October 22nd, 2006:

Last Update: 6:55 PM ET Oct 22, 2006

LONDON (MarketWatch) — A Royal Dutch Shell PLC (RDSB.LN) Siberian joint-venture is seeking a settlement in court after disputing the conclusions of a recent tax inspection, a spokeswoman for the Anglo-Dutch giant said Saturday.

The dispute is the latest woe for Shell in Russia after authorities threatened to cancel a key environmental permit for another Shell joint-venture, Sakhalin Energy Investment Co. Ltd.

The spokeswoman, Alexandra Wright, said a branch of Salym Petroleum Development, or SPD, which is half owned by Shell and the other by Sibir Energy PLC (SBE.LN), “has recently undergone a routine tax inspection covering the year 2004.” read more

By John Donovan

Sakhalin II: A potential environmental calamity?

Subject to legal injunction, candid e-mails between Hans Bouman, a natural-gas field manager, and Engel van Spronsen, in his then capacity as Sakhalin Energy’s technical director, will be published here on Monday 23 October 2006. Both gentleman are now retired.

Some months ago we became aware from Shell insiders of a treasure trove of “Hans” Bouman” emails which have been widely circulated as collector items by Shell insiders because of their outspoken, prophetic and eloquent content.   read more

Monday, October 23, 2006. Issue 3524. Page 7.

Authorities are investigating tax payments of a venture half-owned by Royal Dutch Shell, the oil firm said Friday, adding to the pressure it is facing in its Sakhalin-2 project.

Shell’s Salym Petroleum Development, or SPD, joint venture with Sibir Energy said it had received a back tax claim that it was disputing.

“Tax authorities conducted a planned tax check at the SPD branch in Nefteyugansk in the summer. They discovered some violations for 2002 to 2004. We do not agree with the claims and have filed a suit with the Nefteyugansk arbitration court,” said Yelena Zakupneva, external affairs manager at SPD. read more

By Odudu Okpongete, Senior Correspondent, Port Harcourt

The Ogoni umbrella socio-cultural group, Movement for the Survival of the Ogoni People (MOSOP), Monday, accused the federal authorities and Shell Petroleum Development Company (SPDC) of killing the Ogoni dialogue process and described the reconciliation efforts as dead.
 
The body, therefore, wants the Federal Government to act fast in getting a fresh operator for the abandoned oil field in the area.
 
MOSOP’s Information Officer, Bari-ara Kpalap, said in a statement that the body was delighted by recent announcements by government that it would revoke Shell’s licence in Ogoni, lamenting that 12 years after being evicted from Ogoni there was no evidence from the past 12 months of the radical change needed in the company.
 
“We believe it has reached the point where a fresh start with an oil operator of unimpeachable integrity is required in Ogoni,” MOSOP argued, adding that a successful transition to a principled relationship with the people and the environment would set vital precedence in the Niger Delta.
 
The Ogoni socio-cultural organisation disclosed that no dialogue had taken place in the last four months since the reconciliation process was initiated and that there was no explanation from the facilitator, Rev Fr Mathew Hassan Kukah, on why the dialogue had not taken place.  read more

Oct 22 (Reuters) – Seven foreign oil workers who were being held hostage in Nigeria’s southern Niger Delta have been released and are in good health, police said at the weekend.

Following is a chronology of some major attacks on the Nigerian oil industry in the last six months.

— May 10 – A U.S. oil executive employed by Baker Hughes is killed in Port Harcourt.

— May 11 – An Italian is among three kidnapped workers, employees of Italian oil contractor Saipem. They are freed on May 12. read more

10.22.2006, 11:40 AM

LONDON (AFX) – Costs on the politically sensitive Royal Dutch Shell-led Sakhalin-2 gas project in Russia could rise to 28 bln usd, the Observer reported citing a leaked Russian government report.

The report by the mineral services division of the Russian Ministry of Natural Resources states that operational costs will rise from a predicted 15 bln usd in 2003 to 28 bln usd.

The Observer also reported, citing unnamed Russian sources, that a deal could be struck soon to give Russian state energy firm Gazprom a stake of about 25 pct in the Sakhalin project’s Liquefied Natural Gas (LNG) plant which intended to supply gas to eastern Asia and America. read more

By Torrey Clark

Oct. 22 (Bloomberg) — Russia and Royal Dutch Shell Plc should be able to settle budget and environmental disputes that threaten to halt work on Sakhalin-2, the nation’s largest foreign-owned oil and gas project, President Vladimir Putin said.

“We need to sit at the table and come to an agreement,” Putin said at a press conference Oct. 20 in Lahti, Finland. “I’m sure we’ll find a resolution,” he said.

Russian officials cited environmental and safety concerns last month when they threatened to annul a key permit for the project, possibly halting construction. Shell doubled its cost estimate for the project to $22 billion last year and stalled talks to give Russia’s state-controlled OAO Gazprom a 25 percent stake. read more

October 22, 2006
Siobhan Maguire
 
A PRIMARY school in Mayo, whose principal is a leading anti-Shell protestor, needed 150 substitute-teacher days in the last school year — more than double the national average.

Inver National School near Belmullet used eight substitute teachers to cover more than two-thirds of the 183-day school year from September 2005 until June. 
 
School principal Maura Harrington, is on sick leave after sustaining head and neck injuries during an anti-Shell demonstration 10 days ago. Harrington clashed with a garda at the Shell gas terminal in Bellanaboy. read more

Oil worker and six others are safe, family is told, a day after reports said he was not coming home

Lorna Martin, Scotland editor
Sunday October 22, 2006

The wife of a Scottish oil worker feared dead after being kidnapped by Nigerian militants last night said she was ‘ecstatic’ after learning he was still alive and had been released.

Father-of-two Paul Smith from Peterhead in Aberdeenshire was one of seven workers freed yesterday nearly three weeks after being snatched at gunpoint. Reports in Saturday newspapers said the 30-year-old had died on Thursday morning. Some said he had succumbed to natural causes or malaria, while others said he had been shot. read more

Leaked Russian document claims final bill for troubled joint gas project could be $28bn

Nick Mathiason and Heather Connon
Sunday October 22, 2006

Costs on Sakhalin-2, one of Royal Dutch Shell’s most treasured yet politically fraught gas projects, are rocketing, says an internal report by the Russian government leaked to The Observer.

The news will anger the Kremlin because it could in theory mean it receives less revenue under the production-sharing agreement it signed with Shell a decade ago. read more