October 27th, 2006:

By: ALEX NICHOLSON,
Published: Oct 27, 2006

Russian prosecutors said Friday they may launch a criminal case over alleged environmental violations at a giant Shell-led energy project as officials crank up the pressure at the troubled multibillion-dollar development.

“The Prosecutor General’s Office plans to inspect materials provided by the Natural Resource Ministry on ecological violations during the Sakhalin-2 project,” prosecution spokesman Konstantin Nikonov told The Associated Press. “If there are sufficient grounds after this inspection, a criminal case will be opened,” read more

By Hannah Gardner

Oct. 27 (Bloomberg) — Russian Natural Resources Minister Yury Trutnev earned the ruble equivalent of $7.9 million last year, the most of any cabinet member. Economy Minister German Gref earned the least, about $45,000.

Trutnev’s income is double what he made in 2004 and about 18 times the 12 million rubles ($448,000) declared by Transportation Minister Igor Levitin, the second biggest earner in the cabinet.

The incomes were published today in Rossiskaya Gazeta, the official government newspaper. No explanations are given in the annual income declarations of senior government officials. Prime Minster Mikhail Fradkov said he made 1.8 million rubles. read more

13:33 | 27/ 10/ 2006 

MOSCOW, October 27 (RIA Novosti) – The Prosecutor General’s Office may launch a criminal case against the Sakhalin II oil and gas project in Russia’s Far East once the Ministry of Natural Resources submits a report on the environmental damage caused by the project, a spokeswoman for the country’s top prosecution body said Friday.

Earlier this week, Russia’s Natural Resources Minister Yury Trutnev gave the country’s environmental watchdog another month to complete its inquiry into alleged violations in implementing the Sakhalin II energy project. He said the result of the inspection will be submitted to the Prosecutor General’s Office. read more

DEBORAH YEDLIN

CALGARY — On the off chance the top brass at Royal Dutch Shell are thinking about packing off the Shell Canada executive suite to Houston, they would be well advised to visit the oil patch archives to see how similar moves fared.

There is some speculation that, as a result of Royal Dutch’s $7.7-billion bid to buy the 22 per cent of Shell Canada it doesn’t already own, the next step will be to rationalize operations in one central North American location.

And because the firm’s presence in the United States is much more significant than in Canada, Houston is the most likely place to locate the decision making. read more

Oct 27, 2006

The Kremlin has called for managers in a Shell-led consortium developing the Sakhalin-2 oil and gas project in Russia’s far-east to face criminal charges for ”shamefully” damaging the environment.

The threat of managers being handed prison sentences of up to seven years came as the Natural Resources Ministry announced it was extending its environmental audit of the multi-billion-dollar project by one month.

Both moves pile pressure on Shell, which holds a 55 per cent stake in Sakhalin-2, to scale back its involvement in the project in favour of Russian energy giant Gazprom. read more

Oct 27, 2006
By Hal Weitzman in Lima

At two minutes past midnight tonight – 180 days since Bolivia’s government decreed the state was to take back control of its natural gas reserves – President Evo Morales hopes to announce the nationalisation has been completed.

It is far from clear that the deadline will be met. Things have not gone smoothly since May 1, when Mr Morales donned a hard hat and entered the San Alberto gas field in south-eastern Bolivia operated by Petrobras, the Brazilian state-owned energy company, to declare that he was honouring a campaign pledge to renationalise the sector. read more

Oct 26, 2006
Robert Lea

Royal Dutch Shell today joined its FTSE 100 arch-rival oil major BP in reporting a fall in profits in the third quarter of the year.

Shell admitted today that profits in its key exploration and production division plunged by 25 percent year-on-year, as group earnings in the three months to the end of September fell by 3 percent to $6.95 billion (GBP3.7 billion).

Despite the record oil price of $78 a barrel being reached during the quarter and continuing historically high prices, Shell blamed its poor performance on rising costs, the hangover from the 2005 hurricane season in production in the Gulf of Mexico, and shutdowns in Nigeria where the company’s operations have been hit by insurgents. read more

Oct 27, 2006

Madam, – Leo Corcoran and Brian Coyle (Opinion & Analysis, October 25th) essentially argue for an alternative site for the Corrib Gas Terminal (though they do not endorse the Shell to Sea campaign’s call for an offshore platform). Those of us here in Mayo who have witnessed the long, torturous planning process, which went to Bord Pleanala twice, would view such a developemnt with apprehension. And who is to say a new site would not attract the same problems that we now witness? read more

Oct 27, 2006

SAN RAMON, California (AFX) – Chevron Canada Ltd, a subsidiary of Chevron Corp, has elected to participate in the first phase of expansion of the Athabasca Oil Sands Project (AOSP) in Alberta.

This is a 100,000 barrels per day (bpd) — Chevron’s share is 20,000 bpd — expansion of oil sands mining and upgrading facilities and it is subject to final regulatory approvals.

AOSP consists of the Muskeg River Mine and the Scotford Upgrader located near Edmonton. The Corridor Pipeline links both facilities. Chevron owns 20 pct of the project. Shell Canada Ltd is operator and owns a 60 pct share and Western Oil Sands L.P. owns 20 pct. read more

Lloyds List; Oct 27, 2006
Martyn Wingrove

ROYAL Dutch Shell will be the first to produce oil from the ultra deepwaters of the US Gulf of Mexico after launching its Perdido project.

The Anglo-Dutch oil major, with partners Chevron and BP, plans to break the world’s water depth record by installing a spar drilling and production platform in around 8,000 ft of water by 2010.

Shell will develop the Great White, Tobago and Silvertip fields in the Alaminos Canyon area of the Gulf of Mexico using subsea wells tied back to the process and export hub. read more

By Ed Crooks in London and Sheila McNulty in Houston

Published: October 27 2006 03:00 | Last updated: October 27 2006 03:00

High oil and gas prices fuelled better-than-expected third quarter results at two of the world’s biggest publicly listed oil companies. ExxonMobil reported its largest profit yet and Royal Dutch Shell recorded a 33 per cent jump in earnings.

Exxon’s $10.5bn (£5.6bn) in net income – its second highest in headline terms – was a record excluding special items, up 26 per cent from $8.3bn a year earlier. Net income was $1.77 a share, up 12 per cent from $1.58. read more

By Ed Crooks, Energy Editor: Published: October 27 2006 03:00 | Last updated: October 27 2006 03:00

Royal Dutch Shell hopes to be able to resolve the disputes that are dogging the Sakhalin-2 gas and oil project off the far-east coast of Russia, Jeroen van der Veer, the company’s chief executive, said.

He was speaking as the company produced results well ahead of analysts’ expectations, with a 33 per cent underlying rise in earnings per share for the third quarter, in spite of production problems caused by insurgent attacks in Nigeria. read more

By Martin Simons: Published: October 27 2006 03:00 | Last updated: October 27 2006 03:00

From Mr Martin E. Simons.

Sir, John Plender’s article on US litigation against BP executive directors (“America’s litigation habit threatens to spread”, October 20) and Jon Moynihan’s letter (October 24) should be compulsory reading for Dutch, US and UK fund managers and private shareholders everywhere.

I raised the issue of Dutch and US pension funds suing Royal Dutch Shell directors about energy reserve misstatements at the company’s recent annual meeting where I suggested that shareholders should consider launching class actions against relevant US lawyers. Even better, BP and Shell should announce that if the plaintiffs were successful pro rata payments would be made to all shareholders. read more

By Ed Crooks: Published: October 27 2006 03:00 | Last updated: October 27 2006 03:00

There are two ways to look at the expenditures that will be required if the world is to make a serious attempt to curb global warming.

Pessimists see a huge cost: one that some think means it is not even worth trying to take on the challenge.

Optimists see perhaps the greatest business opportunity of the century.

As always in the analysis of climate change, there are enormous uncertainties, both about the science and the economics. But calculations set out in a report from Shell Springboard, Royal Dutch Shell’s environmental awards scheme for small and medium businesses, give some rough idea of the scale of both the challenge and the opportunity. read more

October 27, 2006

SHELL group is trying to bolster its position in the Browse Basin, north of Broome, which is expected to become an LNG hub next decade.

Nexus said yesterday that Shell would pay $US50 million ($65.5 million) for 34 per cent of the Echuca Shoals gasfield, next to Japanese group Inpex’s large Ichthys reservoir.

In January, Shell was awarded exploration rights to a block about 450km northwest of Broome, believed to contain part of the Ichthys reservoir.

Inpex, one of the biggest holders of undeveloped gas reserves in Australian waters, operates the Ichthys-Brewster field, which contains about 6trillion cubic feet of gas and 230 million barrels of condensate (light oil), according to the West Australian Government. read more

Mark Milner
Friday October 27, 2006

Shell took the City by surprise yesterday, posting better than expected underlying profits based on high oil prices and strong output figures.

Headline profits fell from $7.2bn in the third quarter of 2005 to $6.9bn (£3.7bn) this time but were well above the $5.7bn to $6bn analysts had forecast. Shell said that, stripping out the $1.7bn gain from asset sales last year, earnings a share were up 33% on a current cost of supply basis.

“This is a good performance by the group. Our earnings have proven resilient in the face of rising industry costs and weakening refining margins,” said Shell’s chief executive, Jeroen van der Veer. “Operating performance has been satisfactory, LNG [liquefied natural gas] growth has been impressive in the quarter and our upstream volumes have grown despite shut-downs in Nigeria.” read more

October 27, 2006
By Carl Mortished, International Business Editor
 
ROYAL Dutch Shell surged past BP to take the hotly contested title of Europe’s largest energy company as the Dutch firm announced a strong set of profits and rebuffed rumours that the company’s controversial Sakhalin-2 gas project was suffering from new budgeting problems.

Shell stock gained almost 4 per cent yesterday as its surprised the market with a 22 per cent gain in underlying profit to $6.9 billion (£3.65 million) in the third quarter, The profit boost, which confounded most City analysts, pushed Shell’s stock market value in London to £120 billion, slightly ahead of BP at £119 billion. 
 
Meanwhile, in Houston, Texas, ExxonMobil, the world’s largest oil company, surprised investors with a 7 per cent surge in oil and gas output to 4 million barrels per day in the third quarter, well ahead of an anticipated 5 per cent uplift. read more

By Saeed Shah
Published: 27 October 2006

Shell insisted yesterday that the Russian state should expect to heap revenues of up to $80bn (£44bn) from the giant Sakhalin-2 oil and gas project that the Kremlin has accused of breaching environmental rules.

The Anglo-Dutch oil giant said that it should recoup its costs by 2013, after which revenue payments to the Russian state would soar.

Shell is embroiled in a showdown with the Kremlin over the cost of the scheme, put by Shell at $20bn, which the authorities accuse the company of inflating. The Kremlin is concerned about the estimated cost – raised by Shell last year from $12bn to $20bn – because the big payments to the state do not kick in until the Sakhalin project has recouped its costs. Russia has also accused Shell of “criminal” violations of environmental standards at the project, located off the east coast. read more

October 27, 2006

Big Oil is at its peak. Investors in industry giants like Exxon Mobil, Royal Dutch Shell and BP have enjoyed a very good past few years as energy prices have climbed. But if the next few years are less rewarding, rising costs as much as lower oil prices will be to blame.

Look at Shell. Investors have raised their hats to the European energy giant, which just produced a stronger-than-expected rise in third-quarter earnings. Yet Shell’s underlying picture was more worrying. Margins thinned, as its cost of sales rose twice as fast as revenue, and Shell’s return on capital slipped from 26% in the second quarter to 23% in the just-ended quarter. read more

By JEFFREY BALL in Dallas and CHIP CUMMINS in London
October 27, 2006; Page A2

Several quarters into one of the flushest periods in the oil industry’s history, Exxon Mobil Corp. and Royal Dutch Shell PLC are showing signs the wild ride might be slowing and that they are settling in for a period of more-stable prices and results.

Exxon Mobil, of Irving, Texas, still reported third-quarter net income of $10.49 billion, up 5.7% from a year earlier and one of the largest quarterly profits for a U.S. company. But the average price at which Exxon sold a barrel of oil was $65.14, up 12% from a year earlier but nearly flat compared with the second quarter amid moderating oil prices this year. read more

THE WALL STREET JOURNAL ONLINE
October 26, 2006 4:56 p.m.

Crude-oil futures fell by more than $1 a barrel to nearly $60 on the New York Mercantile Exchange, as some traders locked in gains following a two-day rally on colder weather and a U.S. Department of Energy report of an unexpected drop in crude stockpiles. Here’s Thursday’s roundup of oil and energy news:

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EXXON’S WHOPPING PROFIT: Exxon Mobil reported its second-highest quarterly profit ever; and amid continuing political pressure on the oil industry, it said its fossil-fuel production rose 7%, a sign of what it called “active efforts to increase world energy supplies.” The world’s largest publicly traded oil company reported third-quarter net income of $10.49 billion, up 6% from a year ago and the second-best quarter ever for any publicly traded company. read more