel fuel containing just 15 parts per million of sulfur. That's a 90 percent drop from previous amounts and matches new Canadian government regulations for sulfur levels in diesel that come into effect on June 1. Canada already requires refineries to produce ultra low sulfur gasoline.
Shell Canada is the country's third-largest petroleum refiner and explorer by market value. Its Montreal refinery can process 130,000 barrels of oil a day, while its Scotford plant, near Edmonton, handles read more

Friday 24 March 2006
NEW DELHI, March 24 (Reuters) – Royal Dutch Shell Plc (RDSa.L: Quote, Profile, Research) is not actively looking to sell a stake in its Hazira LNG terminal, the head of its Indian operations told reporters on Friday.
“If a company adds value to the totality of Hazira terminal, we will talk to them, but we are not actively seeking any buyer,” Vikram Mehta said on the sidelines of the India Oil and Gas Conference in New Delhi.

By Christopher Hope (Filed: 24/03/2006)
Shell has hired its first-ever technology guru in a bid to ensure that the oil and gas giant stays at the cutting edge of developing new alternative energies. Jeroen van der Veer, Shell's chief executive, will announce this morning that he has appointed Jan van der Eijk to be group chief technology officer from May 1.
Mr Van der Veer is keen to ensure that Shell is set apart from its rivals by its focus on new technologies.
Mr Van der Veer said: “This appointment is a significant step forward for the group and represents our firm commitment to a culture that fosters innovation with visible support for technical leadership at the most senior levels of the company.”
The new chief technology officer will report directly to Linda Cook on Shell's board. Mr Van der Eijk will lead a team of eight “chief scientists” appointed earlier this year and will be charged with drawing up “a group technology strategy and an annual group research and technology plan”.
Mr Van der Veer added: “Technology can be a key differentiator for Shell. For this to be the case, we must have world class research and development and effective technology application, aligned with our strategy and embedded in a real culture of innovation.” read more

By Ann O Loughlin
A NUMBER of residents being sued by Shell over their opposition to gas pipeline works may amend their defences to include claims that there is no valid consent for the pipeline, the High Court ruled yesterday.
However, while permitting such amendments, Justice Mary Laffoy said she was disposed to direct the trial of a preliminary issue as to whether the defendants could raise public law issues in the case.
The question whether the issues raised can be dealt with in the proceedings will have to be addressed at some time, she said.
She would not direct a trial of the preliminary issue until Shell and the Marine Minister Noel Dempsey had delivered their replies and defences, and until all the issues between the sides had been clearly identified.
She was dealing with a number of preliminary legal issues in the action by Shell E and P Ireland against five local people and a photographer arising from their opposition to the gas pipeline development near Rossport, Co Mayo.
The defendants are Philip McGrath, James B Philbin, Willie Corduff, Monica Muller, Brid McGarry and Mr Peter Sweetman, the latter with an address at Rathmines in Dublin.
In its proceedings against the six, Shell alleges they obstructed and interfered with Shell's entry onto lands. The defendants have denied the claims. After delivering her decision, the judge said she required the sides to further consider a number of matters and returned the action to Wednesday next. read more

Michael Kanellos, for News.com
SAN FRANCISCO–Airplanes, skyscrapers and cars are all going to need better sunglasses, according to John Petraglia, CEO of SPD Control Systems.
Smart Glass, which will be shown off and discussed more fully in about eight weeks, is industrial glass that turns dark in bright sun and becomes clear when it gets dark. By keeping out (or letting in) sunlight selectively, companies can cut their building electricity bills by up to 20 percent because of reduced heating and air conditioning costs, Petraglia said.
Companies such as Hitachi and Leminur will produce the glass, which is coated with a special emulsion, while SPD Control Systems will make the controllers that switch the tint. Another company, Research Frontiers, owns the patents on Smart Glass and licenses the technology to SPD, Hitachi and others.
“Smart Glass changes color from clear to opaque and all shades in between, and in a second or two,” Petraglia said during a presentation at the Cleantech Venture Forum taking place here this week. Aircraft corporations are also interested in Smart Glass as a way to increase passenger comfort.
The three-day conference has become one of the major stops for start-ups trying to capitalize on the young but growing interest in clean technology and energy efficiency. Across town, energy is one of the dominant themes at the Dow Jones VentureOne Summit.
Nearly 140 venture firms are raising funds for so-called clean-tech investing, according to Nick Parker, chairman of the Cleantech Venture Network, which sponsors the Cleantech Venture Forum. In 2004, more processed silicon got consumed in making solar panels than semiconductors, he added.
“A broader concentration on clean tech will be necessary if we are going to have sustainable societies,” he said. “Clean-tech VC is increasingly a substitute for corporate R&D.”
A yawning gap remains between the promise of many start-ups and reality. Many of the companies presenting at the Cleantech Forum have achieved a few million in revenue at most, but some assert sales will rise to more than $100 million by 2009. Corporations like Philips and General Electric also make products for energy efficiency.
Still, the enthusiasm is tough to miss. Here are some of the companies and their pitches from the Cleantech Forum so far:
• ClearFuels Technology: The vegetable alcohol for ethanol now mostly comes from fermentation. Hawaii's ClearFuels, by contrast, takes ground and dried biomass and turns it into synthetic gas, which is then converted to ethanol that can be mixed with gas. Shell and ExxonMobil want to deploy a similar process to convert natural gas to vehicle fuel for polluted megacities.
“There's enough virgin biomass that you don't need to go to things like municipal waste,” which can cost more to process, said ClearFuels CFO Eric Darmstaedter.
“A broader concentration on clean tech will be necessary if we are going to have sustainable societies.” –Nick Parker, chairman, Cleantech Venture Network
The company can turn a ton of biomass into 200 gallons of fuel, better than the 100 gallons of fuel by the conventional methods, according to Darmstaedter. The synthetic gas produced in the process can be used to run the plant. The higher yields mean that the ethanol from the process costs 75 cents to 90 cents, less than the $1.10 cost of a gallon of traditional ethanol.
• Extengine Transport Systems: The Fullerton, Calif.-based company produces a unit that attaches to the exhaust system of diesel trucks and buses and converts the nitrogen/oxygen gases in the exhaust that contribute to global warming into nitrogen and water vapor. It does this by mixing in ammonia.
So far, it has sold $1.2 million worth of its Adec I converters and just came out with the Adec II, which plugs in easier. The market is being driven by the fact that many states have begun to impose stricter emission standards and in tandem have offered subsidies for retiring or retrofitting old vehicles. Retrofitting, says Extengine President Philip Roberts, is cheaper.
“Diesel engines last forever,” he said.
• Ice Energy: Did you ever stick your head into the freezer on a summer day and inhale the cool vapor? That's Ice Energy in a nutshell. The company's Ice Bear 50 system makes ice in large quantities, keeps it in an insulated copper tub, and then delivers the cool air during the hot afternoon hours, when electricity costs the most.
Customers who have installed the system, including big-box retailers like Petco, have seen overall energy bills decline by 15 percent, he said. Ramirez, however, did not fully explain how the company could keep away large, established competitors. Revenue over the last 12 months came to $1.75 million, but he said it would grow to $110 million by 2008.
• Metrolight: The company essentially makes processors and software that can replace the traditional control systems in High Intensity Discharge, or HID, lights used in streetlights and fixtures in stores. By more acutely controlling the electricity going to these lights, power bills can be cut. Lighting consumes 20 percent to 25 percent of all the electricity in the industrialized world, according to Metrolight founder Yigal Yanai. The company's revenue over the last 12 months came to $3.3 million.
• MWOE Solar: CEO and University of Toledo professor Xunming Deng says he can cut the costs involved in manufacturing amorphous silicon solar panels by 90 percent. (Most solar panels employ rigid crystalline silicon solar panels, which harvest more energy. But flexible amorphous silicon panels are growing in demand.)
Deng, however, would not describe how his company can reduce the costs in this manner. The only clue he gave was that MWOE's panels incorporate silicon and germanium, not just silicon. MWOE has an exclusive license on the technology from the university.
• TecHarmonic: Although not a huge contributor to global warming, semiconductor manufacturing requires a number of chemical gases. TecHarmonic makes equipment that eliminates those gases. The equipment can also be used at disk drive and solar factories to abate regulated gases. read more

24 March 2006
By Alfred Donovan
Published below is a further section from the NOTICE TO SHOW CAUSE served on 15 March 2006 on Shell Whistleblower Dr John Huong by solicitors acting for the EIGHT Royal Dutch Shell companies collectively suing him for alleged defamation (relating to postings on this website).
The NOTICE TO SHOW CAUSE basically notified the Defendant, Dr Huong of the intention to issue contempt of court proceedings and gave him 10 days in which to provide evidence why he should not be imprisoned or fined for the alleged contempt.
Since I am named in the proceedings and have played the key role in the various internet publications at the heart of the case, I have been asked by Dr Huong and his lawyers to supply an Affidavit testifying to the facts. Part of my draft Affidavit is published below.
PART TWO OF NOTICE TO SHOW CAUSE ARTICLE (PARAGRAPH'S 2, 3 & 4) SERVED ON DR HUONG.
2. You disobeyed the Order by publishing or causing to be published, the following:
The 29.1.06 publication of your Defence on the Shellnews.net website
3. You forwarded a copy of your Defence to Alfred Donovan with the knowledge that he would publish it on his website at ShellNews.net, which he did. Alfred Donovan was, for this purpose, your servant or agent.
DRAFT COMMENTS OF ALFRED DONOVAN
As indicated I have never been the agent or servant of any third party in my dealings with Shell. The same applies to my son John.
We have assisted a number of parties who contacted us, including the WWF (formally known as the World Wildlife Fund), The Ecumenical Council for Corporate Responsibility, the U.S. Public Interest Research Group, and the New York lawyers Bernstein Liebhard & Lifshitz, LLP acting for the lead Plaintiffs in a U.S. class action lawsuit against Royal Dutch Shell plc (and others) in respect of the reserves fraud.
In each case our assistance has involved us posting/publishing information on my websites. We have never charged any of these parties or anyone else a penny. Everything we do in in regard to my websites is completely free. I take full responsibly for everything published. We have declined to publish negative commentary against Shell when deemed inappropriate by us. Dr Huong has never been in a position of knowing that we will automatically publish any material he shares with us. The same applied to the Defence document. The fact of the matter is that Dr Huong does not own or operate a website and has no guarantee that we will publish anything.
The WWF, U.S. PIRG and the ECCR all appealed through the medium of my websites for Shell shareholders to support resolutions to be put to Shell shareholders at the Royal Dutch Shell Plc AGM in May 2006. The ECCR was successful in recruiting more than the required 100 shareholders and the relevant resolution has been accepted by Royal Dutch Shell Plc. I hope that my websites generated some of this support.
Mr Zack Brown, a representative from U.S. PIRG was in the UK a few weeks ago. My son John and I met Mr Brown at Lloyds Registrars in Worthing in an unsuccessful attempt to assist in the purchase of stock in Royal Dutch Shell Plc. We also corresponded with Royal Dutch Shell Plc in relation to U.S. PIRG but made it clear that we had no authority to speak for the organisation.
With regard to the class action, Bernstein Liebhard & Lifshitz has confirmed that my website successfully generated a shareholder, Mr Peter M Wood, to act as a representative of all non-U.S. Shell shareholders in the class action. As a result, a motion has been filed with the appropriate U.S. District Court.
We are happy to assist anyone who shares our aspirations that Royal Dutch Shell Management should abide with Shell’s STATEMENT OF GENERAL BUSINESS PRINCIPLES which include honesty, integrity, transparency, and respect for people in all of Shell’s dealings.
FOR THE FULL ARTICLE CLICK HERE:
http://shellnews.net/2006 docs/DR HUONG 2006/notice-to-show-cause-part-two-march-2006.htm read more

REUTERS[ THURSDAY, MARCH 23, 2006 11:51:49 AM]
NEW DELHI: GAIL (India) Ltd said it had signed an agreement with Royal Dutch Shell to use part of the oil major's facilities to regasify imported liquefied natural gas (LNG) in western India.
Shell set up India's second LNG terminal last year at Hazira in the western state of Gujarat, where Petronet LNG built its LNG importing facilities at Dahej in 2004.
GAIL spokeswoman Vandana Chanana said the company would only use part of the 2.5-million-tonne per annum capacity terminal.
“GAIL has an agreement with Shell for using a part of their regasification capacity at Hazira as a tolling facility and would use the terminal as and when GAIL imports LNG,” she said. This month, a senior GAIL official who declined to be named said that the company was in talks to use the entire capacity of Shell, which would eventually provide LNG for the Dabhol power plant in the western state of Maharashtra.
The company source had said the first cargo of LNG was expected to land at Hazira by June, but the spokeswoman said LNG could be supplied to Dabhol only after pipelines connecting import facilities to the power plant were built by December.
The GAIL spokeswoman said talks had been held with the Qatar government in March to supply LNG to India and the talks were led by India's petroleum secretary M.S. Srinivasan and attended by officials from the oil ministry, GAIL and Petronet. read more

JAMES STEVENSON
CALGARY (CP) – It's the $465-million question: What energy potential does Royal Dutch Shell (NYSE:RDS.A) see in a remote chunk of Northern Alberta's wilderness that no one else does? One day after the European-based oil and gas giant revealed that it had spent close to half a billion dollars for nearly 900 square kilometres in the middle of nowhere, the Canadian oilpatch was still trying to figure out why.
“It's a lot of money for an area that hasn't shown that kind of promise through other wells or projects or pilots or what have you,” said Tom Ebbern an energy analyst with Calgary-based Tristone Capital.
“It would be more understandable if they were playing around in a couple little sections and done some drilling and shot some seismic and maybe poked some holes here and there.”
But the land, located about 100 kilometres west of the oilsands hub of Fort McMurray, Alta., is about as unknown as there is.
The Alberta Energy and Utilities Board said there's been a few test wells drilled in the area in the past, but not for at least 15 years and the area is viewed as “largely undeveloped.”
The provincial energy regulator says the area is a carbonate deposit, which means that bitumen is basically trapped in limestone rather than in the sand which characterizes most currently viable oilsands projects.
According to a National Energy Board report, of the 315 billion barrels of ultimate potential held within the oilsands, about 38 billion barrels are within carbonate deposits. And they have been considered beyond economic reach.
Meanwhile, Royal Dutch Shell remains vague on the type of technology it will use to access its new oilsands deposits.
“The resource underlying these tracts is too deep to mine,” spokeswoman Destin Singleton said in an email from Shell EP America's office in Houston.
“We believe it may be possible for us to apply either enhanced or new emerging heavy oil technologies for this type of resource.”
“Some type of enhanced thermal recovery technology will be required to economically develop the resource.”
Murray Gray, a professor of chemical engineering at the University of Alberta, said Shell has been doing a lot of work in the U.S. lately trying to find a way to get oil from oil shale rocks.
“They've been developing technology and writing an awful lot of patents in the area of getting heavy hydrocarbon material out of some very tough places,” he said Wednesday from Edmonton.
Gray said the technologies – which include potentially running electricity through the deposit, as well as underground combustion techniques – are very different than the current steam-based approach used by most Canadian energy companies to melt the oilsands.
And he said the carbonate would technically be easier to solve than oil shale since it would require less heat.
Royal Dutch Shell plans to drill some appraisal wells later this year to “further understand the resource, the geology and the potential for development.”
It's also possible that Royal Dutch Shell has not yet identified the technology it will use, said Ebbern. With oil prices remaining stubbornly above the $60 US per barrel mark, the economic threshold for new oilsands technologies has become much higher.
“And if you're convinced that the resource is there, then half a billion dollars may in hindsight be a reasonable price to pay for the optionality of holding a very material bitumen resource,” said Ebbern.
Royal Dutch Shell's land grab in northern Alberta is completely separate from its other oilsands opportunities currently being pursued by subsidiary Shell Canada Ltd. (TSX:SHC).
Shell Canada is the operator of the Athabasca oilsands project, one of Canada's largest open-pit oilsands mines, which produces more than 150,000 barrels of oil a day. And while the company is traded publicly on the Toronto stock market, it is 78 per cent controlled by Royal Dutch Shell.
© The Canadian Press, 2006 read more

Mar 23, 2006
By David Adam
A new public-private partnership to develop greener energy was announced by the chancellor.
The National Institute for Energy Technologies aims to raise pounds 1bn to introduce technology such as cleaner coal-fired power stations and ways to dump carbon dioxide under the seabed.
It will build on a broader initiative called the Energy Research Partnership announced in January under the leadership of David King, the government's chief scientific adviser, and Paul Golby, head of the energy company E.ON UK. BP, Shell, and the French utility company EDF Energy will also be involved. read more

By Alfred Donovan
I have published below a letter from TH Liew, the solicitors acting for the EIGHT Royal Dutch Shell companies collectively suing Dr Huong for alleged defamation in respect of postings on my ShellNews.net website.
The letter was the cover letter in respect of the “NOTICE TO SHOW CAUSE” proceedings served on Dr Huong last Wednesday, 15 Match 2006 notifying the intention to issue contempt of court proceedings.
Paragraphs 18 & 10 of the NOTICE TO SHOW CAUSE stated as follows: –
18. Our clients intend to issue contempt proceedings against you for the above breaches of the Order.
19. We therefore now provide you with this formal notice for you to show cause within 10 days of its service on you, why you should not be committed to prison or fined for the above contempt.
Click here to read the full article: http://shellnews.net/2006 docs/DR HUONG 2006/shellshowcausedocumentmarch2006.htm read more

By Mike Oduniyi
Lagos
Crude oil exploration in Nigeria's deep offshore region has suffered a set back after multinational oil companies including Chevron and Shell, joint owners in Block OPL 250, relinquished the asset to the Federal Government over poor results from a five year drilling campaign.
Nigeria's oil production has again been further cutback by 75,000 barrels per day (bpd) after unknown persons blew up Friday night, a crude oil pipeline belonging to Nigerian Agip Oil Company (NAOC) in Tebidaba-Brass, Bayelsa State. This has now taken the country's total production loses to 631,000 bpd of oil, representing 25 percent of Nigeria's daily oil production.
The stakeholders in OPL 250, which also included US firm ConocoPhillips and Brazil's Petrobras, said they had an unsuccessful exploration campaign in the block for which they paid the Federal Government signature bonus of $75 million.
OPL 250 was among the eight oil blocks awarded in December 2000, when the government held the first open bidding round for the allocation of oil licenses.
Chevron, appointed the operator of the block after a bitter quarrel with Shell (which originally believed it owned the block), drilled one well, Iroko -1, in the block to a water depth about 2,300 meters.
However, the acreage, which first hold much geological prospects and attracted interest from major oil companies that participated in the 2000 licensing round, results obtained from the well drilled fell short of expectations.
“After drilling Iroko-1 well and we evaluated the hydrocarbon potential, what we saw was short of commercial discovery,” a source close to the joint venture partners, disclosed to THISDAY.
“The result was too short to justify deepwater development. So the stakeholders in block OPL 250 agreed to relinquish,” the source said, adding that the decision had been communicated to the Nigerian National Petroleum Corporation ((NNPC) under the Production Sharing Contract (PSC) agreement.
The decision climaxed the bitter struggle for the possession of OPL 250, then believed to be rich in oil reserves compared to seven other offshore oil blocks, OPLs 214, 229, 242, 244, 318, 320 and 324, the Federal Government put on offer in March 2000 in the first of its open and competitive licensing rounds in the country to encourage a shift to the offshore by foreign companies.
Shell had offered $200 million for the block, while US-based Ocean Energy put in $210 million, Petrobras $100 million and Chevron $75 million. The Ministry of Petroleum Resources, however, announced Chevron as the operator, joining Shell, Ocean Energy and Petrobras as partners.
In November 2001, Chevron and its partners signed a 30-year PSC agreement with NNPC for the exploitation of OPL 250.
The exploration setback in OPL 250 has left Chevron, Nigeria's second biggest oil producer still with no deep offshore production although the US oil major now looks up to drilling in Agbami, Usan and Aparo fields for a successful foray into the deep offshore region. Shell on the other hand, has the huge Bonga field already producing for it some 200,000 bpd of oil.
“The fields in the deepwater are never the same. One may have a good geological feature but poor in accumulation of oil, it is only when you drill that you can really say,” a Chevron official explained.
Meanwhile, oil production from the country has further reduced by 75,000 bpd after unknown persons attacked an Agip oil pipeline in the swamp of Bayelsa State on Friday night, signifying that insurgence in the Niger Delta was now moving eastward. Agip officials told THISDAY yesterday that there was an attack on the company's trunk line. “Some persons yet to be identified blasted the pipeline. Right now we are moving to curtail the oil spilled from the attack on the line,” said an official. He said that no group has yet come out to claim responsibilities for the attack.
A militia group known as the Movement for the Emancipation of the Niger Delta (MEND) had launched series of attacks on Nigeria's oil producing facilities since January, to press demand for increase in the share of oil revenue for oil-producing states, release of two Ijaw leaders from detention and payment of $1.5 billion compensation by Shell to Ijaw communities.
THISDAY had reported recently that oil companies with operational bases mainly in Rivers and Akwa Ibom states could be next on the firing line as the militants planned an eastward proliferation of their attacks on facilities in the area.
Companies prominent in this area are Italian oil firm, Nigerian Agip Oil Company (NAOC), US oil major ExxonMobil and French firm Total.
It was revealed then attacks on the oil firms based in the east of the Niger Delta, might further worsen the production and revenue losses. Mobil, Total and Agip account for a total of 1.1 million bpd of oil production. read more

Offshore staff
(UK, North Sea) – An investigation has been launched into the cause of a blaze that led to nearly 130 oil workers being airlifted from a North Sea platform. An electrical fire on Shell's Tern installation, 105 miles northeast of the Shetland Islands, caused the evacuation of 128 non-essential personnel last Thursday.
A team of investigators from the UK Health and Safety Executive are on the platform looking into the fire, and Shell has also launched its own internal investigation.
Shell said no one was hurt and all personnel have been accounted for. read more

Russian President Vladimir Putin has said a pipeline carrying Siberian oil could be built through China.
If the project goes ahead it would be the biggest trade deal between Russia and China and would cast doubt on an alternative plan to pump oil to Japan.
Energy-hungry China and Japan have been competing for years for a direct link to Russian oil supplies, but Moscow has so far refused to commit to a route.
On Tuesday, China and Russia signed a separate deal to double gas to China.
The deal on the gas pipeline could see China receive up to 80bn cubic metres of Russian gas annually within five years.
Mr Putin is currently visiting China with a 90-member delegation, including business leaders and representatives of Russia's oil and gas industries.
Japanese offer
President Putin's hint that Russia now favours a Chinese route for the oil pipeline will come as a surprise, says the BBC's Quentin Somerville in Shanghai.
The Japanese had offered to pay most of the construction costs and the contract had previously appeared to be going their way, our correspondent says.
Russia stressed on Tuesday that a feasibility study must be completed before a final decision is made on the route of the oil pipeline.
If a deal goes ahead with Beijing, the pipeline will bring 600,000 barrels of oil daily from eastern Siberia to north-eastern China.
Moscow's energy minister told Russian news agency, Tass, that the link to China could be constructed before the end of 2008.
Russia's oil supplies, though plentiful, are not inexhaustible and building a Japanese and a Chinese pipeline is not a likely option, our correspondent says. read more

By CHIP CUMMINS
March 22, 2006; Page A14
Royal Dutch Shell PLC said it paid 465 million Canadian dollars (US$400 million) for the rights to explore 219,000 acres in Alberta, Canada, betting big on the company's ability to find and produce heavy, difficult-to-extract oil there.
The move is the latest by Shell to shore up its store of future oil and natural-gas projects around the world. It also underscores the oil industry's enthusiasm for Canada's vast oil sands, tar-like deposits of petroleum that are much more difficult and costly to extract from the ground than conventional reserves in places like West Texas or the Middle East.
The big initial outlay, paid out in an Alberta government auction, must be followed by billions of dollars in capital investment if initial exploration and development planning succeed. But amid today's superhigh oil prices and fewer prospects elsewhere for big oil companies, Canada's oil sands have attracted significant new investments.
Shell is already a big oil-sands player. The lease turns Shell into “one of the biggest, if not the biggest, land owner in the oil sands,” says Tom Ebbern, executive managing director of Tristone Capital, a Calgary-based investment adviser, who says he doesn't own Shell shares. Moreover, the scale of Shell's new acreage acquisition is eye-popping compared with recent deals. Chevron Corp. said earlier this month it would spent C$70 million for 75,000 acres in the area. Shell has the right to acquire a 20% interest in that project.
Shell, The Hague, Netherlands, said it established a new subsidiary to proceed with the exploration and development work.
—- Russell Gold contributed to this article.
Write to Chip Cummins at [email protected] read more