November 7th, 2006:

Wednesday, November 8, 2006. Issue 3535. Page 5.
Reuters

The Federal Service for Ecological, Technological and Atomic Inspection does not expect to clear the Sakhalin-1 project, led by ExxonMobil, for full-scale oil exports at least until December, an official said Tuesday.

The news represents at least a 15-day delay from the agency’s previous plan, announced at the end of September, and means the project will continue low-level shipments for another month or more despite healthy demand from Asian consumers. read more

THE WALL STREET JOURNAL ONLINE

Crude-oil futures tumbled more than $1 a barrel on the New York Mercantile Exchange, settling at less than $59, after Kuwait’s oil minister said the market is balanced and that there will not necessarily be output cuts at OPEC’s December meeting. Here’s Tuesday’s roundup of oil and energy news:

* * *
OIL-INDUSTRY INVESTMENT FLAT: The world oil industry has barely increased its investment in oil and natural-gas production during the past five years after accounting for inflation, according to a new study by the International Energy Agency, suggesting global energy prices are likely to face upward pressure in the years ahead. The news comes at a time when big oil companies are under political pressure to spend their record profits on investments to boost production — pressure that could intensify if Democrats take over Congress in today’s election. read more

By BHUSHAN BAHREE
November 7, 2006 2:58 p.m.

The world oil industry has barely increased its investment in oil and natural-gas production during the past five years after accounting for inflation, a new study finds, suggesting global energy prices are likely to face upward pressure in the years ahead.

Data compiled by the International Energy Agency show investment in the oil and gas industry rose 70% to $340 billion in 2005 from $200 billion in 2000. But cost inflation for goods and services used by the industry accounted for almost all of that increase, according to the Paris-based IEA, the energy watchdog made up of 26 of the world’s major industrial nations. Adjusted for inflation, the oil industry’s investment increased by 5% between 2000 and 2005, the IEA said. read more

By Jasmina Kelemen, MarketWatch
Last Update: 6:29 PM ET Nov 7, 2006

HOUSTON (MarketWatch) — Even as their coffers swell with cash, oil companies are warning that rising costs could crimp spending on major projects needed to meet the world’s ever-growing demand for energy.

Beginning with the price of steel going into a drill bit and continuing right up the value chain and into the labor pool, higher costs are dogging oil companies at every step. In some cases have nearly doubled anticipated expenses, prompting industry analysts to question whether many of the most ambitious projects will ever come to fruition. read more

The Associated Press
Published: November 7, 2006

MOSCOW: Russian gas monopoly Gazprom said Tuesday that it remains interested in joining a troubled multi-billion-dollar energy project led by Shell, but only if cost overruns and alleged ecological violations were resolved.

OAO Gazprom’s deputy chairman Alexander Medvedev told reporters that talks with Royal Dutch Shell PLC and two Japanese companies that are shareholders in the Sakhalin-2 project could resume only when they had completed their own negotiations with the Russian government. read more

10:30 AM CST Tuesday

John Hofmeister, U.S. country chair and president with Shell Oil Co., has been named 2006 International Executive of the Year by the Greater Houston Partnership.

Hofmeister will receive the award Nov. 8 at a luncheon at the Houston Club.

“We are pleased to present this award to John for his leadership among Houston’s international business community,” said Jeff Moseley, Partnership president and CEO. “Our strategic plan sets a goal that our region is recognized as one of the top four international trade regions in the United States in the next decade. Shell is a strong partner in helping us realize the goals of our strategic plan.” read more

Royal Dutch Shell Chief Financial Officer Peter Voser believes oil corporations have started to cut investments in Venezuela

MARÍA ELENA MATHEUS
SPECIAL REPORT FOR EL UNIVERSAL
Tuesday 7 November 2006

Washington.- Royal Dutch Shell Chief Financial Officer Peter Voser said “fiscal stability is vital for oil producer countries to attract the huge investment they need to develop and preserve crude oil and gas production.”

Following a presentation at the Woodrow Wilson Center in Washington last week, Voser told El Universal that “international oil companies have started to cut investment and production in Venezuela has started to drop.” read more

By Alfred Donovan

In June 2004 newspapers were speculating that Shell exec, Jeroen van der Veer, might end up being jailed in the USA. This was after he had signed a Form 20F Declaration filed with the US Securities & Exchange Commission, which contained fraudulent hydrocarbon reserves figures designed to fool the market.

http://shellnews.net/2004%20Documents/mailonsunday/mail_on_sunday6june.htm

It was only relatively recently that the US Justice Department decided against launching criminal proceedings against Van der Veer and former and current Shell directors. They decided that Shell shareholders had already suffered enough as a consequence of the huge fines imposed on Shell by the financial regulators in respect of the massive fraud. read more

Tuesday November 7, 10:26 PM

MOSCOW, Nov 7 (Reuters) – Russian-British oil firm TNK-BP, half owned by BP Plc , came under new attacks on Tuesday as prosecutors asked to withdraw its top Siberian gas licences, which previously belonged to gas monopoly Gazprom.

Prosecutors said in a statement the reason for the move was multiple ecological and licensing violations at the Novo-Urengoi and East-Urengoi fields, which belong to TNK-BP’s unit Rospan.

The fields, Rospan’s key assets, are located near West Siberian production sites operated by Gazprom and belonged to the gas monopoly before being spun off in the early 1990s. read more

07.11.2006, 17.44 
 
MOSCOW, November 7 (Itar-Tass) — Gazprom will resume negotiations on the accession to the Sakhalin-2 project with Shell, Mitsiu and Mitsubishi, Deputy CEO Alexander Medvedev said on Tuesday.

“We will resume the negotiations as soon as we clarify two things, namely larger expenditures, which will naturally have an effect on the economic aspect of the project, and environmental safety,” he said.

Gazprom started the negotiations back in 2004, yet the decision to double the expenditures became a stumbling stone. read more

19:20 | 07/ 11/ 2006 

MOSCOW, November 7 (RIA Novosti) – Gazprom is ready to join the Sakhalin II project, when cost disputes and environmental problems surrounding the vast Shell-led hydrocarbon project in Russia’s Far East are settled, a deputy board chairman of the state-controlled energy giant said Tuesday.

The multibillion-dollar liquefied natural gas project has come under attack from Russian authorities over environmental issues, and a cost estimate increase by the operator, which puts off the date on which the Russian government will receive its share of the profits. read more

SHELL IS TO BUY THE 22 PER CENT of tar sands oil producer Shell Canada that it does not already own for C$40 per share, or roughly C$7.7bn (£3.6bn). The tar sands sector is focused on the province of Alberta, where Shell Canada is producing 93,000 barrels of oil equivalent (boepd), and is set to increase this total to 330,000 boepd over the next decade.

But extracting bituminous oil trapped in sandstone is a high-cost process requiring great quantities of heated water and gas. In fact, the environmentalist lobby claim that more energy is expended producing a barrel of tar sands oil than is gained from its production. read more

For the first time in ages, Shell has pumped out a slicker performance than its rival BP. Has the oil giant’s tanker finally turned itself around, asks Daniel O’Sullivan?

Comment page 52: Oil & gas pages 52-53

CAN IT REALLY BE TRUE? The UK’s two oil majors have just updated investors on their latest progress, and Shell came out ahead of BP.

The company beat consensus forecasts in every part of its business. Production volumes of 3.25m barrels of oil equivalent per day (boepd) were up 1 per cent year-on-year, instead of a widely forecast decline. Revenues from active trading of liquefied natural gas (LNG) cargoes also beat expectations, while the refining division saw improved earnings despite lower actual refining margins. read more

By Daniel O’Sullivan
Oil & Gas 

A CHILL WIND IS blowing over supermajor oil companies working on large hydrocarbon projects in Russia under agreements struck in the 1990s. When these deals were signed, a weak Russian government desperately wanted to attract foreign investment into the sector. So the agreements typically granted the producing company a raft of fiscal privileges, including full cost recovery before any profit split with the state.

But while the natural resources ministry denies that it is seeking to abrogate agreements completely, widespread licence violations in terms of both environmental and developmental obligations are allowing it to put pressure on the companies in question. And the implication is that deals will be ‘rebalanced’ in favour of a now much stronger state.  read more

By Mary Davey
Tuesday 07 November 2006

What is going on in Mayo is so sad. Mayo is a beautiful and an ecologically distinct area in the west of Ireland. It is sacreligious that a company with an environmental record such as Shell’s should be allowed to set up shop there. Shell do not care about the people and the environment all they care about is extracting the black gold.

The reality is Gold has a negative intrinsic value in the current economic environment. This means that the damage that it is causing to the environment is greater than the economic benefit derived from extracting and consuming it. This is particularly evident when the cost of the clean up operations that it has to employ is factored into the the cost of carrying out the projects. This cost however is on the increase and it could cost the planet. read more

07/11/2006
12:22

Russia’s General Prosecutor’s Office thinks that the largest Russian oil and gas companies damage the environment, Russia’s First Deputy General Prosecutor Alexander Buksman said in his interview to Rossiyskaya Gazeta.

“There are a lot of violations. And they are made by not only small companies, but by such giants as Gazprom, Rosneft, LUKOIL, Sibneft, who carried out their operations without state ecological expertise,” said Mr. Buksman.

He also noted that “we would like bring to the notice of all heads of companies and enterprises, irrespective of patterns of ownership. They carry on their business in a civilized country. No one here is allowed to destroy nature with impunity. The law will be strict in making answer for this.” read more

The jurist says if another panel is needed, company must pick up bill

By BRAD HEM
Copyright 2006 Houston Chronicle
Nov. 7, 2006, 3:23AM

GALVESTON – A mailing from a BP manager to 900 members of the Texas City Chamber of Commerce could have influenced potential jurors in a civil trial it faces for the deadly 2005 explosion at its Texas City plant, the judge in the case said Monday.

State District Judge Susan Criss said in court she will compare a list of people who received the mailing, which she called “nonsense,” to those tapped for jury service and fine BP an amount at her discretion for any potential jurors who received it. read more

Tuesday, November 07, 2006
Dubai

Two new pipelines across the Gulf from Iran may be needed to meet rapidly growing gas demand in the Middle East, a Royal Dutch Shell executive said..

‘I could see a new trans-Gulf pipeline to Kuwait from Iran and another serving the UAE and Oman,’ said Martin Trachsel, Shell’s vice president for gas and power in the Middle East Gulf.

The pipelines would need to have capacity of 1 billion to 2.5 billion cubic feet per day of gas to meet expected shortfalls in supplies by 2015, Trachsel told journalists on the sidelines of an industry event in London. read more

 By John Donovan

As users will have noticed, Live Chat is being abused by the posting of links to commercial websites, most of them highly distasteful in nature. It may involve organised activity by an interested party wishing to torpedo this unique facility for Shell related free speech, by users who prefer to remain anonymous.

We could prevent this abuse by insisting that all Live Chat users register, but much prefer to leave it as it is for use by Shell whistleblowers and anyone else who has something positive or negative to say in relation to Shell, the owners of this website, or any related matters, without being obliged to disclose their identity. read more