December 16th, 2006:

December 17, 2006
Dominic O’Connell
 
ROYAL DUTCH SHELL’s cherished plans to boost production by 2009 are at risk from the continued struggle for control of its Sakhalin field in Siberia.

Jeroen van der Veer, Shell’s chief executive, was in Moscow on Friday for another round of talks with Alexei Miller, his counterpart at Gazprom, the state-controlled gas group. 
 
Gazprom is expected to take a large, and possibly controlling, stake in the Sakhalin II field from Shell. The deal could be announced early next year, along with an agreement on how cost overruns on the project will be apportioned. Shell declined to comment beyond confirming “constructive” talks had taken place. read more

December 17, 2006

The Kremlin’s determination to seize control of the Sakhalin venture is bad news for foreign investors in Russia. Dominic O’Connell reports 
 
Anton Chekhov, the Russian playwright, knew all about Sakhalin. In 1890 he took a three-month trip to the Siberian island, then a Russian penal colony, and summed it up in one word: “Hell”.

By the end of last week, Jeroen van der Veer, chief executive of the Royal Dutch Shell oil group, probably shared his view. 
 
On Friday, Van der Veer flew to Moscow in an attempt to salvage his company’s interests in a $20 billion (£10.2 billion) oil and gas field on Sakhalin, a project vital to Shell’s future. read more

Last Updated: 12:17am GMT 17/12/2006

After the Kremlin humbled Shell into selling a stake in its £10bn Sakhalin project, Iain Dey ponders the fate of the UK’s other economic interests in Putin’s Russia

And how will Londonski cope with the Russian bearhug?

In the Latvian border town of Terehova, almost 700 trucks, stuffed with goods from the European Union, are queuing, waiting to get into Russia. Following a dispute with Poland over border controls, the Kremlin has decided to make life difficult for all those attempting to import EU goods into Russia. Delays are now commonplace, with some truckers reported to be waiting for days to cross through. Similar queues are building up at border controls on the river Narva, between Estonia and Russia, and at every other entry point into Russia from the Baltic states. read more

16 Dec 2006 16:02:08 GMT

LAGOS, Dec 16 (Reuters) – At least five people are still being held hostage by gunmen who seized an oil platform operated by Royal Dutch Shell in the Niger Delta, shutting its 12,000 barrel per day oil output, the company said on Saturday.

The invasion of the Nun River flow station state on Thursday was the second attack on Western oil interests in Bayelsa state after militants had tried to destroy a major export terminal and kidnapped four expatriates eight days earlier. read more

Saturday December 16, 2006

Royal Dutch Shell and Gazprom met for the second time in a week, a signal that they could be nearing a deal to allow the Russian gas monopoly to join the $22 billion (£11.3 billion) Sakhalin-2 project.

http://business.timesonline.co.uk/article/0,,9072-902468.html

Saturday December 16, 2006
Wednesday

The cost of the Royal Dutch Shell Sakhalin-2 gas project is close to $25 billion (£13 billion), $5 billion more than estimates, after harassment by the Russian Government.

http://www.timesonline.co.uk/article/0,,5-2507337.html

By Adrian Blomfield in Moscow
Last Updated: 1:41am GMT 16/12/2006

A Nationalist youth group with links to the Kremlin yesterday accused a senior British diplomat of assaulting one of its activists, the latest twist in a four-month campaign of harassment directed at Britain’s ambassador to Moscow.

The Nashi youth movement, created by one of President Vladimir Putin’s senior aides last year, claimed that the diplomat had delivered a “vicious” blow to activist Alexei Florya’s kidneys outside the Moscow offices of Royal Dutch Shell. read more

December 16, 2006; Page A11

Your Dec. 12 editorial “Shell Gets Poloniumed” aptly summarized Vladimir Putin’s mission to “put natural resources in the hands of his cronies” via nationalization, expropriation and other nefarious schemes. But at the same time the Russian bear “mauls” yet another foreign energy investor, adding another trophy to the list of former private sector energy enterprises within Russia now under the control of the state, Mr. Putin is preparing to extend the pernicious influence of government-owned Gazprom beyond Russia, to Western Europe, Asia, Latin America — and yes, to the U.S. Gazprom has established a subsidiary in Houston and has expressed its intention to purchase key U.S. gas infrastructural assets such as pipelines and re-gasification terminals with the stated goal of ultimately controlling 20% of the U.S. gas market. read more

Crude-oil futures climbed above $63 a barrel on the New York Mercantile Exchange, gaining more than 2% for the week, supported by OPEC’s plans to cut production, as well as fresh attacks on Nigeria’s oil industry.

Here is Friday’s roundup of oil and energy news:

* * *
VIOLENCE CONTINUES IN NIGERIA: Armed men who attacked a Royal Dutch Shell oil complex overnight in southern Nigeria fled, taking three hostages and forcing the oil giant to halt 12,000 barrels of production per day. Attacks have become common in the southern river delta of Africa’s largest crude producer, cutting the West African country’s usual daily output of 2.5 million barrels by about a quarter this year. read more