January 18th, 2007:

Friday, January 19, 2007. Issue 3578. Page 8.
By Robert Skidelsky
 
Russia’s temporary halt to oil supplies through the pipeline crossing Belarus earlier this month was the latest in a sequence of public relations disasters for the Kremlin. The West’s romance with President Vladimir Putin’s Russia ended with the Yukos affair and since then Russia has generally gotten bad press, even when it had a good case. The Sakhalin-2 affair is a good example.

Early in December, Royal Dutch Shell announced that it had sold Gazprom a majority stake in the project to develop the Sakhalin gas field. In its Dec. 8 edition, The Economist magazine accused the Russian state of using “minor environmental infringements” to force Shell and its partners to sell out to Gazprom at the moment when they stood ready to receive a “flood of revenues.” Such “loutish” behavior was incompatible with Russia’s claim to be a reliable energy partner. The Russian case for action, based on the impact of Shell’s cost overruns on the expected revenue of the Russian state, was simply ignored. read more

Jan. 18, 2007

Russia’s Federal Service for Supervising Natural Resources (Rosprirodnadzor) launched yesterday the probe into the execution of license agreement for development of Kovykta field, which is under TNK-BP’s control.

Yesterday, Russia’s Federal Service for Supervising Natural Resources (Rosprirodnadzor) committed its Irkutsk branch to initiate the check of Kovykta field, completing it by January 26, a source with Rosprirodnadzor said on condition of anonymity. The probe was ordered by the Federal Agency for Subsoil Use (Rosnedra). In TNK-BP, they said they have received no respective notification yet. The Federal Agency for Subsoil Use declined to comment officially. read more

EXTRACT: “The world’s multinational energy companies are feeling the effects of nationalism, “said Bryan Squibb, Aon U.S. Trade Credit national managing director. “Oil – producing countries are seizing local resources that were once owned by or shared with international oil companies.”

“This could be a blanket country action, such as Bolivia’s outright nationalization of the oil & gas industry in May 2006, or more targeted action, possibly through arbitrarily imposed regulations and interference against individual projects, such as Russia’s recent moves against Sakhalin II or BP’s TNK-BP. read more

EXTRACT: …in the meantime a big oil terminal on the southern end of Russia’s Sakhalin Island could open this year, resulting in a spike in eastward oil tanker travel along the route. And the Bush administration’s decision on January 9th to lift a moratorium on oil drilling in nearby Bristol Bay, where Shell hopes to develop natural gas resources, could further increase Aleutian traffic. Expect more wrecks.

THE ARTICLE

The North Pacific great circle route

Jan 18th 2007 | DUTCH HARBOR
From The Economist print edition read more

Eric Watkins
Senior Correspondent

LOS ANGELES, Jan. 18 — The World Wildlife Fund (WWF) has urged international lending institutions to follow the lead of the European Bank for Reconstruction & Development and not provide loans for the Sakhalin-2 project due to environmental concerns.

“The WWF and other international organizations have appealed to potential Sakhalin-2 sponsors to adopt the correct environmental position and follow the example of the European Bank for Reconstruction & Development, which refused to provide the project with $300 million in financing on Jan. 11,” WWF said in a statement. read more

Jan 18th 2007
From The Economist print edition

The British oil firm is in trouble. But its rivals face many of the same problems

NO ONE calls upon James Baker, an American elder statesman, to solve a trivial problem. George Bush recruited him to defend his interests in Florida during the disputed election of 2000, and more recently to examine ways out of America’s morass in Iraq. The United Nations once asked him to settle a 30-year-old conflict in Africa. So it says a lot about the state of BP, a big British oil firm, that it asked Mr Baker to head a panel to assess flaws in its safety regime. read more

Alberta needs at least three, utility says
SHAUN POLCZER CALGARYHERALD

At least three new pipelines will be needed to move Alberta’s growing oilsands production to new markets in the United States and overseas, a senior official with Enbridge Inc. said Wednesday.

Those are on top of a 400,000barrel per day (bpd) link to the U.S. Gulf Coast and a proposed 300,000 bpd hook-up to Kitimat, B.C., said Rick Sandahl, Enbridge’s senior vice-president of market development.

“There’s a need for significant infrastructure changes going forward,” he told a Calgary oilsands conference. read more

Posted on : Thu, 18 Jan 2007 16:27:59 GMT | Author : Energy News Editor
 
MOSCOW, Jan. 18 Russian regulators said Thursday they will inspect Sakhalin-1 in late February or March to see if Exxon Neftegaz Ltd. Co. is complying with environmental law.

The inspection was scheduled to be carried out last October, but was postponed because of the multitude of problems with Sakhalin-2 and a shortage of specialists, Oleg Mitvol, deputy head of Rosprirodnadzor, told ITAR-TASS news agency. We will start it depending on weather conditions, he said. ENL operates the Sakhalin-1 project, which is expected to produce 12.5 million tons of oil annually for 40 years. The project includes SODECO, ONGC Videsh, Sakhalinmorneftegaz and RN Astra.
 
The oil and natural gas will … be piped to the Russian mainland to the export terminal of DeKastri, the U.S. Energy Information Administration says. “Planned exports of oil to world markets, with the assistance of ice-breaking vessels, is scheduled for 2006. Sakhalin I’s natural gas is expected to be sent southward to Japan via a proposed pipeline. The partners are planning for natural gas exports to Japan to begin in 2008.The project is the largest foreign investment in Russia and capital investment over the life of the project could reach $12 billion. read more

EXTRACT: The move by Rosprirodnadzor suggests that Kovykta’s fate could mirror that of Shell’s $22 billion (euro17 billion) project on Sakhalin island, off Russia’s Pacific coast. After a barrage of environmental probes led by Mitvol, Shell and its Japanese partners agreed in December to sell a controlling stake to Gazprom.

The Associated Press January 18, 2007, 10:50AM EST

MOSCOW: Russia’s environmental watchdog agency is preparing to probe a giant natural gas field owned by BP PLC’s Russian joint venture, a top agency official said Thursday. read more

By Kelpie Wilson
t r u t h o u t | Environmental Editor

Thursday 18 January 2007

Are we in Iraq to bring freedom to the Iraqi people, as Bush says, or are we in Iraq to preserve the “easy motoring” freedom of American consumers by staking our claim to Iraq’s oil?

For those who have even a passing acquaintance with the geopolitical reality of how the world’s remaining oil is distributed, the answer is obvious: “It’s the oil, stupid.” Iraq has the world’s second-largest reserve of the light, sweet crude oil that sells for billions upon billions of dollars in the world economy. read more

EXTRACT: MEND said that it was planning to stop taking hostages and begin focusing on using sabotage and bombings to cripple the oil industry.

By Julie Ziegler and Karl Maier

Jan. 18 (Bloomberg) — One Italian and five Chinese hostages being held by two different groups in Nigeria were released today amid continued violence in the nation’s oil-producing region.

Three other hostages captured on Dec. 7 by the Movement for the Emanicipation of the Niger Delta are still being held. The hostages as well as the freed Italian, Roberto Dieghi, are employees of a unit of Eni SpA, Italy’s largest oil company. A separate group released five Chinese telecommunications worker kidnapped almost two weeks ago, the Chinese foreign ministry said today. read more

By Winnie Zhu

Jan. 18 (Bloomberg) — Royal Dutch Shell Plc said it has agreed with a privately owned Chinese company to build retail service stations in southwestern China to tap rising demand for auto fuels in the world’s second-biggest car market.

Shell will team up with Chongqing Shuorun Petroleum Co Ltd. to build a network of service stations in Chongqing province, Liu Xiaowei, a spokeswoman for Shell in Beijing, said by telephone today.

Europe’s largest oil company by market value is competing with rivals including BP Plc and China’s two biggest oil companies for market share in the retailing of diesel and gasoline. China Petrochemical Corp. and China National Petroleum Corp. run more than half of the country’s 80,000 retail stations. read more

By Anthony DiPaola

Jan. 18 (Bloomberg) — Chevron Corp. and Royal Dutch Shell Plc led the largest publicly traded oil companies in crude discoveries last year as Eni SpA and ConocoPhillips were among the least successful, Sanford C. Bernstein & Co. analysts said.

Oil companies had to drill deeper to find fields, which are increasingly smaller than in the past, Neil McMahon, a London- based Bernstein analyst, wrote in a report today. That makes it harder for companies to replace pumped oil with new finds each year, McMahon said. read more

*Oleg Mitvol turns his attention to BP 

17:17 | 18/ 01/ 2007 

MOSCOW, January 18 (RIA Novosti) – Russia’s environmental watchdog will check compliance with license agreements on the Kovykta natural gas deposit in East Siberia, at which TNK-BP [RTS: TNBP] holds licenses in late spring, an agency official said Thursday.

“The probe will start before the end of the spring; I can’t give a more precise timeframe yet,” said Oleg Mitvol, deputy head of the Federal Service for the Oversight of Natural Resources. read more

*(Dr John Huong may wish to take note of this article in connection with the defence of the High Court action brought against him collectively by EIGHT Royal Dutch Shell companies for alleged defamation relating to articles posted under his name on this website: the next hearing takes place on 8th February 2007)

Run Date: 01/18/07
By Bojana Stoparic
WeNews correspondent

Two oil pipelines in Russia and the Caucasus boosted prostitution and poverty according to a recent report. Authors hope the findings will heighten awareness of gender-related development needs at this weekend’s World Social Forum in Kenya. read more

Royal Dutch Shell plc issues its first Technology Report, an overview of 27 advanced technologies – some delivering benefits today and others that will shape the future of the energy industry.

The Shell Technology Report shows how the company is developing and applying technology to meet the tremendous challenge of securing the world’s growing energy needs in an environmentally responsible way.

Technology is central to meeting the Middle East’s energy challenge, both in producing efficiently and effectively the region’s energy resources and in meeting the Middle East’s growing energy needs. Shell has technology centres in Doha and Muscat and contributes to the development of technical professionals through its operations and support for tertiary education institutions across the region. read more

By: Rupert Steiner, Associate Editor and Richard Orange
17/01/2007

ROBERT Dudley, the president of BP’s joint venture in Russia, privately warned that he would leave if passed over for the job of BP chief executive. In the event, the post went to Tony Hayward, BP’s head of exploration and production. Last week Hayward was appointed successor to John Browne, who will step down from his current position in June.

“He [Dudley] said he will leave,” said a senior source. “He has been passed over and I don’t think they will keep him. He is running the eighth largest oil company in the world for BP; he can probably go somewhere else and run an oil company himself now.” read more

January 18, 2007 – 10:14AM

Woodside Petroleum has delivered record annual production and revenue on the back of higher commodity prices, but, as expected, output issues at its Chinguetti oil field have started to bite.

Woodside, Australia’s biggest independent oil and gas producer, posted production of 19 million barrels of oil equivalent (Mmboe) for the fourth quarter.

The result was just short of the 19.1 Mmboe produced in the third quarter and a 28.1 per cent increase on the 14.8 Mmboe produced in the corresponding quarter in 2005. read more

Jan. 18, 2007, 12:38AM
Energy giants back program to ‘cap and trade’ carbon emissions
By TOM FOWLER

After years of loudly challenging the theory of global warming, a growing number of energy companies are saying the regulation of greenhouse gases in the U.S. is inevitable and are even lining up behind proposed legislation to do so.

Five of the country’s largest electric power companies, including Exelon, Entergy and Calpine, said Wednesday they would back a bill sponsored by Democrats to create a so-called “cap and trade” system in the U.S. for gases that are blamed for global warming. read more

EXTRACT: Shell’s industry-lagging record at finding oil and gas has been a concern for investors.

Thu Jan 18, 2007 3:03am ET

ASTANA, Jan 18 (Reuters) – Royal Dutch Shell (RDSa.L: Quote, Profile , Research) and Kazakhstan have not yet clinched a deal, expected by the end of 2006, to explore the Nursultan block in the Caspian Sea, the Central Asian country’s oil minister said on Thursday.

Shell has been in competition with U.S. major ConocoPhillips (COP.N: Quote, Profile , Research) to win exploration rights for the block, close to Kuryk, where Kazakhstan plans to build a port. Energy and Natural Resources Minister Baktykozha Izmukhambetov said in November the government favoured Shell and expected a deal by year-end. Asked about the negotiations on Thursday, the minister said: “There’s no decision yet. The question remains open”. He told reporters in the Kazakh capitak Astana: “These negotiations have been going on for a long time. We have many such cases”. read more

By : Richard Orange and Rupert Steiner
17/01/2007
 
BP is in need of a cultural revolution.Tony Hayward’s first task will be to change the corporate

IT has been a frenetic new year for the 10 international business heavyweights serving as non-executives on BP’s board. After carefully considering his options in the calm of Barbados, John Browne had sprung his last surprise: deciding to step down 18-months early as BP’s chief executive. At that point neither he, nor the board, had yet made the final decision on who would be his successor. read more

CAN WE DETECT THE HAND OF TONY BLAIR’S former spinstress Anji Hunter in the attempted control of the media during publication of the critical Baker Report into BP’s Texas City disaster?

In a forlorn bid to muzzle the London press, BP refused questions from journalists other than those in Houston during a video conference on the report, despite BP chief executive Lord Browne himself joining in by videolink from London. The risible excuse for limiting the inquisition? “Technical reasons.” read more

EXTRACT: Diezani Alison-Madueke, 46, director of external affairs for the oil company Shell in Nigeria, believes that business schools could do much more to attract them. Last year she became the first female in the company’s 69-year history to become a board member, three years after completing her MBA at Cam-bridge’s Judge Business School. The MBA enhanced her career prospects but it was no picnic getting it.

THE ARTICLE

Mary Braid,
Published: Jan 18, 2007

There has been good and bad news recently regarding the advancement of women in the notoriously male-dominated world of business. Among the good was Cynthia Carroll’s appointment in October last year as chief executive of Anglo American. Carroll, a Harvard MBA, became the first woman to head up a large mining group and only the third female chief executive of a FTSE100 company. read more

Published: Jan 18, 2007

IN the controversy over energy company negligence, the insurance industry has raised aloft the banner of best practice and supply security, writes James Brewer.

With BP humbled over the lack of safety procedures which led to an explosion at its Texas City refinery in March 2005, and embarrassed by a pipeline breakdown a year later, insurers say that their industry has a valuable role to play in improving standards in the industry.

Equally, they are standing by to support BP, Shell and others in opening new oil fields and territories with the safeguard of innovative insurance products. At a hearing on energy security questions, members of the UN committee on sustainable energy have been told by the committee’s financial services representative, Magne Seljeflot, chairman of Aon Natural Resources, of the role the insurance industry can play by applying risk mitigation. read more

Published: Jan 18, 2007

Shell E&P Ireland has rejected claims that it allowed five Rossport men to languish in prison for several weeks in 2005 after the company had agreed to cease work on its controversial onshore gas pipeline pending the outcome of a safety review by the Minister for the Communications, Marine and Natural Resources.

Counsel for Shell Patrick Hanratty told the High Court yesterday such a suggestion was “grossly unfair”. Shell had nothing to do with the amount of time the men spent in prison or the fact they were there at all, he said. read more

Published: Jan 18, 2007

SHELL has rejected claims that it let the Rossport Five languish in prison for several weeks after the company had agreed to cease work on its gas pipeline.

Shell E & P Ireland had halted the work pending the outcome of a safety review by the Minister for the Marine and Natural Resources, the High Court heard yesterday.

Counsel for Shell Patrick Hanratty said that such a suggestion was “grossly unfair”. Shell had nothing to do with the amount of time the men spent in prison or the fact they were there at all. read more

Published: January 18 2007 02:00 | Last updated: January 18 2007 02:00

*Tender offer for 10 per cent of its share capital

Pro

Would be a high-profile event and answer investors’ concerns about undergearing

Con

The buy-back programme so far has appeared ineffectual: would this do any better?

*Special dividend

Pro

May be a better way to return cash to shareholders and would appeal to income investors

Con

Would create tax problems. The special dividend might have to be cut or dropped if oil prices fall further read more

By Dino Mahtani in Lagos
Published: January 18 2007 02:00 | Last updated: January 18 2007 02:00

Oil companies operating in Nigeria are facing an escalation in expatriate salaries and security costs following the death of a Dutch oil worker during an attack by armed gunmen on Tuesday.

The worker from Hyundai, the South Korean industrial group, which has a Nigerian oil service unit, was shot dead late on Tuesday in an attack on a vessel transporting Nigerian and Korean workers near an oil and gas export terminal in the oil producing but turbulent Niger Delta region. At least one Nigerian was also killed. read more

By Ed Crooks and Carola Hoyos
Published: January 18 2007 02:00 | Last updated: January 18 2007 02:00

As James Baker was delivering his politely excoriating verdict on BP’s safety culture and leadership, analysts were judging its qualities as an investment.

Many of their views were positive. Citigroup, UBS and Deutsche Bank were among those making or reiterating “buy” recommendations on the shares. After a period of sustained underperformance, on many yardsticks BP’s shares now look cheap, they believe. read more

Royal Dutch Shell plc

Shell Technology Webcast – Thursday 18th January 2007

16/01/2007

On Thursday 18th January, Shell is holding a webcast on the announcement of the Shell Technology Report featuring Jan van der Eijk Group Chief Technology Officer, Shell International B.V. The report gives an overview of 27 advanced technologies, some delivering benefits today and others, in advanced R&D, that will shape the future of the energy industry.

A question and answer session will follow an introductory presentation. read more

This Day (Lagos)
NEWS
January 16, 2007
Posted to the web January 17, 2007

By Chika Amanze-Nwachuku
Lagos

The Shell Petroleum Development Company (SPDC) has appealed to leaders of K-Dere community to allow its technical team to properly secure the wellheads to prevent any danger to lives and property.

The SPDC fire team had on January 13, extinguished the Bomu – 41 and 50 well head fires but was prevented from securing the two wells.

The company in a statement last night, said the community’s refusal to allow the fire fighters secure the two wells, has caused oil and gas leakages into the environment which could ignite another fire which will be difficult to control and which could destroy the environment and harm people living in the area. read more

Posted to the Web: Thursday, January 18, 2007

ABUJA—PRESIDENT   Olusegu Obasanjo yesterday convened a meeting between the Ogoni community and Shell Petroleum Development Company over the stalled peace talks that has resulted in the suspension of oil exploration in the area.

The President at the meeting, which was attended by the representatives of Ogoni, Shell, United Nations Environmental Programmes as well as Father Matthew Kukah, emphasized the need to ensure peace, harmony, reconciliation and sustainable development in the area. read more