June, 2006:

From The Associated Press

Oil industry opposes paying 1990s error in its favor
 
June 21, 2006

WASHINGTON – Oil companies are under pressure in Congress to renegotiate offshore drilling leases containing a government error that could give the industry a $10 billion windfall.

The oil companies are steadfastly against renegotiating any of the lease contracts, which involve 56 companies. Last month, the House passed a provision that would bar companies from 2007 offshore leases unless they agree to renegotiate the 1998-99 contracts. read more

MSNBC: Liquefied natural gas output to soar worldwide

The number of countries exporting liquefied natural gas will grow 30 per cent by the end of the decade, the US Department of Energy said on Tuesday.

Guy Caruso, head of the Energy Information Administration, the statistical arm of the DOE, said: “We do see the emergence of a robust LNG trade, leading to perhaps a real global gas market.”

By 2010, 17 countries will export LNG, with Norway, Russia, Equatorial Guinea and Peru joining the group. read more

Published: Jun 21, 2006

Meath County Council is seeking damages of up to 6 million from multinational giant Shell after the leakage of petroleum products from one of its petrol stations halted construction of new civic offices in Trim, Co Meath.

In High Court proceedings, the council is claiming damages estimated at between 5 million and 6 million after a hydrocarbon discharge in 2001 contaminated a site, previously used as a car park for the local swimming pool, adjoining a petrol station owned by Irish Shell Ltd at Watergate Street, Trim. read more

By Harvey Pitt

Published: June 21 2006 03:00 | Last updated: June 21 2006 03:00

Although the early Ptolemaic and Aristotelian concept of geocentrism – that the planets and Sun revolve around Earth – was discredited by Copernicus and Galileo by the late 16th century, many Americans residing in Congress and at certain regulatory agencies adhere to their own brand of “American geocentrism”. This takes as axiomatic that anything and everything American is not only good, it is the best. Nowhere do adherents deem this doctrine more applicable than in the regulation of capital markets. read more

By Virginia Marsh

Published: June 21 2006 03:00 | Last updated: June 21 2006 03:00

Australia’s liquefied natural gas industry is on the brink of a A$50bn (US$37bn) investment boom that is set to make it the world’s third-largest LNG exporter within five years, in spite of the recent setback for Chevron’s Gorgon project.

For Woodside Petroleum, the pioneer of the local LNG sector, the planned investments mean it could overtake BP in the next decade to become the world’s biggest non-government owned LNG operator after Shell. read more

By Ivar Simensen in London and Richard Beales in New York

Published: June 21 2006 03:00 | Last updated: June 21 2006 03:00

Royal Dutch Shell sold $1bn of five-year bonds yesterday, the Anglo-Dutch oil company’s first SEC-registered issue in the US market.

The bonds priced to yield 52 basis points over Treasuries, in line with guidance.

The scarcity of Shell paper helped the price below the prevailing Libor yield, among the tightest spreads in memory for a US corporate benchmark issue, according to a person close to the deal. read more

Jun 20, 2006

HOUSTON (MarketWatch) — A House subcommittee has subpoenaed Royal Dutch Shell Plc. (RDSA) after the company balked at participating in a hearing this week on the government’s troubled royalty program for the Gulf of Mexico.

The hearing, scheduled for Wednesday morning, features executives from Chevron Corp. (CVX), ConocoPhillips (COP) Exxon Mobil Corp. (XOM) and Kerr-McGee Corp. (KMG). But Shell’s appearance was an open question after the company indicated it was unwilling to appear, a House committee aide said Tuesday. The subpoena went to John Hofmeister, the head of Shell’s U.S. division, the aide said. “We assume they’re going to show up tomorrow,” said the aide. “They’ve been issued a subpoena to show up.” read more

Raymond J. Learsy
Mon Jun 19, 6:30 PM ET

Yesterday on NBC’s “Meet the Press” we were treated to a heavy dose of oil patch pablum by the likes of the chairmen of ConocoPhillips, Chevron Corp., and the president of Shell Oil. We “learned” a great deal.

Mr. John Hofmeister, president of Shell Oil informed us that “If we didn’t have this level of profitability, I don’t think we could get supplies to where they need to get to.” The clucking noise of acknowledged contentment you heard in the background, was that of Lee Raymond, erstwhile chairman of Exxon-Mobil, counting his $400 million retirement package for having personally pumped gas into your car. read more

DALLAS — Lawmakers and consumers can help make energy more affordable and plentiful by tapping into additional resources, Shell Oil Co. President John Hofmeister said.

“Energy security in this country is a sure bet, and energy security in this country will come from diversity,” Hofmeister told business leaders during the start of a 50-city nationwide tour to discuss energy policies on Friday.

He said energy supplies would improve and prices would drop if more domestic resources _ about 100 billion barrels of oil nationwide _ were tapped, particularly from places like the eastern Gulf of Mexico. read more

By Alfred Donovan

Ogoni class action lawsuit against Shell
 
A United States Magistrate Judge, Henry Pitman, has dismissed a motion filed by Royal Dutch Shell for a court appointed official (a Master) to investigate alleged perjury by witnesses who have given testimony prior to the pending trial.

We have only just received from the National Union of Ogoni Students International, a copy of the relevant court order of Judge Henry Pitman, dated 31 March 2006 (printed in its entirety at the foot of this article). read more

Mon Jun 19, 2006 2:08 PM ET

NEW YORK, June 19 (Reuters) – Shell Oil Co. said Monday the release of benzene-rich pyrolysis gas from a storage tank at its Deer Park, Texas, refinery is now under control, with no reports by employees or local residents of health problems.

As a result, Deer Park has lifted the “shelter-in-place” alert for the surrounding community and reopened Highway 225 at Deer Park.

The cause of the incident is still under investigation, but there has been no effect on production at the joint venture, which is a 340,000 barrel-per-day refinery, according to a statement from Shell. read more

Bloomberg
 
TOKYO — Gazprom may invest in a 300 billion yen ($2.6 billion), 850-kilometer pipeline to transport natural gas from Sakhalin Island to northern Japan, the head of the Japanese project said.

Japan Pipeline Development Organization, based in the northern island of Hokkaido, is in talks with Gazprom, Russia’s natural gas monopoly, Chief Executive Hideo Ogawa said. The pipeline may link to Exxon Mobil’s Sakhalin-1 project or Royal Dutch Shell’s Sakhalin-2 venture, he said.

“We’re seeking Japanese investors for about half the funding,” he said. “For the other half we’re talking with Gazprom and several other U.S. and European companies.” read more

(Published 13 June 2006)

SHAN ROSS

A NORTH Sea oil platform where two workers died after being overcome in a massive gas leak has had two gas escapes in the past fortnight, it emerged last night.

The Health and Safety Executive is investigating the leaks on Shell’s Brent Bravo platform, 116 miles north-east of Lerwick.

Keith Moncrieff and Sean McCue died on the installation in September 2003 after being sent to inspect a pipe repair in the platform’s utility leg where there was a massive cloud of hydrocarbon gas leaking from a broken valve. read more

MARTIN FLANAGAN
CITY EDITOR

RUSSIAN gas monopoly Gazprom and British-Dutch oil giant Royal Dutch Shell are thinking about building a gas-to-liquids plant in western Siberia in a project potentially worth $8 billion (£4.3bn), Gazprom said yesterday.

“We are considering building a 12 billion cubic metre gas-to- liquids [GTL] plant in Nadym together with Shell,” Gazprom’s deputy chief executive, Alexander Ryazanov, told a news conference.

Shell confirmed it had entered into preliminary talks with Gazprom, but declined to put a potential value on the project. read more

By REUTERS
Published: June 20, 2006
Filed at 2:41 a.m. ET

DARWIN (Reuters) – U.S. oil major Chevron (CVX.N) said on Tuesday it still expected to secure environmental approval for its Gorgon gas project in the third quarter of 2006, despite concerns expressed by state authorities.

Chevron, which does not now expect to deliver first gas from Gorgon until after 2010, still expects to sign binding sales and equity agreements with Japanese customers before the end of 2006.

Western Australia state’s Environmental Protection Authority said earlier this month it would advise the state government to reject the proposed project off the state’s coast. read more

By a WALL STREET JOURNAL Staff Reporter
June 20, 2006

OAO Gazprom and Royal Dutch Shell PLC are thinking about building a gas-to-liquids plant in Western Siberia in a project potentially valued at $8 billion, Gazprom said.

The Russian gas monopoly is considering building a 12 billion-cubic-meter gas-to-liquids plant in Nadym with Shell, said Gazprom Deputy Chief Executive Alexander Ryazanov.

Shell confirmed it had entered talks with Gazprom, but it stressed that discussions were at an early stage and declined to put a potential value on the project. read more

By MATT CHAMBERS
June 20, 2006; Page B9

DARWIN, Australia — ConocoPhillips may spend as much as US$10 billion to nearly triple capacity at its Darwin liquefied natural gas plant, a senior official said.

The recently-finished Wickham Point plant, which gets gas from the Bayu-Undan field in the Timor Sea, can produce 3.5 million tons of liquefied natural gas a year but has environmental approval to increase that to 10 million tons if it can find the gas.

ConocoPhillips is looking to either the Greater Sunrise fields, in which it has a 30% share, or the newly discovered Caldita field, near Bayu-Undan, said Laura Sugg, president of the U.S. oil company’s Australian unit. read more

Tim Radford and Michael White, the Guardian, 20.06.95
By: TIM RADFORD AND MICHAEL WHITE
Published: Jun 19, 2006

In this weekly series, we look back through the Guardian’s reporting and contemporary photography at the events that changed the world

Greenpeace last night claimed its most sensational victory in 25 years of environmental campaigning, after the international petrol giant Shell was forced to abandon its decision to dump an oil rig in the Atlantic Ocean. After harassment at sea by helicopter-borne campaigners, condemnation by several governments, and the threat of a petrol station boycott that could have cut profits by pounds 5m a week, the two tugs towing the Brent Spar, Shell’s 66,000-ton rig, last night turned round 180 degrees en route from its North Sea field. read more

By Vanessa Houlder

Published: June 20 2006 03:00 | Last updated: June 20 2006 03:00

No company wants to risk a serious blow to its share price. So one of the main concerns for a big company considering moving its headquarters overseas is how to avoid the risk of falling out of the widely-tracked FTSE 100 index.

This issue shaped the decision of Royal Dutch Shell to opt for a parent company that was incorporated in the UK but had Dutch headquarters and tax residency when it embarked on its radical restructuring to create a single parent company in 2004. It informed shareholders: “The steering group was advised the use of a UK-incorporated entity should allow its shares to be in the FTSE All-Share and FTSE 100 indices.” read more

June 19, 2006 

Nigerian Government has embargoed further export of crude oil from the Shell operated 225,000 barrels per day output capacity Bonga crude oil and gas field over non-payment of royalty by the Anglo Dutch oil company.
 
A senior government official who was part of the government delegation to the just concluded Producer–Consumer Summit on LNG which took place in Washington  D.C., made the disclosure while speaking with Nigerian journalists in New York, USA, weekend.

The Bonga oil field is operated by the Shell Nigeria Exploration and Production Company (SNEPCO) Limited, a subsidiary of Shell Companies in Nigeria (SCiN). read more

June 19, 2006 

Nigerian Government has embargoed further export of crude oil from the Shell operated 225,000 barrels per day output capacity Bonga crude oil and gas field over non-payment of royalty by the Anglo Dutch oil company.
 
A senior government official who was part of the government delegation to the just concluded Producer–Consumer Summit on LNG which took place in Washington  D.C., made the disclosure while speaking with Nigerian journalists in New York, USA, weekend.

The Bonga oil field is operated by the Shell Nigeria Exploration and Production Company (SNEPCO) Limited, a subsidiary of Shell Companies in Nigeria (SCiN). read more

By Upstream staff

BILL Campbell developed a real passion for safety issues from an early age by learning the lessons from UK coal-mining disasters as to how best to protect workers against the ever-present threat of an industrial accident in a high-risk business, writes Christopher Hopson.

Today, as a seasoned technical professional, he can rightly boast at having spent over 40 years as a much sought-after safety expert with wide experience in both the UK mining and international oil and gas industries. “From a very early age I became interested in the behaviours of people who get themselves hurt,” he recalls. read more

By Upstream staff

SUSTAINED pressure on Shell’s directors finally paid dividends last year when Bill Campbell, by then an ex-employee but still a shareholder, finally managed to persuade the group to carry out an internal investigation into his audit claims, resulting in a meeting with company chief executive Jeroen Van der Veer, writes Christopher Hopson.

Campbell had in December 2004 written a letter to Malcolm Brinded, who by then had been promoted to Shell’s global head of exploration and production, outlining his concerns over the way Brinded, then oil director Chris Finlayson and the Brent managers had failed to act on his Platform Safety Management Review (PSMR) recommendations. read more

Goal-widening rather than goal-setting 

Questions over ‘corrupt and deeply flawed independent verification process’ but directors not seen as at fault by company if wrongdoing occurred

By Upstream staff

ABERDEEN-based Wood Group, the main Brent field contractor, also took stinging criticism from former Shell International group auditor Bill Campbell.

Wood Group managers onshore told the Platform Safety Management Review (PSMR) audit team they knew full well that Brent field maintenance reports had been falsified and they accepted the situation. read more

By Upstream staff

THE UK’s offshore safety watchdog, the Health&Safety Executive (HSE), is shown in Bill Campbell’s evidence to be a deeply entrenched and secretive body, writes Christopher Hopson.
He believes it has failed in its public duty to ensure proper verification of offshore safety systems, thereby increasing the risk levels on many of the UK’s ageing North Sea installations.

The implications from Campbell’s 1999 Platform Safety Management Review (PSMR) of Shell’s Northern Business Unit installations, and a Shell internal audit from November 2003, is that the current legislative regime has failed in its primary aim of reducing the risks to people working offshore. read more

Audit chief removed from review post after raising questions over management direction

By Upstream staff

SHELL failed to act on Bill Campbell’s central recommendation that its top three Brent managers should immediately be suspended from duty following his audit team’s devastating internal investigation revealing the negative safety culture across the field. Instead, UK chief Malcolm Brinded removed Campbell from his position as the lead role in the audit review team.

The conclusions of the hard-hitting Platform Safety Management Review (PSMR), seen by Upstream, will have made very uncomfortable reading for Brinded, then oil director Chris Finlayson and gas director Tom Botts, the three senior directors in charge of Shell Expro in late-1999. read more

Former company auditor makes claims of serious breaches in safety standards and falsified maintenance records on North Sea fields

By Upstream staff

SHELL is facing a major new top management scandal following startling disclosures of how it persistently ignored critical safety warnings on its UK flagship Brent field in the North Sea by running its four platforms “flat out” while allegedly violating operating procedures, falsifying maintenance records and corruptly failing to maintain safety critical equipment. read more

MOSCOW, June 19 (RIA Novosti) – Gazprom (RTS: GAZP) is considering creating a joint venture with Anglo-Dutch oil major Shell to build a natural-gas liquefaction plant in northwest Siberia, the deputy chairman of Gazprom’s managing committee said Monday.

Alexander Ryazanov said the plant in Nadym, in the Yamalo-Nenets Autonomous Area, would have capacity of around 12 billion cubic meters of gas per year.

The company needs to liquefy the gas because the falling pressure of the remaining gas at the local deposits means that it cannot be exported by Gazprom’s pipeline system, he said. read more

DARWIN, Australia, June 19 (Reuters) – Royal Dutch Shell Plc. (RDSa.L: Quote, Profile, Research) said on Monday it had agreed an option to farm into three deep-water exploration blocs in the gulf of Papua, offshore Papua New Guinea.

It marks a possible return to Papua New Guinea for Shell, which pulled out of its fuel retailing activities in the small Pacific nation in 2005. Under the agreement with Chinampa, a subsidiary of seismic data provider Fugro Multi Client Services, Shell has the option to take up 75 percent equity in some or all of the blocs, in exchange for funding exploration activities, the company said in a statement. The blocks cover total acreage of 45,000 square kilometres with an average water depth of 1,500 metres. Shell has agreed to fund seismic testing before deciding whether to buy into the blocs, after which it would fund one exploration well per bloc over a two-year period, and decide whether to become operator of the acreage. read more

By THE ASSOCIATED PRESS
Published: June 18, 2006
Filed at 11:36 p.m. ET

WASHINGTON (AP) — Americans paying $3 per gallon at the pump have it relatively cheap when compared with prices globally, say oil and gas company executives who defend their record profits as essential to maintaining supplies.

In parts of Europe and elsewhere in the West, gasoline prices are more like $5 per gallon to $7 per gallon, said the chairman of ConocoPhillips Co., James J. Mulva.

”This is a global business, and it’s not only that we need to add to supply, but we need to reduce demand,” Mulva said. ”In the United States alone, we have about 2 percent of world oil reserves, 5 percent of the population and yet we use about 25 percent of the world’s consumption of oil.” read more

By REUTERS
Published: June 18, 2006
Filed at 2:43 p.m. ET

WASHINGTON (Reuters) – Top executives at three big U.S. oil companies defended record profits on Sunday as necessary to finance future investment, and one cautioned that summer gasoline pump prices could go higher with hurricane season underway.

Some of the major oil companies, including Exxon Mobil Corp. (XOM.N), Chevron Corp. (CVX.N), ConocoPhillips (COP.N), collectively earned well over $100 billion in profits last year, sparking outrage among consumers and some lawmakers. read more

June 19, 2006

By Peter Klinger
 
DOMINION PETROLEUM is hoping to follow in the steps of Cairn Energy by drilling its way to a fortune in territory abandoned by Royal Dutch Shell.

The London-based company is hoping to raise $60 million (£32.5 million) in an initial public offering before a $338 million flotation on the Alternative Investment Market to help to fund an oil and gas exploration programme in Tanzania. 
 
Dominion’s focus is on an onshore area in the East African country where Shell had drilled previously for oil and gas. Shell’s hunt proved unsuccessful and the Anglo-Dutch group walked out of Tanzania. Dominion believes that up to $200 million-worth of exploration work had been carried out in the area, providing valuable data for the newcomer to focus future exploration efforts. It estimates that its three licences, covering ten million acres, contain possible reserves of 104 million barrels of oil and gas — before even drilling one well. read more

Multinationals know they must adapt to survive. Being seen to behave ethically is as important as making profits, reports Nick Mathiason

June 18, 2006

Oil giants foment gang warfare in developing countries; their negligence causes catastrophic environmental disasters. Ruthless mining firms stop at nothing to secure lucrative concessions, bribing officials and even toppling democratically elected governments.

Big Pharma obstructs access to vital life-saving medicines for the world’s poorest. Consumer titans douse their unhealthy wares with sugar and salt while simultaneously buying up burgeoning ethical brands to own and control the nascent competition. Rich world agribusinesses suck on the teat of state subsidies while demanding poor nations give them access to their markets. read more

By Neil Buckley and Arkady Ostrovsky

Published: June 19 2006 03:00 | Last updated: June 19 2006 03:00

Leaders of Russian industry, lined up under company banners to greet President Vladimir Putin in St Petersburg last week, looked like soldiers standing to attention for their commanding officer. Some had flown hundreds of miles for a place in the parade.

A month before world leaders fly into the city for the summit of the Group of Eight industrialised nations, the investment forum in Mr Putin’s home city was designed to showcase Russia’s economic resurgence. As top executives oozed a confidence born of $70-a-barrel oil and the economic recovery it has generated, the message was clear: Russia is back – and is aggressively eager to use its natural resources as tools to regain its influence in the world. read more

By Kevin Morrisonand Rebecca Bream in London

Published: June 19 2006 03:00 | Last updated: June 19 2006 03:00

Leading oil executives, including BP chief executive Lord Browne, have said there is plenty of oil refining capacity, in spite of market fears to the contrary.

Oil prices remain close to $70 a barrel even though oil inventories in the developed world rose to their highest level in more than 20 years in April, suggesting there is no shortage of oil.

Analysts said the high prices reflected the tightness in the production process of turning crude into finished products such as petrol, diesel and jet fuel. read more

Posted to the Web: Monday, June 19, 2006

The Shell Petroleum Development Company (SPDC) has drilled two additional gas wells in a bid to boost local supply of gas. The drilling project commenced in June  last year and was completed early this year, according to the latest edition of the Shell Bulletin, made available to the News Agency of Nigeria (NAN) in Lagos on  Thursday. Gas drilled from the wells, called “Utorogu-32” and“Utorogu-33” are supplied through the Nigerian Gas Company (NGC) for various local uses, including  generation of electricity. read more

TOKYO — Gazprom may invest in a 300 billion yen ($2.6 billion), 850-kilometer pipeline to transport natural gas from Sakhalin Island to northern Japan, the head of the Japanese project said.

Japan Pipeline Development Organization, a closely-held company based on the northern island of Hokkaido, is in talks with Gazprom, chief executive Hideo Ogawa said.

The pipeline may link to ExxonMobil’s Sakhalin-1 project or Royal Dutch Shell’s Sakhalin-2 venture, he said. (Bloomberg)

By THERESA BLACKWELL, Times Staff Writer

CLEARWATER – Shell Oil Co. probably will apply within a month for a federal permit to drill an exploratory well 53 miles west of Clearwater, an operation that will take up to three months and go down 18,000 feet into the floor of the Gulf of Mexico.

Robert L. Wilson, manager of safety and environmental conservation for Shell’s offshore division, outlined his company’s proposed drilling program to members of the Clearwater Rotary Club here Wednesday. read more

June 18 (Bloomberg) — Top oil executives at ConocoPhillips, Chevron Corp. and Royal Dutch Shell Plc defended the industry’s record profits amid high U.S. gasoline prices, saying the money is being used to produce more fuel to satisfy demand in the U.S.

“We have enormous capital investments to bring energy to the American people,” David O’Reilly, chief executive of San Ramon California-based Chevron Corp., said on NBC’s “Meet the Press” program, where he was joined by James Mulva, chief executive of Houston-based Conoco, and John Hofmeister, U.S. chairman of Hague-based Shell. “Last year we made $14 billion. This year we’re investing $15 billion back in growing energy supplies.” read more

By Alfred Donovan 

We have featured a number of news stories recently relating to the Shell Brent Bravo scandal. Shell has admitted responsibility for the tragic deaths of two oil workers, Keith Moncrieff, 45, and Sean McCue, 22, who died after being overcome with gas on the Brent Bravo platform in 2003. A record breaking £900,000 UK pounds fine (over $1.5 million USD), was imposed on Shell for breaches of Health & Safety regulations.