July 7th, 2006:

Jon Harding, Financial Post Canada
Published: Friday, July 07, 2006

CALGARY – Concerns about rising costs related to oilsands development in Alberta have been building for months, but a warning issued by Western Oil Sands Inc. is the first tangible evidence some projects and expansions might have trouble getting off the drawing board.

The partner in the joint-venture Athabasca Oil Sands Project (AOSP) said this week the cost to build a first expansion phase has soared 50% since last fall, when project operator Shell Canada Ltd. more than doubled an initial investment forecast to $7.3-billion. read more

Race to the world’s energy hotspots: Scramble for oil: Money no object as the big players grab what is left of a diminishing resource
By: TERRY MACALISTER, The Guardian – United Kingdom
Published: Jul 07, 2006

The decision by Sinopec of China to pay $1bn for the right to explore for oil in deep water off Angola has shocked the west, which fears it could be left behind in a global scramble for resources.

Similar oil prospects off the coast of the impoverished African country were selling for $35m (pounds 19m) less than a decade ago, when western oil giants such as BP and Shell had the field almost to themselves. read more

From Reuters

‘This is what my father lived and died for. He believed in Nigeria’

ABUJA, Nigeria (Reuters) — A decade after Ken Saro-Wiwa was hanged by Nigeria’s military junta over his struggle for the rights of the Ogoni people, his son says he is ready to take up his father’s legacy — in the heart of government.

Ken Saro-Wiwa, eldest son and namesake of the activist whose hanging in 1995 made Nigeria a pariah state, has just taken up a job as special assistant to President Olusegun Obasanjo on peace, conflict resolution and reconciliation. read more

So why doesn’t Rosneft just cut them out of the deal?

After all, the shares are also being offered to strategic investors — such as BP, Shell and oil companies from China and Malaysia — and domestic investors. There is already enough demand from these two groups to cover most of the $10 billion of stock on offer.

What’s more, strategic investors seem less fussed about the price. They aren’t looking at the deal through purely financial eyes. So why not ignore institutions and sell the lot to these investors at top whack? read more

From AP Worldstream
By: WILLIAM NSOYOH,
Published: Jul 07, 2006

YENAGOA, Nigeria _ Armed men have kidnapped a Dutch oil worker in Nigeria’s chaotic southern delta, police said, the second hostage-taking in less than a day in a region where regular raids continue to destabilize oil production.

Nigerian police said the assailants arrived Thursday at the Shell plant in speedboats and kidnapped a Dutch employee of Westminster Dredging, a contractor to Royal Dutch Shell PLC.

A Shell spokesman in Nigeria, Bisi Ojediran, confirmed that “an expatriate was abducted in a community incident” at Gbaran, outside the regional capital of Yenagoa. He said he didn’t have details of his nationality. read more

FROM THE WALL STREET JOURNAL

Strategic Investors
Would Bolster Deal;
Will Abramovich Buy?
By ALISTAIR MACDONALD in London and GREGORY L. WHITE in Moscow
Staff Reporters of THE WALL STREET JOURNAL
July 7, 2006; Page C2

The efforts by Russian oil company OAO Rosneft to enlist strategic investors in its coming initial public offering could extend to Russian tycoons such as billionaire Roman Abramovich, who is considering an investment in the hundreds of millions of dollars, according to two people familiar with the matter. read more

From The WALL STREET JOURNAL ONLINE
July 6, 2006 7:00 p.m.

Oil futures briefly swooned after the U.S. government reported an unexpected increase in gasoline inventories, but recovered most of their losses to settle at more than $75 a barrel, near their record high. Here is Thursday’s roundup of oil and energy news.

STILL WARY IN IRAQ: More than three years after the U.S.-led invasion, no big oil company has stepped forward to spend the huge sums necessary to tap Iraq’s giant oil reserves and get crude flowing and revenues pouring into Iraq’s government to help pay for food, jobs and medical care, the Associated Press reports. Legal uncertainty is a big hurdle, but security is still the biggest. read more

From The Financial Times
By Joanna Chung

Published: July 7 2006 03:00 | Last updated: July 7 2006 03:00

Sizeable orders from oil companies as strategic investors have helped Rosneft, the Russian oil group, attract enough demand to cover the minimum $8.5bn (£4.6bn) out of the total $10bn to $11.7bn it is seeking from its initial public offering.

A week away from its listing, China National Petroleum Corp and Petronas, the Malaysian state oil company, are thought to be the closest to taking stakes in Rosneft’s IPO. BP, Europe’s biggest energy group, is believed to be waiting for the other international strategic investors to emerge and further clarity on pricing before making a decision. read more

From The Financial Times
By Bernard Simon in Toronto

Published: July 7 2006 03:00 | Last updated: July 7 2006 03:00

Labour shortages and soaring equipment costs have raised a question mark over the future of one of northern Alberta’s biggest oilsands projects, controlled by Royal Dutch Shell.

Shell’s Canadian unit and Western Oil Sands, a minority partner, said they were reviewing the first phase of a planned C$13.5bn (US$12.1bn) expansion of their Athabasca oilsands project.

The review comes amid mounting concern about the cost of extracting and refining the bitumen-like oilsands. read more

The Vancouver Sun
James Stevenson, Canadian Press

Fears growing in wake of expected 50% cost increase at Shell oilsands plant 

CALGARY (CP) – Fears that cost pressures have spiralled out of control in the northern Alberta oilsands spooked investors Thursday in the wake of news that Shell Canada’s (TSX:SHC) Athabasca oilsands project could potentially pay upwards of $11 billion to generate an extra 100,000 barrels of oil a day.

Even in an industry that has seen its share of multibillion-dollar cost overruns to build megaprojects, word that Athabasca’s first major expansion could cost 50 per cent higher than the current $7.3 billion pricetag hit oilsands producers hard on the stock market. read more