August 8th, 2006:

By Carl Mortished and Tom Baldwin
 
FEARS that BP’s Prudhoe Bay production stoppage could extend for several months sent the stock market value of Britain’s largest company tumbling below Shell, its Dutch rival.

BP surged ahead of Shell when the reputation of the latter was damaged by the misreporting of its reserves in 2003. Shell’s valuation briefly topped BP last August when Royal Dutch Petroleum absorbed its British sister, Shell Transport & Trading, but since then BP has consistently maintained a lead over Shell as the second-largest oil company, after Exxon Mobil. read more

By Hamisah Hamid
[email protected]

August 9 2006

SHELL Malaysia has made the first delivery of natural gas from the E8 field off Sarawak coast.

The project delivered its first gas on schedule on July 24 three years after approval and after 5.5 million manhours.

Operated by Sarawak Shell Bhd, the E8 field is a key component of the E11 hub integrated gas project, one of Shell’s largest ongoing projects in the Asia Pacific region.

Under the hub integration project, gas production from surrounding fields is channelled to the Petronas liquefied natural gas (LNG) complex at Bintulu. read more

Tue Aug 8, 2006 1:24 PM ET

By Simon Webb

LONDON, Aug 8 (Reuters) – Britain is investigating allegations Royal Dutch Shell was slow to act on a report detailing corrosion at a North Sea platform, the health and safety watchdog said on Tuesday.

Shell was not able to make immediate comment.

A spokesman for the British government’s Health and Safety Executive told Reuters the inquiry involved Shell’s Brent Bravo platform, which has been operating since the mid 1970s.

“We started the investigation last week,” said Ian Whewell, head of the offshore Health and Safety Executive. read more

8 August 2006 / 20h39   
 
A spokesman for the U.K. Health and Safety Executive, the U.K.’s offshore safety regulator, agreed, noting that “with aging infrastructure there is never room to be complacent. … With weather conditions in the North Sea, there is always potential for catastrophic events.”

Some of the U.K.’s pipelines and offshore platforms date back to 1975, when the U.K. began to pump oil from the North Sea Forties field, roughly two years before the U.S. began pumping oil from Prudhoe Bay in Alaska.   
 
“Much of the infrastructure wasn’t intended to last as long as it has,” Ian Whewell, the head of HSE’s offshore safety division told Dow Jones Newswires.  read more

By Alfred Donovan

I am an avid reader of the postings on “Live Chat” and note the comments made today about “MMM” – this must refer to Mark Moody Stuart (now “Sir” Mark).

In view of the posted comments Shell insiders may be interested in the following extracts from leaflets we circulated at Shell HQ buildings in 1998. Judy Moody Stuart used to collect them on behalf of her husband and ended up writing to me with her comments. Lady Judy was so touched by my reply that she subsequently sent me a card at the start of one of our High Court actions against Shell wishing me well. I doubt that her husband shared her Christian good wishes. If anyone is interested, I will publish the correspondence. read more

A lawyer acting for victims of one of the biggest disasters in the history of the American oil industry alleges that budget cuts ordered by a British boss contributed to the explosion.

Brent Coon says BP head Lord Browne of Madingley has so far refused to give evidence, but his order to slash fixed operating costs around the world by 25% compromised safety at the Texas City plant.

In March 2005 a blast claimed the lives of 15 workers and injured hundreds more during maintenance work in an area which boosts the octane level of petrol. read more

Western banks join environmental protection campaigns

Natural Resources

The oil and gas industry suffers a relenting pressure of environmental organizations in many countries. Yet, the influence of oil companies sometimes helps them get through the loopholes in the ecological regulation. Working in Russia is easier for oil companies as environmental legislation is only at its dawn, while the state enforcement of ecological norms is virtually non-existent. Nonprofit organizations and western credit institutions are left to monitor the environment protection at oil fields. They sometimes succeed at getting companies operating in Russia pay more heed to the environment.
World Experience read more

Tue Aug 8, 2006

LONDON (Reuters) – BP Plc’s U.S. troubles have cost the oil giant its place as the world’s second-largest fully publicly-traded oil company, pushing it into the shadow of arch rival and industry laggard Royal Dutch Shell Plc.

London-based BP’s shares fell 1.2 percent to trade at 615-1/2 pence at 0834 GMT on Tuesday, adding to heavy losses on Monday after BP announced the shut-down of the U.S.’s largest oil field at Prudhoe Bay, Alaska, due to pipeline corrosion. read more

By Upstream staff

Shell and its partner Malaysia’s state-run Petronas, have pumped first gas from the E8 field off Sarawak, Malaysia.

E8 is part of Shell’s E11 hub integrated gas project and first gas from E8 marks a major milestone for the development.

Under the hub integration project, gas production from surrounding fields is channelled to the E11 complex for processing before being piped to Petronas’ liquefied natural gas complex at Bintulu.

One of five fields developed to ensure continued supply to the LNG Complex, E8 will make the E11 complex the biggest gas production facility in terms of volume in Sarawak waters. The other four fields are E11, F23, F6 and F13. read more

THE WALL STREET JOURNAL ONLINE
August 8, 2006 12:47 a.m.

Oil futures jumped to nearly $77 a barrel on the New York Mercantile Exchange, close to a new nominal record, after BP announced the shutdown of an important oilfield. Here’s Monday’s roundup of energy-related news:

* * *
AGING INFRASTRUCTURE: BP’s decision to shut down an Alaskan field sent that provides 8% of U.S. crude-oil production highlights the broader dangers of wear and tear facing the U.S.’s aging energy infrastructure. The vulnerability of U.S. pipelines, refineries and oil fields has become an ever-larger issue for the industry as energy demand and prices have risen sharply in recent years. Critics say the oil companies have underinvested in new production facilities, while older ones deteriorate as companies emphasize cost controls over maintenance. But industry executives have complained they have often been stymied in putting in more infrastructure by intense public opposition. read more

LIFO Leaves the Likes of Exxon
With Big Balance-Sheet Reserves
As Gas-Pump Prices Slam Drivers
By DAVID REILLY
August 8, 2006; Page C1

A string of record profits at Exxon Mobil Corp. has drawn howls from some politicians, but earnings at the world’s largest oil company are, by at least one measure, understated.

Like many U.S. oil companies, Exxon uses an accounting method to value its inventory that has the effect of raising the company’s costs when the price of oil is rising. Those higher costs lower net profit and trim Exxon’s tax bill. In 2005, for example, the accounting method lifted Exxon’s costs by $5.6 billion. If Exxon hadn’t used this approach, a back-of-the-envelope calculation shows its net profit could have neared $40 billion rather than the $36.1 billion it reported. read more

By REUTERS
Published: August 7, 2006
Filed at 8:59 a.m. ET

WASHINGTON (Reuters) – The U.S. Energy Department will consider loaning emergency crude oil to refiners caught short of supply following the shutdown of BP Plc (BP.L) massive Prudhoe Bay oil field in Alaska, a spokesman said Monday.

BP shut down the field, which can produce 400,000 barrels of oil per day, accounting for 8 percent of U.S. domestic crude production, after further corrosion problems were detected on oil pipelines there.

“This is a significant stream of supply, there is no question about it. That is why we have things like the Strategic Petroleum Reserve,” the spokesman said. read more

By Ambrose Evans-Pritchard

(Filed: 08/08/2006)

The price of crude soared to an all-time high of $78.54 a barrel in London after BP closed its Prudhoe Bay oil field in Alaska due to pipeline corrosion, cutting world supplies by 400,000 barrels a day.

The spike came amid warnings by Standard & Poor’s that crude could reach $250 if the Middle East crisis escalates, tipping the global economy into a deep recession.

The rating agency said the chief danger is a move by Iran to close the Straits of Hormuz – source of one fifth of the world’s oil needs. read more

EXTRACT: BP has faced a steady assault on its environmental and safety record. BP “whistleblowers” have pointed the finger at the company over what they perceive as shortcomings in its policies and performance. Alarm bells were ringing again five months ago when a BP worker discovered at least 267,000 gallons of oil had been spilled, the biggest on the North Slope so far.

THE ARTICLE

By Roland Gribben

(Filed: 08/08/2006)

Lord Browne and BP are wrestling with a full blown crisis that is threatening their reputation and credibility. The shutdown of the huge Prudhoe Bay field in Alaska means the US has lost 8pc of its oil supply and leaves business and consumers facing another rise in the cost of motoring and production. read more

Published: Aug 08, 2006

OIL companies have discovered several new deepwater oil and gas fields in the US Gulf of Mexico to keep the conveyor belt of developments flowing.

Italian oil major Eni and Canadian independent Nexen have found gas on the Ringo prospect in Mississippi Canyon block 546 in 750 m of water. Semi-submersible rig Transocean Amirante encountered 50 m of net gas pay in the well, which could be tied back to nearby infrastructure next year.

Calgary-based Nexen thinks Ringo could hold 60bn to 170bn cu ft of gas reserves and wants to confirm this with an appraisal well before going ahead with its development. read more

EXTRACT: BP was shouting at the top of its voice yesterday about how it is prioritising the environment in this sensitive area inside the Arctic Circle. But environmentalists say the evidence of corrosion simply proves what they have been saying all along: that BP’s Alaskan operations have an appalling environmental record that has only been exposed because of brave whistle-blowers inside the company.

By: STEPHEN FOLEY US BUSINESS CORRESPONDENT, The Independent – United Kingdom
Published: Aug 08, 2006 read more

By MIchael Peel, Legal Correspondent

Published: August 8 2006 03:00 | Last updated: August 8 2006 03:00

The Serious Fraud Office investigation into an alleged Nigerian bribery scandal involving a Halliburton subsidiary is the latest twist in a case that exemplifies the lucrative, murky and highly political world of western oil interests in Africa.

The affair has spawned investigations in four countries and has raised big questions about both the conduct of one of the US’s most high-profile companies and the seriousness of Britain’s anti-corruption credentials. read more

EXTRACT: Compare this to Shell in Nigeria. It is the dominant operator in the Niger Delta, where rebel saboteurs and kidnappers of oil workers have shut in over 500,000 barrels a day this year, more than Prudhoe produces. The Nigerian authorities may not require the same rigorous safety and environmental standards of Shell and other foreign operators (which have to compensate with rules of their own) as Alaska does of BP.

THE ARTICLE

Published: August 8 2006 03:00 | Last updated: August 8 2006 03:00 read more

By John Burton in Singapore
Published: August 8 2006 03:00 | Last updated: August 8 2006 03:00

Concerns about Malaysia’s dwindling oil reserves have been underscored by a recent decision by Petronas, the state energy group, to take a stake in Rosneft, the Russian oil producer.

The $1.1bn (€855m, £575m) deal to gain access to Russia’s oil fields comes after Petronas recently reported that domestic oil production last year had fallen by nearly 5 per cent to 700,000 barrels a day. Malaysia is south-east Asia’s largest oil producer after Indonesia. read more

Published: August 8 2006 03:00 | Last updated: August 8 2006 03:00

*The bribery allegations centre on the construction of the Nigeria LNG natural gas liquefaction plant. The plant is 49 per cent owned by the Nigerian government, 25.6 per cent by Royal Dutch/Shell, 15 per cent by Total of France and 10.4 per cent by Italy’s Eni

*The SFO investigation comes after the launch of investigations by a French magistrate, the US Department of Justice and Nigeria’s Economic and Financial Crimes Commission read more