January 7th, 2007:

EXTRACT: …most analysts agree that the mergers of global super-majors are likely to return. Could Shell and BP, both baring the scars of their Russian adventures, be first? 

Its treatment of Shell was so aggressive that the £116bn company agreed to alter the Sakhalin-2 production-sharing agreement, signed with the Russian government a decade ago, to allow Gazprom a majority stake in the venture -into which Shell and its partners had already sunk more than $10bn.

THE ARTICLE

Gazprom, the Russian gas monopoly, began the new year with more sabre-rattling. But strong-arm tactics won’t always serve, says Oliver Morgan read more

EXTRACT: Making the economic situation even more critical is the fact that that the major Western oil companies are already having a big problem with reserve replacement that is going to get a lot worse in the years to come. Many have likely been fudging their books for years as Royal Dutch Shell was caught doing a few years ago.

THE ARTICLE

January 07, 2007

It has been obvious from the outset that the invasion of Iraq had a lot more to do with the geopolitics of oil than it did with any humanitarian concerns about Saddam Hussein’s regime. read more

By Charles Piller, Edmund Sanders and Robyn Dixon, Times Staff Writers
January 7, 2007

Ebocha, Nigeria — Justice Eta, 14 months old, held out his tiny thumb.

An ink spot certified that he had been immunized against polio and measles, thanks to a vaccination drive supported by the Bill & Melinda Gates Foundation.

But polio is not the only threat Justice faces. Almost since birth, he has had respiratory trouble. His neighbors call it “the cough.” People blame fumes and soot spewing from flames that tower 300 feet into the air over a nearby oil plant. It is owned by the Italian petroleum giant Eni, whose investors include the Bill & Melinda Gates Foundation. read more

*Tim Newman

Sunday 07 January 2007

From the article…

(06/01/2007  ShellNews.net: The Sakhalin II controversy continues )

What is not in dispute is that: –

Sakhalin II costs doubled to an admitted $20 billion, thereby ruining Shell’s reputation for competent project management.

Tim’s comment..

I put it to you that whereas the first part of the above sentence is not in dispute, the second part can hardly be claimed to be beyond dispute. Cast a poll across the industry tomorrow of which oil and gas OPCO enjoys the best reputation for competent project management and it’d be a fair bet Shell would be very close to the top. Despite the cost overruns and the other difficulties with the Sakhalin II project, it is not true to say that Shell’s reputation for competent project management is in ruins across the oil and gas industry. read more

Anglo-Dutch energy multinational Shell had experienced “a great deal of difficulty” with the way Russia’s Gazprom had negotiated over the Sakhalin 2 oil and gas concession in the Far East, Shell chairman Jeroen van der Veer said Sunday.

“Regarding the pressure on the environmental side, we had large difficulties. We made clear to the Russians that we did not agree,” Van der Veer told Dutch national public broadcaster NOS.

The talks were “among the most difficult I have participated in,” Van der Veer said. read more

EXTRACT: U.S. sanctions in place since the seizure of the American Embassy in Tehran in 1979 have prevented U.S.-based oil companies from operating in Iran, but companies such as Royal Dutch Shell, France’s Total and Italy’s Eni have invested, some heavily, despite on-again, off-again threats by Washington to pursue sanctions against foreign companies under U.S. laws.

THE ARTICLE

A campaign to dry up financing for projects poses a threat to Tehran’s ability to maintain exports, analysts say. read more

By Marianne Lavelle
Posted Sunday, January 7, 2007

Crude oil’s surge to more than $77 a barrel last summer, followed by a precipitous fall below $56 by November, produced a rude awakening for investors in the energy sector. Although oil rebounded to finish 2006 where it began-in the low 60s per barrel-the energy-heavy Goldman Sachs Commodity Index was down 15 percent after four straight years of huge gains.

So, mutual funds with direct exposure to commodity prices, often by tracking the Goldman Sachs index, had a rough 2006; the Oppenheimer Real Asset Fund (QRAAX), for example, was down 13 percent. But it was a different picture for many of those who put money into Big Oil stocks. Their fortunes are only partly tied to the price of oil and depend also on success in exploration operations and healthy margins in refining. read more

After 35 years, the third-largest reserves in the world are to be opened to American and British companies

By Danny Fortson
Published: 07 January 2007

For more than three decades, foreign oil companies wanting into Iraq have been like children pressed against the sweet shop window – desperately seeking to feast on the goodies but having no way of getting through the door.

That could soon change.

The Iraqi Council of Ministers is expected to approve, as early as today, a controversial new hydrocarbon law, heavily pushed by the US and UK governments, that will radically redraw the Iraqi oil industry and throw open the doors to the third-largest oil reserves in the world. It would allow the first large-scale operation of foreign oil companies in the country since the industry was nationalised in 1972. read more

Sunday, Jan. 7, 2007
Kyodo News

The Sakhalin taimen, a salmonid fish inhabiting Hokkaido and the Russian Far East and known as Ito in Japan, is facing extinction, a group of U.S. and Russian experts said Saturday. The group estimates the population of the fish in major habitats in Russia has decreased by 98 percent to 99 percent in the last three or four decades.

It warned the situation will deteriorate further due to the Sakhalin-2 oil and natural gas development project in Russia and dam construction projects as well as water contamination in Hokkaido. read more

Published: 07 January 2007

“The oil can is mightier than the sword,” said the 19th-century US Senator Everett Dirksen. Nowhere does this seem more true than in contemporary Iraq where, despite widespread despair about the war’s costs in terms of blood and treasure, US corporations look set to be some of the conflict’s few winners. The announcement that the Iraqi government is planning to change its constitution to allow foreign extraction of oil will give Western companies access to the world’s third largest oil reserves. Production sharing agreements (PSAs), lasting for up to 30 years, will divert up to 75 per cent of Iraqi oil revenues to Western drilling companies until their initial investment costs have been recouped. The importance of this cannot be overstated for a shattered country still reliant on oil for 95 per cent of its income. read more

Production may peak within a decade, causing massive withdrawal symptoms to the world and its economy
Published: 07 January 2007

Say what you like about Dick Cheney, but you can’t accuse him of not giving us fair warning. A year, almost to the day, before he was dubiously elected Vice-President of the United States – while still chairman of the energy giant Halliburton – he gave a riveting insight into the thinking that has since guided the administration’s oil policy.

In a speech to the Institute of Petroleum in November 1999 he shed light on our front-page revelation – that in the wake of the occupation of Iraq, Western companies are to be let loose on its vast, and previously state-owned, oil reserves. Perhaps even more importantly he flagged up an impending crisis that the world urgently needs to grasp – that supplies of oil may be about to shrink alarmingly. read more

The ‘IoS’ today reveals a draft for a new law that would give Western oil companies a massive share in the third largest reserves in the world. To the victors, the oil? That is how some experts view this unprecedented arrangement with a major Middle East oil producer that guarantees investors huge profits for the next 30 years

Published: 07 January 2007

So was this what the Iraq war was fought for, after all? As the number of US soldiers killed since the invasion rises past the 3,000 mark, and President George Bush gambles on sending in up to 30,000 more troops, The Independent on Sunday has learnt that the Iraqi government is about to push through a law giving Western oil companies the right to exploit the country’s massive oil reserves. read more

How the West will make a killing on Iraqi oil riches
By Danny Fortson, Andrew Murray-Watson and Tim Webb
Published: 07 January 2007

Iraq’s massive oil reserves, the third-largest in the world, are about to be thrown open for large-scale exploitation by Western oil companies under a controversial law which is expected to come before the Iraqi parliament within days.

The US government has been involved in drawing up the law, a draft of which has been seen by The Independent on Sunday. It would give big oil companies such as BP, Shell and Exxon 30-year contracts to extract Iraqi crude and allow the first large-scale operation of foreign oil interests in the country since the industry was nationalised in 1972. read more

The profits of BHP Billiton, BP and Royal Dutch Shell have soared

By Robert Watts
Last Updated: 12:09am GMT 07/01/2007

Britain’s biggest companies are enjoying an unprecedented earnings boom that has seen profits double in just four years.

New research, compiled by Thomson Financial, the data providers, estimates that companies in the FTSE100 generated profits after tax of £73.2bn last year, an increase of more than 100 per cent from 2003 levels. That figure could rise to £77.2bn this year. read more

Christopher Booker’s notebook
By Christopher Booker, Sunday Telegraph
Last Updated: 12:29am GMT 07/01/2007

The joy of that national institution Polly Toynbee, the Guardian columnist, is that she is so wrongheaded about everything that, if one is in two minds about any issue, one has only to consult her view to know that the opposite must be true.

Her latest outburst, headed “Nimbys can’t be allowed to put a block on wind farms”, rages against local councils that vote against the turbines we need to save the planet. Miss Toynbee clearly knows nothing about windpower, as she demonstrates by her claim that the 271 turbines Shell wants to build in the Thames estuary will “deliver 1,000 megawatts” of electricity, “enough to power a quarter of all London’s homes”. read more

EXTRACT: …most analysts agree that the mergers of global super-majors are likely to return. Could Shell and BP, both baring the scars of their Russian adventures, be first? 

Its treatment of Shell was so aggressive that the £116bn company agreed to alter the Sakhalin-2 production-sharing agreement, signed with the Russian government a decade ago, to allow Gazprom a majority stake in the venture -into which Shell and its partners had already sunk more than $10bn.

THE ARTICLE

Gazprom, the Russian gas monopoly, began the new year with more sabre-rattling. But strong-arm tactics won’t always serve, says Oliver Morgan read more

Last Updated: 12:09am GMT 07/01/2007Page 1 of 3

Iraq has the world’s second largest oil reserves but it is the minnows that are leading the way to unlock the war-torn country’s much-needed riches. Sylvia Pfeifer reports

New Year’s Day was like any ordinary day in Iraq: 15 bullet-riddled bodies were found behind a mosque in Baghdad, a roadside bomb exploded in the capital and the toll of US soldiers killed passed 3,000.
 
In the flurry of headlines and stories detailing the carnage, another development went almost unnoticed. A small Norwegian company announced that an exploration well in northern Iraq had produced several thousand barrels of oil. The company, DNO, is the first Western group drilling for oil in post-war Iraq under a deal struck two years ago with the Kurdistan regional authorities. read more