September 10th, 2006:

BP and Shell are both currently facing huge practical and reputation problems on major projects in remote locations: BP in Alaska and Shell in Sakhalin Island in Russia.

Apparently the naive Chief Executive of Royal Dutch Shell Plc, Mr Jeroen van der Veer, did not realise the signal he was sending out when he rolled over in submission earlier this year after President Hugo Chavez tightened his grip on Venezuela’s energy resources. Chavez followed through on his threats to punish international companies that resisted government control of the nation’s oil fields. Van der Veer threw in the corporate towel without putting up even a token defence. read more

Financial Mail on Sunday
By Tom McGhie
10 September 2006

SHELL is accusing Russia of using blackmail to seize control of the world’s biggest oil and gas project. It fears that its £6 billion investment in two 800-kilometre pipelines and a new liquefied natural gas plant on the Pacific island of Sakhalin is at risk.

Concerns were raised last week when Rosprirodnadzor, Russia’s environmental watchdog led by green maverick Oleg Mitvol, said it would try to have the project’s approval revoked. read more

AP , NEW YORK
Sunday, Sep 10, 2006

Oil prices fell by more than US$1 a barrel on Friday, dipping below US$67 as traders focused on slackening demand and rising supplies.

Crude futures have pulled back more than 15 percent from their all-time high in mid-July to levels not seen since early April. The Atlantic hurricane season so far has been tame and there is growing skepticism that the diplomatic standoff between the West and Iran will prompt OPEC’s No. 2 producer to pull supply off the market. read more

Oil companies have had a terrific run over the past three years. But few have done as well as Britain’s BG. Its stock has nearly tripled thanks to the steep rise in energy prices and persistent takeover speculation. But holding out for that bid could entail a very long wait.

To see the problem, look at the most obvious buyer – Shell. Both are big in liquefied natural gas. BG has good short-term production prospects, but needs to boost its longer-term reserves. Shell is the opposite: it has strong long-term prospects but needs to boost its short-term reserves. read more

Edited by Iain Dey
(Filed: 10/09/2006)

The FTSE100 stalled last week before it had a chance to breach the 6,000 barrier. Although economic news from Wall Street contributed to the market’s jitters, the psychologically important 6,000 mark was always going to prompt some reflection from investors.

Many strategists argue that the UK market is still cheap, with the FTSE100 as a whole trading on a historically low price to earnings ratio of about 13. But the cheapest UK stocks of all are some of the biggest.
 
With the market likely to struggle to find upwards momentum in the weeks ahead, now is a good time to look at blue chip stocks with strong dividends. Big companies seem to be the best buys in the market, even those whose reputations are having a rough ride. read more

By Sylvia Pfeifer
(Filed: 10/09/2006)

A 750-mile pipeline from Norway will start delivering gas to Britain this week in what will mark the first new significant supplies in decades.

The Langeled pipeline, the world’s longest submarine gas pipe, runs from an export terminal in western Norway to Easington on the East Yorkshire coast. The operators will start a 15-day commissioning period this week to test the flow of gas, with commercial operations due to start on 1 October. From next year, the supplies will include gas from the new Ormen Lange field off northern Norway, and once fully commissioned the pipeline will provide about a fifth of the UK’s peak gas demand.
 
The new flow of gas will also help ease fears about supply shortages this winter. Wholesale gas prices for the fourth quarter of this year have recently fallen slightly from their record highs as traders started to bet that more gas will flow this winter from Norway and Holland. read more

EXTRACT: When Shell’s fortunes plummeted two years ago following revelations that it had mis-stated the value of its reserves, BP was able to dine out as the company that people could trust.

THE ARTICLE

Richard Wachman
Sunday September 10, 2006

Has there has been systemic management failure at oil giant BP? The company, you may recall, faces a spate of regulatory and criminal investigations in the United States, where its conduct and safety record are under intense public scrutiny.

BP, as you would expect, is fighting its corner and rebuts such allegations. But the real news here is that politicians and investors are asking the question. Until two years ago, BP could boast of an almost unblemished record. read more