July 4th, 2007:

July 5, 2007
Carl Mortished, International Business Editor

Gazprom will create its own private army after Russian lawmakers gave the gas utility and Transneft, the state oil pipeline monopoly, the power to create armed units to defend their installations.

A Bill passed yesterday by the Duma, the parliament’s lower house, would allow Gazprom and Transneft to recruit and arm their own security forces, giving them greater powers than private security firms.

The move provoked a storm of protest against the creation of private armies within Russia’s largest corporations. Gennadi Gudkov, a deputy in the Duma who had opposed the Bill, called it a “Pandora’s box . . . This law envisages the creation of corporate armies. If we pass this law, we will all become servants of Gazprom and Transneft.” read more

Jul 04 2007

A MAJOR energy company that left the Northwest more than two years ago after a group of native people said it wasn’t wanted is making plans to return.

Shell Canada has been holding meetings in Dease Lake and other places north of here to gauge community reaction to its plans to resume the search for coalbed methane natural gas in the Klappan area which is part of the Tahltan traditional territory.

Shell has the exclusive rights from the provincial government to look for coalbed methane in the Klappan but drilled just three exploratory wells in 2004 before pulling out in 2005. read more

By Eduard Gismatullin

July 4 (Bloomberg) — Crude oil traded near a 10-month high in New York after Royal Dutch Shell Plc said militants attacked its rig in Nigeria, raising concern about further oil-supply disruptions from Africa’s largest producer.

Five expatriate contractors working for Lonestar Drilling Nigeria Ltd. were taken hostage, said Precious Okolobo, a spokesman for Shell’s Nigerian venture. The attack occurred early this morning in the Soku field, where the rig was drilling a well. No production was affected, he said. read more

By Simon Packard

July 4 (Bloomberg) — Westbrook Partners LLC, the New York- based property investor, agreed to buy London’s Shell-Mex House, an art-deco office building overlooking the Thames river, for about 490 million pounds ($988 million).

The purchase is due to be completed tomorrow, said Mark Donnor, managing principal of Westbrook’s European business, in a telephone interview today. The property at 80 The Strand in the West End district is owned by a group that includes real estate investors Robert and Vincent Tchenguiz. read more

Clues suggest that merger talks between two oil giants, BP and Royal Dutch Shell, to create the world’s biggest corporate titan, eclipsing ExxonMobil are underway.

Yesterday two British newspapers, The Times and the Daily Mail, reported news of merger discussions between BP and Royal Dutch Shell to create a corporate titan – the world’s largest company.

Under the headline “It’s on. A £250bn-plus summertime oil merger to create the world’s largest company”, the Daily Mail said “Red hot rumours suggest that top corporate financiers, financial advisers and executives of BP and Royal Dutch Shell are currently involved in round the clock discussions centred on finalising terms for a ‘friendly’ merger which many industry analysts believe would make a great deal of sense”. read more

(Former Royal Dutch Shell Executive, Paddy Briggs)

There is a very strong logic indeed to a merger between BP and Shell, providing this merger is accompanied by a split between the (merged) upstream and the (merged) downstream businesses. A Shell/BP upstream company would be a phenomenal corporation – not just clear sector leader but also big enough pretty much to be fireproof to the risk of a hostile takeover by Russian or Middle East interests.

The new downstream corporation (entirely separate from the upstream) would focus on the customer (Hooray!) and the brand(s) (Double Hooray!!) and would become a proper marketing focused business rather than being the fag end of the upstream. Upstream folk haven’t a clue how to run marketing businesses as both Shell and (to a lesser extent) BP have shown for years! read more

Extract: In Nigeria, Royal Dutch Shell Plc’s oil rig was attacked and five expatriates were taken hostage, Precious Okolobo, a spokesman for Shell’s Nigerian venture, said today. The attack occurred in the Soku field, where the rig was drilling a well. No production was affected, he said.

By Eduard Gismatullin
 
Traders work in the crude oil futures pit in New York July 4 (Bloomberg) — Crude oil fell in New York from near a 10-month high as some traders speculated five days of gains weren’t justified. read more

By Maher Chmaytelli

July 4 (Bloomberg) — Libya, the holder of Africa’s largest oil reserves, will stage its first auction of natural-gas exploration rights in December, as the nation seeks to increase its sales of the fuel to Europe, the state-run oil company’s chairman said.

Libya will announce “in the next few days” the exact location of plots of land where 12 drilling permits will be offered to foreign companies, Chairman Shokri Ghanem of National Oil Corp. said by telephone late yesterday from Tripoli. The licenses to explore will be awarded in an auction in early December in which companies will bid openly, he said. read more

By Angela Henshall
Last Update: 8:09 AM ET Jul 4, 2007

LONDON (MarketWatch) — A crude oil exploration rig located in the Soku Field, Nigeria, has been temporarily shut down and personnel evacuated following an attack by a militant group but output has not been affected.

Spokeswoman Eurwen Thomas said five workers employed by contractor Lonestar Drilling had been abducted during the attack.

The drilling rig was attacked overnight, the hostages taken include one Australian, two New Zealanders, one Venezuelan and one Lebanese worker. read more

Wed Jul 4, 2007 11:51 AM BST

ABUJA, July 4 (Reuters) – An attack on a drilling rig in the Niger Delta in southern Nigeria on Wednesday has not affected oil production because the rig is an exploration facility, a spokesman for Shell (RDSa.L: Quote, Profile , Research) in Nigeria said.

Precious Okolobo said the rig, located at Soku in the coastal area of Rivers state, was operated by a contractor company, Lonestar. Gunmen attacked the facility overnight and kidnapped five expatriates working there. read more

Wed Jul 4, 2007 10:05AM BST
By Austin Ekeinde

PORT HARCOURT, Nigeria (Reuters) – Gunmen attacked a Shell oil rig in the Niger Delta in southern Nigeria early on Wednesday and kidnapped five expatriates, police and security sources said.

This came as the rebel Movement for the Emancipation of the Niger Delta (MEND), responsible for most of the attacks that have crippled the Nigerian oil industry, called off a one-month truce. But the MEND spokesman said the group was not involved in the overnight raid on the Royal Dutch Shell rig. read more

As plans move ahead for a US Africa Command, African nations remain cool to the idea amid fears of mission creep and unclear US intentions.

By John C K Daly for ISN Security Watch (02/07/07)

As US plans for an African command (AFRICOM) operations base forge ahead, perceptions that the base’s raison d’etre is to gain control over regional oil assets and counter growing Chinese influence are growing.

While Washington is proffering AFRICOM as a largely benign organization, Africans remain wary, having seen that a US military footprint in Djibouti led to operations such as Somalia, and believe that the Pentagon could not resist intervening to protect US investments in oil producing nations such as Nigeria or Equatorial Guinea if their regimes were toppled. read more

Extract: Royal Dutch Shell Plc will decide later this year whether to go ahead with a project to double capacity at its joint-venture refinery in Port Arthur, Texas.

By Stephen Voss

July 3 (Bloomberg) — Major oil companies are set to reap profits from their refining businesses for the second quarter as prices for gasoline and other refined products outperform the raw- material cost of crude oil.

A refining index published yesterday by BP Plc, Europe’s second-largest oil company, showed global refining margins averaged $16.74 a barrel in the second quarter through June 28, up from $12.75 a year earlier and $9.45 for the first quarter of 2007. read more

Published: Jul 03, 2007

The board of Petroecuador has accepted the proposal of Shell to intervene in the petroleum refinery of Esmeraldas, engaging in management consulting services and training the labour force. Enap had interest to present an offer similar to Shell`s, but wanted also a partnership with Petroecuador which declined. Shell services are to cost US$17mil and are thought to promote a change in the refinery culture.

A very similar agreement has been performed by Shell next to the Barrrancabermeja refinery in Colombia, over a five years period. The revamping of Esmeraldas is to cost investments of US$130mil and the first stage of it, the revamping of the catalytic cracking unit has been completed by UOP. read more

Published: Jul 04, 2007

What’s the fuss?

THE surge in demand for energy, coupled with high oil prices, has led to a boom in exploration and production. Given that offshore activity is expected to represent 43% of oil production and 83% of gas production by the end of 2008, there is much interest in the offshore market.

Furthermore, as oil and gas prices continue to rise, the exploration and production of previously ignored marginal fields is now becoming economically viable meaning drill ships, production vessels and supply ships are all in demand. read more

Kamarul Yunus,
Published: Jul 04, 2007

SHELL Malaysia Trading Sdn Bhd’s retail network will be expanded to more than 900 petrol stations this year, after it buys 44 ProJET service stations.

The unit of Royal Dutch Shell is awaiting the Government’s approval for the ProJET purchase.

Shell Malaysia managing director Datuk Mohzani Abdul Wahab said it expects approval for the acquisition of ConocoPhillip’s ProJET stations and landbanks this month.

“Apart from the organic growth of 30 new stations a year, we are confident that the number of our petrol stations will exceed 900 outlets by year-end following the acquisition of ProJet stations. read more

Martyn Wingrove
Published: Jul 04, 2007

RISING vessel charter rates, higher oilfield service costs and development of new projects could push total facility removal expenditure in the UK North Sea past the GBP20bn ($40bn) mark.

The British oil industry forecasts facility decommissioning costs for all platforms, pipelines, wells, subsea facilities and floating production systems ever installed on the continental shelf are climbing, which is why it is negotiating with the government over liability and tax issues. read more

EXTRACT: As for Shell’s assurances of its commitment to safety, a survey by the Financial Times, published last year, shows Shell to be responsible for more employee and contractor deaths from 2003 to 2006 than Exxon and BP combined.

THE ARTICLE

Published: Jul 04, 2007

The Corrib gas project has divided the people of Erris in north Mayo in a deeply bitter and, at times, violent way. One side claims to be defending Ireland’s natural resources from an allegedly rapacious multinational oil giant. The other side claims that the views of locals in favour of the project rarely get heard, but were reflected in the recent election. We asked two local people – one from each side – to state their case. read more

Lorna Siggins,
Published: Jul 04, 2007

A US environmental group has claimed there could be a serious loss of confidence in gardaI in north Mayo as a result of the continuing Garda security for the Corrib gas project.

In a report published this week, the San Francisco-based Global Community Monitor calls for Government action to prevent further serious injury to protesters, the public and members of the Garda SIochana, and warns of a “more explosive situation” if there is no intervention. read more

By Jude Webber in Buenos Aires
Published: July 4 2007 03:00 | Last updated: July 4 2007 03:00

Argentina has at last admitted that the energy sector – the Achilles’ heel of its economic policy – is in trouble.

For the first time, President Néstor Kirchner used the word “crisis” to describe the severe shortages that have forced the government to ration gas for factories to guarantee enough energy for heating homes.

Low rainfall has caused problems for hydro-electric dams. Industrialists, who have already made temporary lay-offs, have begun warning that they will have to start cutting jobs soon. read more

Nick Fletcher
Wednesday July 4, 2007

A smattering of bid speculation, a series of upbeat trading statements, and a number of positive analyst notes put the market in a good mood yesterday.BP added 1.5p to 605.5p and Royal Dutch Shell climbed 13p to £20.80 after speculation the two had revived merger talks. Traders noted, however, that Shell yesterday bought back 390,000 of its own shares, making the tale unlikely.

Extract from…

http://business.guardian.co.uk/marketforces/story/0,,2117892,00.html read more

Last Updated: 2:06am BST 04/07/2007

A round-up of headlines from across the financial sectors, provided by Bloomberg News

ENERGY

• BP, Statoil and Turkish pipeline company Botas are close to selling natural gas from Azerbaijan into Turkey, a BP spokesman said

• Royal Dutch Shell, said it started natural gas marketing in Hungary using its own and third-party supplies.

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2007/07/04/cxbloom104.xml

KUALA LUMPUR: Shell Malaysia Trading Sdn Bhd will have an expanded network of 904 petrol stations by year-end.

This will include 30 new stations and the acquisition of 44 ProJet outlets.

Managing director Datuk Mohzani Wahab said currently, Shell had 830 petrol stations in Malaysia. 

“We are awaiting the Government’s approval about the acquisition and expect to hear from them some time this month,” he told reporters after unveiling the Driver & Fuel Economy Report 2007 on Tuesday. read more

Web posted at: 7/4/2007 7:15:28
Source ::: Agencies 

TEHRAN • Iran admitted yesterday that international sanctions imposed over its controversial nuclear programme were harming its ability to invest in oil infrastructure.

“The problems that they have made for banks have troubled financing of some projects,” Oil Minister Kazem Vaziri Hamaneh told the official Irna news agency.

The UN Security Council has adopted two sets of sanctions against Iran over its failure to heed ultimatums to suspend uranium enrichment, the process that produces fuel for nuclear power stations, but in extended form can also make the fissile core of an atomic bomb. Washington also imposes separate sanctions of its own. read more

Published: 04 July 2007

That old chestnut again. The story that BP is exploring the possibility of a mega-merger with Shell to create the Western world’s largest oil company does at least have the merit of once being partially true. Exploratory talks were indeed held a year or two back when John Browne was chief executive of BP. They were one of the things that convinced the BP board that Lord Browne had been too long in the job and needed to be reined in.

The story should be given even less credence today than it was back then. Not in a month of Sundays are US and European regulators going to allow any such merger – or at least not without disposals so large that they would undermine much of the transaction’s purpose. So why has the rumour come bouncing back? With the City advisory fees on any such deal likely to be almost as humongous as the merger itself, this may be a question more of hope than realistic expectation. read more