January 3rd, 2007:

Gazprom Moscow Headquarters

Eurasia Daily Monitor – Washington,DC,USA: SHELL FORCED TO CAPITULATE TO PUTIN
By Vladimir Socor
Wednesday, January 3, 2007
Published by The JAMESTOWN FOUNDATION

A two-part deal — one publicized on December 21 and thereafter, the other confidential but leaked by Moscow on December 28 — has sealed Gazprom’s seizure of the majority stake in the Royal Dutch Shell-led oil and gas project Sakhalin-2. Shell, hitherto the project operator, surrendered under the threat of multibillion-dollar environmental-damage suits and revocation of licenses by the Kremlin-unleashed Nature Inspectorate, in a largely farcical campaign (see EDM, December 13, 15). read more

By David Marples
Wednesday, January 3, 2007
Eurasia Daily Monitor – Washington,DC,USA
Published by The JAMESTOWN FOUNDATION

Two minutes before midnight on December 31, Russia’s Gazprom and the Belarusian government signed a contract to supply Russian gas to Belarus for the next five years. Had the agreement not been signed, Gazprom had threatened to cut off gas supplies to its smaller neighbor, thereby threatening also the Yamal network that supplies about one-fifth of the gas exported by Russia to Western Europe. Gazprom provides about one-third of the latter’s gas imports, with Germany as the largest single consumer, followed by Italy, Turkey, and France. The European Union expressed its relief that the two sides had ended the protracted dispute. What is in question, however, is the impact on Belarusian consumers. read more

Wednesday 3rd January, 2007 (IANS)

India’s ONGC Mittal Energy Ltd (OMEL) may offer equity stakes to Royal Dutch Shell and France’s Total in the two offshore blocks it has in Nigeria once a product sharing contract (PSC) is signed, probably later this month, a top official said Wednesday.

‘Shell, Total and Exxon have expressed interest in taking equity stakes in the two offshore deepwater blocks we have got in Nigeria. We will discuss their offer after the production sharing contract has been signed, possibly later this month,’ ONGC Videsh managing director R.S. Butola told media here. read more

By Nidhi Verma

NEW DELHI (Reuters) – India expects soon to ink a deal to buy 2.5 million tonnes a year of liquefied natural gas (LNG) from Australia to secure energy supplies as Asian demand grows, government and company officials said on Wednesday.

The LNG will come from Australia’s Gorgon development, said A. Sengupta, finance director at Indian gas firm Petronet LNG Ltd. .

The company expects a deal by end-June after negotiations with the project’s joint venture partners Exxon Mobil Corp. , Chevron Corp. and Royal Dutch Shell. read more

By Ed Morrissey

The state-owned Russian energy corporation Gazprom succeeded in its quest to capture a half-interest in the pipeline through Belarus as well as getting the price hikes it wanted from the former Soviet republic. As Der Spiegel notes, this latest power play by Vladimir Putin puts Europe in a difficult position:

Natural resources juggernaut Gazprom has scored yet another victory in its gas pricing war, gaining 50 percent of the Belarusian pipeline network. The deal demonstrates Gazprom’s ruthlessness in securing power over neighboring former Soviet satellite states and raises questions about how reliable the Russian company is as an energy supplier to western Europe. read more

Last week’s announcement that Gale Norton will be joining Royal Dutch Shell, just nine months after stepping down as interior secretary, captures nicely the coziness that has characterized relations between the oil industry and the Bush administration.

Congress, under Republican control, has been only too happy to look the other way. But that is about to change with the new Democratic majorities, and some changes may come quite soon.

House Speaker-elect Nancy Pelosi has pledged to lay out a new renewable-fuels initiative in the first 100 hours of the new session, to be financed by revenue from the oil industry. Details of the funding mechanisms remain to be worked out, but the task should not be onerous: Oil companies are awash in windfalls that are unearned, undeserved, unwise and, in some cases, probably illegal. read more

By Jude Webber: Published: January 3 2007 02:00 | Last updated: January 3 2007 02:00

Summer has come to Argentina with a vengeance, bringing temperatures soaring above 40 degrees Celsius this week and placing an almost unbearable burden on the power system.

The national grid is groaning under the strain of soaring demand for price-capped electricity and as sticky residents in Buenos Aires flip on their air conditioning en masse, consumption has hit a new peak, surpassing last summer’s high and plunging parts of the capital into sporadic blackouts. read more

Federal investigators are looking at whether Interior Department officials played favorites or took money from companies vying for big oil and gas contracts.

The probe is the latest in a series of investigations into Interior’s handling of $10 billion a year in royalties paid by companies on the $60 billion in oil and gas they produce from leased public lands.

The latest investigations into Interior’s handling of oil royalties were reported Saturday by The New York Times, which cited unidentified officials speaking on condition of anonymity because the investigations were not yet made public. read more

By Richard Murphy

” … after her department was linked to disgraced lobbyist Jack Abramoff”

A few months after her resignation from the Bush administration when her department was linked to disgraced lobbyist Jack Abramoff , former US Interior Secretary Gayle Norton has taken a new job with Royal Dutch Shell.

Once held in contempt of court, Norton will serve as a key legal advisor to Shell’s operations on public lands in the western United States. Norton’s Interior Department routinely dealt with Shell on issues including drilling in environmentally sensitive areas. read more

Published: January 3, 2007

A year after Russia put the gas squeeze on Ukraine, it was Belarus’s turn. Unlike Ukraine, Belarus blinked two minutes before the Jan. 1 deadline and Russia had its booty: a 50 percent share of Belarus’s pipeline network and a more than doubling of the price Belarus will now pay for Russian gas.

There was no global outcry this time. President Aleksandr Lukashenko, the utterly Soviet boss of Belarus, has no friends in the West. But this latest squeeze is another warning that the Kremlin will let nothing — personal loyalty, contracts, the law — halt its drive to reimpose state control on Russia’s energy sector. It is also another reminder that the West, a big consumer of Russian energy, remains vulnerable to President Vladimir Putin’s whims. read more

EXTRACT: In June 2004, the leak of an internally commissioned Shell Nigeria report revealed the company’s direct contribution to corrupt practices and inter-community violence which has eroded what they call their ‘license to operate.’

http://www.shellnews.net/2004%20Documents/peaceandsecurity/peaceandsecurityinthenigerdeltawebpage.htm

THE ARTICLE

By MICHAEL WATTS

Ryzard Kapucinski, the great Polish journalist, once wrote that ‘oil is a fairy tale and like every fairy tale a bit of a lie’. The terrifying oil explosion that engulfed a Lagos neighborhood following Christmas Day–the current death toll is almost 300–says less about vandals who hot-tap the exposed pipelines running through the city’s abject slum world than the venality, waste and corruption of a Nigerian petro-capitalism fuelled by windfall profits and modernity’s addiction to the automobile. read more

EXTRACT: Gazprom will have to do without financial support from the European Bank for Reconstruction and Development after renationalising the giant Sakhalin-2 gas project at Royal Dutch Shell’s expense. The EBRD says its help is no longer needed.

THE ARTICLE

By Brian O’Connor

Consumers and businesses struggling to cope with sky-high fuel bills may be hoping for some respite in 2007.

But despite a relentless rise in the price of oil over the last four years, few experts can be confident that they will get any. read more

From Sherwood Park News (Canada)

Gas leaks lead to changes

by Conal MacMillan
Wednesday January 03, 2007

Shell has switched its emergency call-out system provider after the company had difficulties relaying messages to neighbours following two leaks at the Scotford upgrader last summer, according to a company spokesperson.

The company was upset with the ineffectiveness of the call-out to neighbouring residents in northern Strathcona County after a sour gas leak on Sept. 7, 2006, said Shell spokesperson Janet Annesley. Five days later the upgrader leaked more toxic sour gas – which smells like rotten eggs – and the system was put to use again. read more

By MARTIN LIVERMORE
January 3, 2007

Biofuels are touted by some people to play a key role in the decarbonization of the world’s economy. Others say they will cause environmental damage and even put our food security at risk. The truth, of course, lies somewhere in between, and time alone will tell who’s right.

What is undeniable is that there is a business opportunity here. So, not surprisingly, major energy companies such as Shell and BP are actively interested in biofuels. Volkswagen co-sponsors a project to make ethanol from agricultural waste in \*CityEurope\*, and Saab already markets cars that can run on 85% alcohol. DuPont and British Sugar are collaborating to produce a novel biofuel — butanol — by pooling their expertise in biotechnology and process engineering. read more

EXTRACT: European customers who want to know how they might be treated by a vertically integrated Gazprom might ask Royal Dutch Shell CEO Jeroen van der Veer; late last month he was all but forced to cede control of his Sakhalin-2 oil project to the Russian gas giant. Let the advocates of Kremlin capitalism answer this: Since when does “market” economics entail the forced sale of one firm’s assets to another, particularly when those assets weren’t for sale in the first place? read more

By BENOÎT FAUCON
January 3, 2007; Page A3

WARRI, Nigeria — Ten months after attacks shut down a key Niger Delta oil field, Royal Dutch Shell PLC still hasn’t figured out how to get the field running again.

Militants have sharply increased attacks on Nigeria’s oil industry in recent weeks, raiding oil facilities and kidnapping foreign workers. Last month, the U.S. State Department said violence in the Delta — the source of about 10% of the oil imported into the U.S. each year — was among the top security challenges U.S. businesses are likely to face in 2007. read more

Crude-oil futures edged below $61 a barrel in light electronic trading on the New York Mercantile Exchange.

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

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ONE SURGE COULD FOLLOW ANOTHER: A U.S. “troop surge” in Iraq could trigger a surge in oil prices, too, warns Bank of America chief market strategist of global wealth & investment management Joseph Quinlan, according to a Washington Wire report. Mr. Quinlan figures a troop surge could “push oil prices closer to $70 a barrel, in the near-term, knocking the wind out of the financial markets and global economy.” Then again, oil touched nearly $80 a barrel last year without having much apparent impact on financial markets or the economy. read more