December 15th, 2006:

Russia’s habitual abuse of its energy muscle is bad for its citizens, its neighbourhood and the world
 
FOR over a decade Royal Dutch Shell, along with its Japanese partners, Mitsui and Mitsubishi, has been struggling to coax oil and gas out of the frozen seas off Sakhalin Island, in Russia’s far east. Over the years the scheme has run into environmental protests, its projected cost has doubled to $20 billion and its completion date has receded. But it is now nearly finished. With oil and gas prices high and a flood of revenue imminent, it is an odd time for the three owners to reduce their shareholding. Yet that is exactly what they offered to do this week, by selling a majority stake in the project to Gazprom, Russia’s state-owned gas giant. read more

Royal Dutch Shell’s ordeal might chill the overall investment climate, or foreign investors may conclude that energy alone is the Kremlin’s special concern

By Jason Bush
Updated: 3:00 a.m. ET Dec. 15, 2006

Should foreign investors in Russia be worried? Certainly it’s a sign of concern that Anglo-Dutch giant Royal Dutch Shell (RDS.A) is on the verge of handing majority control of its $20 billion energy project in remote Sakhalin Island to Russia’s state-controlled gas behemoth Gazprom. A deal isn’t yet done but it looks like Gazprom will win after months of Russian government pressure on Shell, including the suspension of environmental permits for the project and the threat of criminal prosecutions and fines. read more

Fri Dec 15, 2006 11:27 AM ET
(Adds supervisory board clear 2007 budget)
By Tom Miles and Douglas Busvine

MOSCOW, Dec 15 (Reuters) – The heads of Royal Dutch Shell and Gazprom met for the second time in a week on Friday, a signal they could be nearing a deal to allow the Russian gas monopoly to join the $22 billion Sakhalin-2 project.

One source familiar with the matter said the talks may set out a “road map” to guide negotiations on a deal for Gazprom to acquire a stake in Sakhalin-2, the world’s largest liquefied natural gas project, that would be finalised in the New Year. read more

By Stephen Voss

Dec. 15 (Bloomberg) — Graveney was the site of the last combat on English soil when British forces battled a downed German bomber crew in 1940. Now the village is fighting a new enemy: the world’s biggest wind farm.

The local council, acting on behalf of the town’s 473 residents, refused to permit a substation for the $1.5 billion London Array, which would put 271 wind turbines in the estuary of the River Thames. Royal Dutch Shell Plc and E.ON AG plan to bring power cables ashore near Graveney. read more

Created: 15.12.2006 12:22 MSK (GMT +3), Updated: 12:22 MSK

Shares in Peter Hambro Mining bounced back by more than 12 percent in late Thursday trading, after Russian government officials indicated that the gold producer’s main mining licenses were not under threat.

The stock has fallen sharply over the last two weeks after Oleg Mitvol, deputy head of Russia’s environmental watchdog Rosprirodnadzor, said five of the company’s gold mining licenses should be revoked because of environmental violations. Rosprirodnadzor is currently inspecting all of PHM’s Russian gold mining projects. read more

Fri Dec 15, 2006 11:03am ET
 
MOSCOW, Dec 15 (Reuters) – The supervisory board of the Shell-led (RDSa.L: Quote, Profile , Research) Sakhalin-2 venture has approved the project’s 2007 budget of $1.17 billion — the Russian Energy Ministry said in a statement on Friday.

The supervisory board, which oversees the production sharing agreement which governs Sakhalin-2, also considered other issues including the overall budget for the project’s second phase, it said.

Shell and its Japanese partners Mitsui (8031.T: Quote, NEWS , Research) and Mitsubishi (8058.T: Quote, NEWS , Research) have infuriated Russian officials by boosting the second phase budget from $10 billion to $20 billion, in addition to the $2 billion first stage. read more

12.15.06, 8:14 AM ET
 
BRUSSELS (AFX) – The EU is worried about the difficulties faced by Royal Dutch Shell PLC over its Sakhalin-2 project in Russia, European Commission president Jose Manuel Barroso said following a two-day summit here.

Barroso told reporters that Dutch prime minister Jan Peter Balkenende raised the issue with him during the summit.

‘So it’s a matter of concern for us what’s happening now in Sakhalin,’ he said.

Barroso said he and Finnish prime minister Matti Vanhanen, whose country holds the rotating EU presidency, also expressed their concern during their talks with Russian president Vladimir Putin in Helsinki last month. read more

Update: 7:14 AM ET Dec 15, 2006

YENAGOA, Nigeria (AP) — Royal Dutch Shell PLC (RDSB) officials said Friday the company has shut down an occupied Nigerian oil facility, a move that will cut production by 12,000 barrels a day.

Earlier, armed men took control of the compound, and Shell officials said a nearby flowstation – a facility where oil pipelines converge – was shut as a precaution.

Joshua Benemesia, a local chief who has mediated hostage negotiations in Nigeria’s oil-rich delta region, said at least one man was shot in the attack. There were no immediate reports of deaths. read more

15:49 | 15/ 12/ 2006

MOSCOW. (RIA Novosti economic commentator Vasily Zubkov) – Easy come, easy go – this is perhaps the best description of what is happening to oil and gas giant Shell on the Russian island of Sakhalin.

The Russian environmental authorities are accusing the Anglo-Dutch company of violating their regulations. Foreign observers believe this is just an excuse to push Shell out of the key position in the Sakhalin oil project.

When Shell received the right to develop Sakhalin fields under a product-sharing agreement 12 years ago, the West welcomed the deal. read more

Fri Dec 15, 2006 6:40 AM ET
(Adds sources on “road map”, outlook for talks)
By Tom Miles and Douglas Busvine

MOSCOW, Dec 15 (Reuters) – Royal Dutch Shell CEO Jeroen van der Veer met Gazprom chief Alexei Miller on Friday in Moscow to discuss admitting the Russian gas monopoly to the Sakhalin-2 project, Gazprom said.

The heads of Shell’s two Japanese partners in the project — Mitsui’s <8031.T> Shoei Utsuda and Mitsubishi’s <8058.T> Yorihiko Kojima — were also in Moscow for talks, spokesmen for both companies said in Tokyo. read more

By: John Helmer
Posted: ’15-DEC-06 09:00′ GMT © Mineweb 1997-2006

MOSCOW (Mineweb.com) –There are three opponents of Russia’s strategy to become a global liquefied natural gas (LNG) exporter — the Western Gray Whale, the US Government, and Gazprom.

Until this week, and for quite different reasons, all three, including the LNG producer itself, Gazprom, — Russia’s energy champion, the world’s biggest energy exporter — have succeeded in delaying and redirecting plans to start shipments from the first of Russia’s LNG plants at Aniva Bay on Sakhalin Island, in the Fareast; and to postpone indefinitely drawing-board plans and joint venture agreements to build the second and third LNG plants on the Baltic, and to the north, on the Barents Sea. read more

Last Update: 6:59 AM ET Dec 15, 2006

MOSCOW (MarketWatch) — The chief executives of OAO Gazprom (GSPBEX.RS) and Royal Dutch Shell PLC (RDSB) met Friday in Moscow to discuss the Sakhalin-2 oil and gas project on Russia’s Pacific coast, the Russian gas monopoly said in a statement.

Gazprom said its CEO Alexei Miller and Shell CEO Jeroen van der Veer discussed Shell’s offer for Gazprom’s participation in the development, although it didn’t give any further details.

Both Gazprom and Shell declined to give any details of the meeting. read more

By WILLIAM NSOYOH Associated Press Writer
© 2006 The Associated Press
Dec. 15, 2006, 6:16AM

YENAGOA, Nigeria — Armed men who seized control of a Royal Dutch Shell PLC oil complex overnight fled Friday, taking three Nigerian hostages, shooting a man and forcing the oil giant to halt production at the site.

The attackers kidnapped a soldier, an administrative officer and a chef who works at a base that houses staff and stores equipment in Oporoma in the southern state of Bayelsa, said Joshua Benemesia, a traditional chief who has mediated hostage negotiations in the oil-rich delta region. read more

By EDMUND L. ANDREWS
Published: December 15, 2006

WASHINGTON, Dec. 14 — The Justice Department has begun two criminal investigations into the Interior Department’s Minerals Management Service, which is already the focus of several inquiries into its collection of royalties for oil and gas produced on federal property.

The new investigations are still in the early stages, said Congressional officials who were briefed this week by Earl E. Devaney, the Interior Department’s chief independent investigator. read more

· Russians hire British legal firm for Sakhalin case
· Kremlin ‘attack dog’ faces disciplinary action

Terry Macalister
Friday December 15, 2006

The British lawyer who represented Greenpeace in the battle with Shell over the disposal of the Brent Spar oil platform has been hired by Russia to prepare a case against the Anglo-Dutch oil company over problems at its development project on Sakhalin island off Siberia.

Mark Stephens, partner at Finer Stephens Innocent, said he expected court proceedings in spring although he would not say whether that would be in London, New York or Moscow. read more

By Russell Hotten
Last Updated: 12:32am GMT 15/12/2006

The natural resources minister in Russia has rejected a call to reprimand outspoken environmental regulator Oleg Mitvol, who has led a campaign against Royal Dutch Shell and other Western energy companies.

Sergei Sai, the head of state environment watchdog Rosprirodnadzor, had asked natural resources minister Yuri Trutnev, who oversees his agency, to review Mitvol’s work, citing “inefficiencies”. Trutnev rejected the appeal.

Rinat Gizatulin, spokesman for Mr Trutnev, said: “He said the effectiveness of Mitvol is higher than that of the Rosprirodnadzor leadership and advised Sai to do something about it.” read more

Fri Dec 15, 2006 2:02am ET

ABUJA, Dec 15 (Reuters) – Gunmen have invaded a Shell-operated oil facility in the Nun River area of Nigeria’s Bayelsa state and are holding several soldiers and oil workers hostage, security and industry sources said on Friday.

It was the second attack against the oil industry in Bayelsa in eight days, after militants tried to destroy a major oil export terminal and kidnapped four foreign oil workers last Thursday.

© Reuters 2006. All Rights Reserved.

The Associated Press
Published: 2006-12-15 01:30:13

YENAGOA, Nigeria: Armed men attacked a southern Nigerian oil installation owned by a subsidiary of Royal Dutch Shell PLC overnight, a local leader said Friday.

Joshua Benemesia, a local chief who has mediated hostage negotiations in the oil-rich delta region, said at least one man was shot in the attack.

There were no immediate reports of deaths or hostage-takings, he said. Benemesia did not provide details on how many attackers were involved or what type of oil facility was targeted. read more

25 December 2006

Four-fifths of the way toward completion of the $20 billion Sakhalin 2 oil and gas megaproject on an island off eastern Russia, Royal Dutch Shell (RD ) has offered to give up control to energy giant Gazprom, reported Reuters on Dec. 11.

Moscow has been nagging Shell about cost overruns and environmental disputes. Shell says nothing has been agreed on, but it’s clear Gazprom will end up with a big share. Compensation could come in cash and a share of Gazprom gas reserves in Siberia. read more

The last thing we need is another failed nation-state. Getting Russia into the World Trade Organization may be the best chance to keep its profoundly troubled economy from Armageddon.

By Jim Jubak

The death by polonium poisoning of an outspoken critic of the regime. The assassination of the corruption-fighting deputy chairman of the central bank. The culmination of a blackmail campaign that forces a Western oil company to turn over control of a Siberian energy field to the Kremlin’s candidate. read more