January 12th, 2007:

Following a recent spat with Belarus, other nations may fear the strong stance of the world’s second-largest oil exporter.

By Steve Hargreaves, CNNMoney.com staff writer
January 12 2007: 9:49 AM EST

NEW YORK (CNNMoney.com) — Russian oil is again flowing through Belarus, but the three-day shutdown has raised yet more concerns about how reliable the world’s second-largest oil exporter really is.

Indeed, while most of Russia’s oil goes to Europe, and its skirmishes have primarily been with its former satellite states, Russia’s aggressive behavior could create energy shortages that drive up prices for consumers everywhere.
 
While analysts say that Russia’s actions are unlikely to cause a major price spike, they also warn that instability in world oil markets is only going to increase as production continues to shift to more volatile areas of the globe. read more

Los Angeles oil giant Occidental Petroleum Corp. said Thursday, Jan. 11, it agreed to sell its 50% stake in the Vanyoganneft joint venture in western Siberia to Russian-British oil company OAOTNK-BP Holding for $485 million. Occidental expects to book a $400 million gain on the sale in the first quarter.

Some non-Russian companies have been pulling out of Russia because of a difficult political environment.

In late December, Royal Dutch Shell plc sold its majority stake in the $22 billion Sakhalin-2 oil and gas project to government-controlled OAOGazprom for $7.4 billion, which many considered a low price. — Claire Poole read more

January 2007

Russia has featured heavily in the news, following the death of former KGB agent Alexander Litvinenko. Speculation is raging over whether the assassination was ordered by president Vladimir Putin’s Kremlin, or by Chechen separatists.

Shell’s Sakhalin 2 project in the Russian far east has also been in the spotlight. In early December, Russia suspended 12 water-use licences. Coming only two months after environmental licences were revoked, this step was seen as a further move by the Russian authorities to pressure Shell into allowing much greater Russian ownership of the project. read more

Fri Jan 12, 2007 9:50 AM ET
By Tom Bergin

LONDON, Jan 12 (Reuters) – Green groups welcomed an international development bank’s decision not to invest in the Royal Dutch Shell Plc operated Sakhalin-2 oil and gas project, but said on Friday they will focus their pressure on commercial banks and government lenders considering loans.

The European Bank for Reconstruction and Development [EBRD.UL] said on Thursday it had ended discussions on the project, which is expected to cost over $20 billion, after Russian state-owned Gazprom agreed to become majority owner. read more

by Fiona McGarry
12 Januay 2007

Shell E&P Ireland has applied to the Department of the Marine for a foreshore licence to carry out investigation works as part of the process of finding a new route for the Corrib gas pipeline.

The company is seeking permission to occupy an area of the foreshore at Sruwaddacon Bay and the estuary beside Curraunboy. A spokesperson for the company said the application was part of the seven step process outlined last year for the selection of a modified pipeline route. The spokesperson said that to determine which routes would be “technical viable”, both land and marine examinations would be needed. read more

January 12, 2007

Oil major Exxon Mobil Corp is engaging in industry talks on possible US greenhouse gas emissions regulations, a move experts said could indicate a change in stance from the long-time foe of limits on heat-trapping gases.

Exxon, along with representatives from about 20 other companies, is participating in talks sponsored by Washington, DC nonprofit Resources for the Future. The think tank said it expected the talks would generate a report later this year with recommendations to legislators on how to regulate greenhouse emissions. read more

Friday, January 12, 2007

Club 20’s Oil Shale Task Force met earlier this week to hammer out a few policy recommendations on Western Slope oil shale development for ultimate debate and consideration by Club 20’s full board. And, per usual in any working group attempting to forge rough general consensus on a policy position, there were good ideas under discussion during Wednesday’s task force meeting while other policy suggestions were substantially less so.

The Club 20 task force made an eminently sensible decision by agreeing to support congressional legislation that would allow 75 percent of all federal oil shale research lease conversion fees to be returned to the state where the oil shale lease operations are located. read more

January 12, 2007

Proposed Long Island Sound facility taking heat from politicians, activists.
By Frank Eltman Of The Associated Press

It would be about as long as the Queen Mary 2 ocean liner and would supply enough natural gas to heat 4 million homes a year.

And it would be right in the middle of Long Island Sound, halfway between densely populated areas of New York and Connecticut.

EXTRACT: The debate received renewed attention this week as the Federal Energy Regulatory Commission began hearings on whether to allow Broadwater Energy — a consortium of Shell Oil Co., a Houston-based subsidiary of Royal Dutch Shell PLC, and TransCanada Pipelines Ltd. — to build the terminal about nine miles off Wading River, N.Y., and 10 miles south of New Haven, Conn. read more

By Beate Evensen

Jan. 12 (Bloomberg) — Royal Dutch Shell Plc, Europe’s largest oil company by market value, found no oil or gas in an exploration well at the Onyx West prospect off the coast of Norway, the country’s petroleum directorate said.

The wildcat well, the third in production license 255, was located about 50 kilometers (31 miles) west of the Draugen field in the Norwegian Sea, the directorate said in a statement on its Web site today. Shell has previously found natural gas 8 kilometers away at Onyx Southwest. read more

EXTRACT: There is increasing nervousness about western dependence on Russian oil, for so many different reasons. Last winter’s dispute with the Ukraine, the present difficulties over the Druzhba pipeline through Belarus, and the problems Shell faced with Sakhalin underline vulnerabilities. From a nation where there was an improving commercial climate, Russia is becoming one in which it is seen to be increasingly difficult to do business.

THE ARTICLE

Published: Jan 12, 2007

THERE is no shortage of energy in the world, said an eminent oil company chief executive not long ago the problem is that the energy is ‘increasingly discovered in difficult places’. Indeed it is the access to energy, as much as the oil and gas itself, which will increasingly occupy political and management minds. read more

12 January 2007

It’s getting worse and worse for Shell, the energy multinational that seems unable to put a foot right in Ireland.

Mired in relentless protest at the controversial Corrib gas site in Mayo, it now emerges that the group that bought out its Irish oil distribution business in 2005 has clawed back half its money by selling off a few filling stations.

Shell realised about 160 million on the sell-out but the acquirer, Topaz, reveals today that it has already taken in 80 million through shrewd leverage of the property assets in the filling station network. read more

EXTRACT: …to become increasingly reliant on Russian gas is like giving a known blackmailer your private bank account details. The Russian approach does not simply apply to the end user. Last month Shell was forced to relinquish its control of the $20bn Sakhalin project, the world’s largest liquefied natural gas development, to Gazprom. With astonishing cynicism, the Russian authorities gave as their reason Shell’s lack of concern for the local environment – it was astonishingly cynical not because Shell was innocent of that charge (it wasn’t), but because the Russian government could not care less about the wildlife of Sakhalin. read more

By Stefan Wagstyl in London
Published: January 12 2007 02:00 | Last updated: January 12 2007 02:00

The European Bank for Reconstruction and Development has abandoned work on a $300m loan for the controversial $20bn Sakhalin-2 energy project in Russia’s far east following the scheme’s de facto nationalisation by the Kremlin.

The multilateral bank announced yesterday it would no longer pursue the financing package it had been considering for the past five years after Gazprom, the Russian state-controlled gas group, acquired majority ownership from a consortium headed by Royal Dutch Shell. read more

By John Willman,Business Editor
Published: January 12 2007 02:00 | Last updated: January 12 2007 02:00

Business leaders from 17 of Britain’s largest companies have formed a taskforce to develop radical ideas on tackling climate change.

Chaired by Ben Verwaayen, BT chief executive, it brings together chairmen and chief executives from a range of companies in manufacturing and services.

The taskforce includes chief executives such as Tesco’s Sir Terry Leahy; Alan Wood, of Siemens UK; Sir John Rose, Rolls-Royce chief executive; and Clara Furse, of the London Stock Exchange. read more

EXTRACT: The Gates Foundation has invested $423m in some of the companies responsible for burning gas flares in the Niger Delta: Eni, Royal Dutch Shell, Exxon Mobil, Chevron and Total. It has also invested $39m in Anglo American and $295m in BP, who along with Shell are accused of air pollution at an oil refinery and a paper mill near Durban, South Africa.

THE ARTICLE

· Inquiry reveals funds held in firms blamed for illness
· Decision could influence policies of other charities

Sarah Boseley, health editor
Friday January 12, 2007 read more

EXTRACT: Western oil companies including Anglo-Dutch Royal Dutch Shell PLC and France’s Total SA have invested in Iran’s energy sector, but U.S. sanctions have stymied development of those projects.

THE ARTICLE

By SHAI OSTER
January 12, 2007; Page A4

BEIJING — China and the U.S. are at loggerheads over the widening American clampdown on Iran’s international business dealings, as Beijing told Washington not to interfere in a possible multibillion-dollar natural-gas deal between Iran and China’s biggest offshore oil company. read more

By HYUN YOUNG LEE
January 12, 2007

LONDON — Royal Dutch Shell PLC said it was considering selling off its French refining assets as part of an “ongoing strategic review” to streamline and concentrate its downstream assets.

The French assets could fetch a total of some $1.5 billion to more than $1.6 billion, analysts said.

Two people familiar with the matter said Russian oil company OAO Lukoil Holdings made an approach to Shell in early December about the French refining assets, which triggered Shell’s review. read more

In Brief
January 12, 2007; Page A4

The European Bank for Reconstruction and Development said it will no longer consider a loan to the Sakhalin-2 energy project in Russia, after Royal Dutch Shell PLC and its partners were forced to sell a 50% stake in the venture to OAO Gazprom, Russia’s state-owned natural-gas giant.

Since 2001, the EBRD had been considering a loan of about $300 million. EBRD President Jean Lemierre said the bank is prepared to discuss its participation with the new shareholders if certain conditions are met. read more

Rapid Plunge In Price of Oil
May Fuel Growth
Though Still Expensive

By MARK WHITEHOUSE, ANN DAVIS and BHUSHAN BAHREE
January 11, 2007 11:26 p.m.; Page A1

Oil prices fell sharply yesterday and are now hovering at their lowest levels since mid-2005, raising the prospect of significant changes in the outlook for corporate profits, consumer spending and the global economy.

Crude oil fell another $2.14, or 4%, to $51.88 a barrel yesterday on the New York Mercantile Exchange. The price has plunged 15% since the year began, and hasn’t closed as low since May 27, 2005. Oil is now down 33% from its record finish of $77.03 on July 14.
 
The slide, which market participants said was fueled in part by speculative hedge-fund trading and a retreat by other investors, helped send stocks higher as investors bet lower energy prices would fatten corporate profits and strengthen economic growth, particularly in the U.S., the world’s leading oil consumer. The Dow Jones Industrial Average jumped 72.82 points, or 0.59%, to a record close of 12514.98. (See related article). read more

Crude-oil futures finished a volatile session with the benchmark contract under $52 a barrel for the first time since May 2005. Tumbling natural-gas prices, as well as hefty oil-product levels, helped fuel the 4% oil-price decline.

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

CHINA’S THIRST GROWS: China imported 14.5% more crude oil last year than in 2005, and imports are likely to continue growing in the double-digits in 2007 as the country’s economy shows no sign of slowing down and more of its strategic petroleum-reserve tanks become ready for use. The data and expectations of continued demand growth add to the worries of global energy and security experts who believe China’s growing need for foreign oil to supplement stagnant domestic output is contributing to an unsustainable global energy future. read more