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Posts from ‘February, 2006’

THE NEW YORK TIMES: Supreme Court Clears Oil Companies

By THE ASSOCIATED PRESS
Published: February 28, 2006
Filed at 3:31 p.m. ET
WASHINGTON (AP) — The Supreme Court on Tuesday threw out a lawsuit that accused two oil companies of inflating gas prices by at least $1 billion.
Justices unanimously said gas distributors did not prove that Chevron Corp. and Shell Oil Co., a U.S. subsidiary of Royal Dutch Shell Plc, violated antitrust laws in the joint venture, which ended four years ago.
Justice Clarence Thomas, writing for the court, said the companies had a legal partnership. ''The pricing decisions of a legitimate joint venture do not fall within the narrow category of activity that is per se unlawful'' under federal law, Thomas said.
At the time of the deal in 1998, Texaco was independent from Chevron. The company joined with Shell to form enterprises to handle refining and marketing of their gasoline.
Gas distributors filed a class-action lawsuit in California, alleging that Texaco and Shell had used the partnership to fix gas prices in violation of antitrust provisions of the Sherman Act.
A ruling in favor of the gas distributors would have had broad implications for business mergers beyond the oil industry.
Representatives of Chevron and Shell lauded the decision.
''As the Supreme Court noted, the joint venture, which no longer exists, was extensively reviewed and approved by the federal government's antitrust enforcement agency, the Federal Trade Commission,'' Chevron spokesman Donald Campbell said. ''It was also reviewed by four state attorneys general, who similarly concluded that the venture was not anticompetitive.''
A lawyer representing the plaintiffs did not immediately return a call seeking comment.
The case was argued at the court last month, and justices signaled then that they were not concerned that the giant gas companies went too far. Chief Justice John Roberts said that joint ventures must price their products, and it shouldn't matter whether they are sold as a new brand or under the Shell and Texaco labels.
Gas price-fixing has been a sensitive subject over the past year for Americans who experienced surging prices that exceeded $3 a gallon in many parts of the country.
A trial court judge dismissed the lawsuit against the oil companies. But the San Francisco-based 9th Circuit U.S. Court of Appeals ruled there was evidence that the ventures had improperly restrained trade.
The high court erased that decision. Justice Samuel Alito did not participate in the case because he was not on the court when the appeal was argued.
The cases are Texaco v. Dagher, 04-805, and Shell Oil v. Dagher, 04-814.
Shares of Chevron fell 59 cents to $56.51 on the New York Stock Exchange, where those of Royal Dutch Shell declined by 50 cents to $60.41.
In the past year, Chevron has traded in a range of $49.50 to $65.98, and Royal Dutch Shell has traded between $57.79 and $68.45.
On the Net:
Supreme Court: http://www.supremecourtus.gov/ read more

THE NEW YORK TIMES: Court Rejects Shell, Texaco Venture Liability

By REUTERS
Published: February 28, 2006
Filed at 10:40 a.m. ET
WASHINGTON (Reuters) – The U.S. Supreme Court ruled on Tuesday that Shell Oil Co. and Texaco Inc. cannot be held liable under the antitrust law for their now-defunct joint ventures that had been approved by the federal government and that set the selling price for gasoline.
The justices unanimously overturned a U.S. appeals court ruling that the antitrust law's automatic prohibition against price fixing applied to the economic arrangements under the two joint ventures set up in 1998 and discontinued in 2001.

The ruling for Shell and Texaco stemmed from a lawsuit brought by 23,000 gas station owners in the western United States who said the two companies conspired to fix prices for their gasoline brands through the joint ventures.

The joint ventures took over the gasoline wholesaling and retaining operations of the two companies. One venture, called Equilon Enterprises, operated in the U.S. West while the other one, Motiva Enterprises, covered the eastern United States.
Texaco left the joint venture when it merged with Chevron Corp. in 2001 to form ChevronTexaco Corp. (CVX.N). The company now is called Chevron Corp. Shell Oil is a unit of Royal Dutch/Shell (RD.AS) (SHEL.L).
A federal judge in Los Angeles dismissed the lawsuit, but the appeals court ruled it could go forward. It ruled the companies could be held liable because the joint ventures priced Texaco and Shell gasoline the same.
The companies said the U.S. Federal Trade Commission approved the joint ventures and that they cannot be held liable. The U.S. Justice Department supported them.
The Supreme Court ruled for the two oil companies.
Justice Clarence Thomas concluded in the seven-page opinion that it is not automatically illegal under the antitrust law for a lawful, economically integrated joint venture to set the prices at which the joint venture sells its products.
He said Equilon's pricing policy may be price fixing in a literal sense, but it is not price fixing in the antitrust sense. read more

ShellNews.net: U.S. PIRG PLAN FOR ARCTIC WILDERNESS RESOLUTION AT SHELL AGM THWARTED

ARTICLE BY JOHN DONOVAN
Zack Brown, an Arctic Wilderness Associate for the U.S. Public Interest Research Group arrived in London last Wednesday morning on an overnight flight from Washington DC. The sole purpose of his mission was to purchase sufficient shares in Royal Dutch Shell plc to enable a resolution to be submitted for inclusion on the agenda for Shell’s AGM in May 2006 relating to Shell’s exploration plans for the Arctic Wilderness. A resolution put forward on this basis has to have the support of 100 shareholders before being considered for inclusion.
Mr Brown had a meeting at The Shell Centre later the same day with Royal Dutch Shell Plc Assistant Company Secretary, Mr Mark Edwards. The events surrounding what unfortunately turned out to be an unsuccessful mission are set out in the correspondence below. It was unsuccessful despite the fact that Mr Brown had the necessary funds and shareholder names. I will leave it to readers to draw their own conclusions from the correspondence.
I have removed most telephone and fax numbers as it does not seem appropriate to publish them on the Internet. The exception is the contact information for Zack Brown which he has previously given us permission to publish.
EMAIL FROM JOHN DONOVAN TO SHELL INTERNATIONAL 21 FEBRUARY 2006
For the attention of Mr Gerard Paulides
Shell International Ltd
Group Investor Relations
FI Division
Shell Centre
London SE1 7NA, United Kingdom.
Telephone: Fax:
E-mail: [email protected]
Dear Gerard
I am an existing shareholder in Royal Dutch Shell Plc.
I have been asked by the Zack Brown, an Arctic Wilderness Associate of the U.S. Public Interest Research Group to assist in purchasing 100 shares in Royal Dutch Shell Plc so that it is possible for their organisation to put a resolution on the agenda for the Shell AGM on 16 May 2006. I should make it clear that I am not authorised to speak on their behalf and this communication is therefore entirely at my initiative. I understand that a deadline is fast approaching for the introduction of any such resolution.
I have already been in contact with Lloyds TSN Registrars but it has not thus far been possible to obtain answers to questions on this matter. I have also spoken to my own stockbrokers via HSBC Bank and have been informed that I can act as a nominee and purchase 100 shares at a cost of £29.95 each which includes admin charges. The shares could then each be transferred in to a different shareholders name, in this instance US citizens. However it would take up to 5 working days for the names to appear on the register of shareholders, which probably takes us over the deadline.
I am sure that Shell would like to assist in any reasonable way that it can to facilitate the important issues relating to oil exploration in the Arctic Wilderness to be put before shareholders. I would therefore be most grateful for your answers to the following questions.
What is the deadline for submitting a shareholder resolution?
Would Shell accept a confirmation from share brokers that the shares had been purchased provided evidence was supplied of individual shareholder names?
If the answer to the above question is no, can I go to Lloyds Registrars with the cash to purchase 100 shares on the spot, in which case I would supply the names of the individual shareholders. If this can be done could you very kindly give me a contact name and phone number?
As there appears to be great urgency attached to this matter I would be most grateful for your reply ASAP.
My telephone number is:
Mobile:
I will also send a copy of this communication by fax.
Yours sincerely
John Donovan
EMAIL FROM JOHN DONOVAN TO ZACK BROWN 21 FEBRUARY 2006
Hello Zack
I had a long informative chat with Mark Edwards, the assistant Company Secretary of Royal Dutch Shell Plc.
He says that you have also been in contact and that an email has been sent to you.
This is what he told me.
The deadline is 1st March for a non defamatory resolution to be filed.
All shareholder names/addresses must be straightforward i.e. no nominees names or addresses.
If deadline is missed the resolution could still be added but it would need to be filed 6 weeks before the AGM. However you would have to meet the distribution and postal costs estimated at between £70,000 and £100,000. This would appear to rule out that option.
He says that you would need to act with great speed to meet the 1st March deadline and has given me the name and phone number of a person to contact at Lloyds TSB: Mr Bert Groves on 01903 XXXXXX. Unfortunately he is not available tomorrow, so I hope you were given this information and have already been in contact. If you have not already done so I understand that someone else will answer his phone tomorrow and hopefully deal with the matter.
Mark suggested in any event that you should seek legal advice about your plans. Basically Shell considers the issues involved to be important and would be happy to see a resolution on the subject.
No doubt I will hear from you.
Regards
John
EMAIL FROM JOHN DONOVAN TO MR MAARTEN VAN DEN BERGH, CHAIRMAN, LLOYDS TSB BANKING GROUP: 23 FEBRUARY 2006
23rd February 2006
Mr. Maarten A van den Bergh
Chairman
Lloyds TSB Group
25 Gresham Street
EC2V 7HN
URGENT
4 PAGES BY FAX ONLY TO:
FROM FAX NUMBER:
Dear Mr. Maarten van den Bergh

U.S. Public Interest Research Group

I am writing to you on an urgent matter both in your capacity as Chairman of the Lloyds TSB Group and a main board director of Royal Dutch Shell Plc. It concerns oil exploration in the Arctic Wilderness and associated vitally important issues, including for example the fate of the Caribou, Bowhead Whale and Polar Bear.
I attach a copy of a self-explanatory letter to Shell International Limited concerning Mr. Zack Brown, an Arctic Wilderness Associate of the U.S. Public Interest Research Group. I have also supplied a copy of a subsequent email that I sent to Mr. Brown following a conversation with Mr. Mark Edwards, the Assistant Company Secretary of Royal Dutch Shell Plc. By that time, Mr. Brown had already spoken by telephone to Mr. Edwards. All of these communications took place on Tuesday 21st February.
As a result, Mr. Brown decided to take an overnight flight to London from Washington DC and had a meeting with Mr. Edwards at The Shell Centre yesterday. He advised Mr. Edwards of his plans to visit Lloyds Registrars at Worthing with me today to purchase the relevant shares. No attempt was made to dissuade him from making the visit. Indeed, the impression given to Mr. Brown was the same as that given on Tuesday i.e. Shell would be happy to see a resolution on the agenda as it recognizes the importance of the issues involved. Obviously the text of the resolution would be subject to normal constraints.
When we arrived at Lloyds TSB Registrars at 12.30 today, we were politely asked by an official to wait in a meeting room while enquiries were made. After about half an hour, the same gentlemen explained that your share broker division – Shareview Dealing – carries out Shell share trades on a Tuesday only and that as a consequence the deadline of shareholder names appearing on the relevant registrar by 6pm on Wednesday 1 March 2006 could not be met. The gentleman involved seemed uncomfortable with the information he had been asked to pass on. His hands were trembling when he said that his instructions were that Lloyds TSB Registrars was unwilling to bend the rules – your standard terms and conditions – to facilitate the purchase and registration of the shares in time to meet the deadline.
Under all of the circumstances, including your senior management roles in both companies, I am appealing to you to look into the situation as a matter of urgency. The fact that Zack Brown got on the first plane to London after the encouraging response from Mr. Edwards demonstrates how passionate he and his highly regarded organization are about this worthy cause which they, and apparently Shell, believes is deserving of consideration at the Royal Dutch Shell Plc AGM. As time is of the essence, I would be most grateful for your reply ASAP.
It would be unfortunate if anyone was left with a suspicion, perhaps unfairly, that while Shell was making encouraging noises about the prospect of a resolution on this matter, an apparently insurmountable obstacle, which is actually purely of an administrative nature, is being used to thwart Mr. Brown’s important mission.
Mr. Brown is waiting in London in the hope that your intervention will allow him to return to Worthing to purchase the shares. He has the required shareholder names and the funds. With your help and some goodwill, I am sure the effort could be made to allow his laudable objective to be achieved.
My telephone number is:
Mobile:
Email: [email protected]
Email address for Mr. Zack Brown: [email protected]
Yours sincerely
John Donovan
FAXED LETTER FROM JOHN DONOVAN TO MR MICHIEL BRANDJES, COMPANY SECRETARY, ROYAL DUTCH SHELL PLC: 24 FEBRUARY 2006
24th February 2006
Mr. Michiel Brandjes
Company Secretary
Royal Dutch Shell Plc
Shell Centre
London
Dear Mr. Brandies
URGENT
5 PAGES BY FAX ONLY TO:
FROM FAX NUMBER:
RE: Mr. Zack Brown, U.S. Public Interest Research Group
I attach for your information a copy of a self-explanatory letter sent by fax to Mr. Maarten van den Bergh yesterday evening. I am sure that your Mr Mark Edwards has advised you of this matter.
I am a Royal Dutch Shell shareholder and have a long standing interest in the activities of Shell. I was asked by the U.S. Public Interest Research Group to do what I can to assist in this matter.
Mr. Brown is still attempting to purchase shares via a broker but it seems that time has run out unless Lloyds TSB Registrars relent and bend their admin rules to allow Mr. Brown to purchase and registrar Royal Dutch Shell Plc shares within the deadline set by Shell.
Is it possible for you to intervene with Lloyds TSB Registrars bearing in mind the factors and issues set out in the attached letters?
Yours sincerely
John Donovan
cc. Mr Jeroen van der Veer, Chief Executive, Royal Dutch Shell Plc.
LETTER TO JOHN DONOVAN FROM BERT GROVES, SENIOR RELATIONSHIP MANAGER, LLOYDS TSB REGISTRARS: 24 FEBRUARY 2006
Dear Mr Donovan,
Royal Dutch Shell plc.
The Chairman's Office of Lloyds TSB Group plc has asked me to reply to your faxed letter addressed to our Chairman, Mr. Maarten van den Bergh dated 23rd February 2006 and received earlier today.
I would refer you to our telephone conversation at 2 p.m. today, in which I explained the role and function Lloyds TSB Registrars fulfil in the provision of registration services to Royal Dutch Shell pic (“RDS”). As Registrar we are responsible to RDS for the maintenance and administration of their register of members. This principal role is entirely separate to share dealing services which we offer as a secondary service to shareholders.
Our understanding is that Mr Edwards met with Mr Brown on 22nd February and Mr Edwards explained that it was pointless in Mr Brown visiting us in Worthing in person to purchase shares.
It is unusual for shareholders to visit our offices and the gentleman that dealt with the enquiry was correct in advising Mr Brown that we could only deal with any applications to purchase shares in accordance with our share dealing terms and conditions. We could not make any special facility available which breached these rules.
Mr Brown has contacted me by telephone this afternoon to arrange for the transfer of shares into various individuals names. I have now explained the procedures to him and provided the necessary form by email for him to print, complete and return to us duly signed and fully completed in order that the new holders can appear on the register by 6 p.m. Wednesday 01 March.
I do not feel that Lloyds TSB Registrars has placed any insurmountable obstacle of an administrative nature in the way of Mr Brown's attempts to make the necessary changes to the RDS share register by the deadline set by the company.
If I can be of any further assistance, please do not hesitate to contact me using my direct line ……
Yours sincerely,
Bert Groves
Senior Relationship Manager
RESPONSE LETTER FROM JOHN DONOVAN
26 February 2006
Mr. Bert Groves
Senior Relationship Manager
Lloyds TSB Registrars
The Causeway, Worthing
West Sussex
BN99 6DA
5 PAGES BY FAX ONLY TO:
FROM FAX NUMBER:
Dear Mr. Groves
ROYAL DUTCH SHELL PLC & U.S. PUBLIC INTEREST RESEARCH GROUP
Thank you for your letter dated 24 February 2006. When I visited your offices on Thursday I was unaware that Mr Brown had not telephoned you in advance to make arrangements using the phone number which Royal Dutch Shell Plc Assistant Company Secretary, Mr Mark Edwards, had kindly provided to me during our first telephone conversation.
After drafting my subsequent letter to Mr. Maarten van den Bergh, I sent a copy to Mr Brown for his approval. He added a few words but made no alteration or comment in respect of my remark that no attempt was made to dissuade him from visiting your offices. Perhaps he had not noticed it or was keen for the fax to be sent without delay. I made the comment in good faith, but from what you say, I accept that it was unfounded.
Mr. Brown is passionate in a worthy cause and I guess that these apparent lapses were an example of a “can do” attitude for which Americans are renowned – a quality we are sometimes lacking. He was probably also anxious about achieving the objective of his visit to London – the sole purpose of his trip.
It is only fair to acknowledge that Mr. Edwards responded quickly, politely and directly to my faxed letter and fully answered the questions I had raised. It is however most unfortunate that Shell has not been prepared to go beyond making encouraging noises.
With regards to your Terms and Conditions, rules cannot cover every situation and can be bent if deemed appropriate in exceptional circumstances. They are made by man, not set in stone by our maker. What it comes down to is whether the plan to purchase shares by the deadline was a physical impossibility or was thwarted by an artificial technicality i.e. a stipulation that Shell shares trades are only processed by Lloyds TSB on a Tuesday.
With regards to our telephone conversation on Friday, I was left with the impression that Lloyds TSB Registrars are pointing the finger at Shell saying that Shell could change the 6pm 1 March deadline, while Shell is in turn passing the buck to Lloyds TSB Registrars and your Terms & Conditions.
Although everyone seems to agree that the fate of wild life in the Arctic Wilderness is deserving of consideration by shareholders at the 2006 Royal Dutch Shell Plc AGM, it now seems most unlikely to happen.
This is all extremely disappointing bearing in mind that Mr Brown had the funds, the shareholder names and a UK citizen available (me) to purchase the necessary shares when he was at the Shell Centre last Wednesday with Mr. Mark Edwards. This was a week before the 6pm 1 March deadline for submitting a resolution – a deadline imposed by Shell which claims that it is happy to see such a resolution on the agenda.
I have not heard anything from Zack Brown since Friday evening so I do not know what his plans are. He asked during our last conversation if I would be willing to travel to Worthing on Tuesday if he succeeds in transferring shares in time. I said that I would, but I doubt very much that he will be able to make arrangements by then. My guess is that he has returned to Washington DC.
My conscience is at rest in the knowledge that I have also done everything possible to try to help.
Shell has previously stated that it should be judged by its deeds, not by its words. It is not too late to go beyond encouraging noises bearing in mind the exceptional importance of the issues which are at stake.
I will be writing separately to Mr Maarten van den Bergh with whom my father and I corresponded when he was President of Royal Dutch Petroleum.
I would now like to turn to another matter; my fathers holding in The “Shell” Transport And Trading Company Plc. I attach his letters dated 21 June 2004 and 8 February 2006 to Lloyds TSB Registrars plus a response dated 13 February 2006. Basically he had a holding in Shell from 1994, but it was apparently reduced to “nil” for some unspecified reason on 20 July 2005, even though he had faxed the letter in June 2004 giving his new address. I suspect that your Terms and Conditions will be a factor in what has happened.
Yours sincerely
John Donovan
cc.
Mr. Maarten van den Bergh, Chairman, Lloyds TSB Banking Group PLC
Mr. Mark Edwards, Assistant Company Secretary, Royal Dutch Shell PLC
Mr. Jeroen van der Veer, Chief Executive, Royal Dutch Shell Plc
Mr Zack Brown, U.S. Public Interest Research Group
My telephone number: Mobile:
Email: [email protected]
EMAIL TO JOHN DONOVAN FROM ZACK BROWN 27 FEBRUARY 2006
John – Thanks again for your help. You write in your letter that, “My conscience is at rest in the knowledge that I have also done everything possible to try to help.” I couldn’t agree more. I wouldn’t have made any progress at all without your help and hope that we can work together in the future (we’ve already begun planning for the 2007 AGM). If there is anything that U.S. PIRG can do to help you with your work, do not hesitate to ask. Thanks again, John.
Zack Brown
Arctic Wilderness Associate

U.S. Public Interest Research Group
218 D Street, SE
Washington, DC 20003
202-546-9707 – 202-546-2461 fax
[email protected]www.uspirg.org
RELATED ARTICLE BY ZACK BROWN
By Zack Brown
For the past seven years, the U.S. Public Interest Research Group (U.S. PIRG) Education Fund has led a broad coalition of environmental groups, financial organizations, investors, religious groups, students, activists and citizens in a campaign targeting oil companies that have expressed interest in drilling in the coastal plain of the Arctic National Wildlife Refuge.
The campaign has made progress with BP and ConocoPhillips, who have stopped lobbying in support of drilling in the Arctic Refuge, and have stated that drilling in the area is not a priority.
Our campaign continues to push Chevron and ExxonMobil on the Arctic, but in 2006 most of our attention will focus on Royal Dutch Shell. In March of 2005, Royal Dutch Shell bid $44 million for rights to explore for oil off the coast of the Arctic National Wildlife Refuge. With the acquisition of these leases, Royal Dutch Shell is now part of the contentious and controversial debate regarding the future of America’s Arctic.
Our organizations have repeatedly urged oil companies operating in Alaska to stay out of the Arctic Refuge and have often filed shareholder resolutions as part of this effort. We are currently working with concerned shareholders on the filing of a shareholder resolution for the Royal Dutch Shell 2006 annual meeting.
Our goal is to engage shareholders to call on Royal Dutch Shell to prepare a report on the negative impacts drilling in the Arctic Refuge would have on the environment, human rights of the Gwich’in and Inupiat peoples, and the company’s reputation. We believe that drilling in the Refuge would negatively affect the human rights of the Gwich’in and Inupiat peoples; cause irreparable harm to migratory birds, musk oxen, polar bears and the 130,000 member caribou herd; and negatively affect the company’s reputation for years to come.
As a part of our effort, we are building a large pool of individual Royal Dutch Shell common stock investors. If you, or anyone you know owns Royal Dutch Shell common stock (RDS-A or RDS-B) please contact Zack Brown at the U.S. Public Interest Research Group Education Fund prior to February 22nd at [email protected]
Zack Brown
Arctic Wilderness Associate
U.S. Public Interest Research Group
218 D Street, SE
Washington, DC 20003
202-546-9707 – 202-546-2461 fax read more

www.inq7.net: ADDED TO SHELL ARCHIVE FILE: Case vs Shell: Complainant Maria Victoria C. Medina

APRIL 2004
A FORMER employee of Pilipinas Shell Petroleum Corp. has filed a complaint for illegal dismissal against the company and two of its officers with the National Labor Relations Commission. Complainant Maria Victoria C. Medina, former communications manager of Shell, was served notice of termination effective Dec. 15, 2003.
In a statement, Medina complained that Edgar O. Chua and Roberto S. Kanapi, both her supervisors when the termination notice was served, had summarily ignored her experience in the field of communications and public relations, and discriminated against her because of gender and age. Medina filed the case on Jan. 22. Two hearings had been set for March 16 and 23. On both days, the representatives for Shell, Chua and Kanapi failed to make an appearance. A third hearing is set Tuesday at 2 p.m. read more

ShellNews.net: ASIA PULSE THREATENING LETTER

Dear Mr Donovan,

My name is Caroline Buckingham and I am the Sales Executive with Asia Pulse Pty Ltd. I have noticed a large volume of Asia Pulse material on your web site www.shell2004.com/blog & have also noticed that you are offering free redistribution of our material via your web log.

I wish to draw your attention to the fact that Asia Pulse Pty Ltd reserves all rights including copyright in relation to services provided by it and that retransmission, dissemination or publication, whether in print, electronic or other means, is expressly forbidden without written authorisation from Asia Pulse Pty Ltd. read more

ShellNews.net: Dow Jones threats against Royal Dutch Shell Plc .com

Selene H. Costello Esq.
Dow Jones & Company
200 Liberty Street,
9″‘ Floor New York,
NY 10281 (
212)416-2197 Fax (212) 416-2524
[email protected]
December 15,2005 Via First Class Mail

Letter to:
Mr. Alfred Donovan
847A Second Avenue
New York,
NY 10017
Dear Mr. Donovan:
Re: Unauthorized Use of The Wall Street Journal head cuts on www.royaldutchshellplc.com

I write on behalf of Dow Jones & Company, publisher of The Wall Street Journal newspaper and other publications. read more

ShellNews.net: Archive: Analysis March 2004: Royal Dutch Shell restates its oil reserves

National Public Radio Morning Edition March 19, 2004 Analysis: Royal Dutch Shell restates its oil reserves Edition: 10:00-11:00 AM BOB EDWARDS, host: The troubles for Royal Dutch Shell keep growing. The price of Shell stock slid further yesterday after the company again announced that its estimated oil and gas reserves are lower than presumed and that restatement is much smaller than the one in January. NPR's Jim Zarroli reports. JIM ZARROLI reporting: Shell was supposed to release its annual report today, but yesterday the company announced the report would be delayed by two months. The reason was the company had found another mistake in its oil reserve estimates. It said the mistake was technical in nature, having to do with Securities and Exchange Commission reporting requirements. But it resulted in the company having about 250 million fewer barrels of proven oil reserves than it thought during 2002. The company also lowered its 2003 estimate by 220 million. At a news conference made available over the Internet yesterday, Shell officials seem contrite. Malcolm Brinded is the company's managing director. He called this restatement `a surprise and a disappointment.' Mr. MALCOLM BRINDED (Shell): This isn't an exact science but it is up to us to make sure that we get it right and, in particular, that we strictly adhere to the SEC guidance. We can and we should've done better. ZARROLI: Normally, an announcement like this might not attract much attention, but investors are still reeling from an earlier restatement by Shell. In January, the company said it had overestimated its proven oil reserves by 20 percent. That led to the resignation of Shell's chairman, Philip Watts, and its head of Exploration and Production. Since then, the SEC and the Justice Department have said they are looking into what happened. So are Dutch and British officials. Fadel Gheit is an oil industry analyst at Oppenheimer & Co. He says Shell's credibility is very much on the line, and company officials had no choice but to come clean yesterday. Mr. FADEL GHEIT (Oppenheimer & Co.): Now they are going to be gun-shy because now they are under scrutiny. Now they know that they got caught.

ZARROLI: But Gheit said the company hasn't gone far enough. There have been recent reports that Shell executives knew about reserve problems long before they told the public. Yesterday the new chairman denied he had any prior knowledge. Gheit says the restatement suggests there's some big problems with the way the company is run. He says getting rid of two senior executives doesn't address this. That's especially true, he says, because some executives who approved the earlier reserve estimates are still with the company. One thing Shell should consider, he says, is to bring in new management from outside. read more

WWF: EBRD should not fund Shell’s Sakhalin project

28 Feb 2006
London, UK – WWF is urging the European Bank for Reconstruction and Development (EBRD) not to fund Shell’s Sakhalin II project in Russia's Far East.
In its submission to the EBRD’s public consultation, WWF has highlighted where the project’s environmental and social standards fail to stand up to those the Bank was founded on.
“WWF believes that if the EBRD funds this project it will be opening the door to lower environmental and social standards across the region it is trying to develop,” said Robert Napier Chief Executive of WWF-UK.
“Shell has had three years to resolve the issues highlighted with Sakhalin II but the simple truth is that this proposal doesn’t stand up to detailed scrutiny. If the EBRD goes ahead taxpayers money will be used to fund a project that the Bank has already admitted does not meet its policies.”
In admitting that the project doesn’t meet its policies, WWF is concerned that the EBRD is contradicting previous Bank statements that say “every project proposed for EBRD funding must comply with the Bank’s environmental policy” and that it “sets new standards in environment”.
“f the Bank funds Sakhalin II there is serious potential for not only the environment but also its reputation to be damaged,” Napier added.
Earlier this year the local Sakhalin community protested over the damage to fisheries caused by Shell’s activities; a complaint recognized by the EBRD, and local residents including the Sakhalin Regional Governor recently protested with banners calling for the EBRD to not fund the project.
In addition, whale experts are still not satisfied by Shell’s proposals to protect the last 100 endangered gray whales from noise, collisions and oil spills. And, Shell has not presented any comprehensive oil spill response plan for winter sea-ice conditions. With construction half-completed and decisions already made, Shell is only now creating its indigenous peoples plan. The timing of this plan is flawed and therefore it does not comply with EBRD policy.
Shell is also not meeting the most basic requirements for reducing impacts of river crossings, such as constructing both oil and gas pipelines simultaneously, as required by its construction permits. The project is subject to ongoing legal battles in local courts, and has already had a judgement against it. EBRD policy states that they should not fund a project that is not in compliance with all regulations.
“It is absurd to be asked to consult on the proposal when it is not complete,” said James Leaton, WWF oil and gas officer. “In an area which is covered by ice for six months of the year an oil spill could be devastating. Traditional methods such as booms would be useless and dispersants can’t be used because of the threat to the critically endangered whales.”
In addition to the whales, WWF believes the Production Sharing Agreement to be a very bad deal for Russia, especially for the people of Sakhalin. This lack of development benefits continues at all levels, with, for example, a specific sustainable development fund being used to construct housing for Sakhalin project workers rather than for local benefits.
“It is indicative of the project that local people struggle to gain access to reliable energy while Shell will be pumping gas away from the island,” continued Leaton. “The money the EBRD would make from this project will not be worth the loss of credibility and the risk of being responsible for the extinction of a species.”
For further information:
Anthony Field, Senior Press Officer
WWF-UK
Tel: +44 1483 412379
E-mail: [email protected] read more

Vanguard (Nigeria): Nigerian violence may delay OPEC cuts …MEND to escalate state of insecurity

By Hector Igbikiowubo with Agency reports
Posted to the Web: Tuesday, February 28, 2006
VIOLENT unrest in Nigeria that has led to about 30 per cent cut in the country’s crude output could persuade OPEC to maintain its level of oil output at a near historic high when it meets next week, an energy analyst has said. There are also indications that the current state of insecurity in the Niger Delta may escalate further shutting in at least half of Nigeria’s 2.6 million barrels per day capacity with implications for crude oil pricing.
Prior to violence breaking out last Thursday in Nigeria, Africa’s biggest producer of crude, analysts had predicted that the Organization of Petroleum Exporting Countries would cut output when it meets in Vienna at the start of March.
But Global Insight analyst Simon Wardell told AFP: “If the Nigerian situation means prices are US$60 to US$65 when they (OPEC) next meet, then again they’re going to have a really difficult time in cutting production back, so they’ll probably keep things steady.” His comments were made as Nigerian separatist guerrillas taunted the army with claims of further attacks after a weekend of violence forced the energy giant Royal Dutch Shell PLC to slash the country’s oil exports by a fifth.
The news prompted oil prices to spike almost 3.0 per cent in London trading, as they struck an intra_day high of US$61.63 per barrel.
Trading in New York was suspended for a national holiday but was expected to open higher today. In London trading, the price of Brent North Sea crude for April delivery surged US$1.79 to US$61.54 per barrel in electronic deals.
The Nigerian insurgents said the military had abandoned one of its posts in waterways west of the oil city of Warri, allowing the militants to dynamite a floating barracks block and another of Shell’s crude oil pipelines.
Shell officials, however, said they had evacuated all oil plants in the immediate area, bringing Nigeria’s losses to around half a million barrels per day.
The global oil market currently has spare capacity of roughly 1.5 million barrels per day, according to market analysts. That would be insufficient to compensate for a loss of total production in Nigeria, which stood at some 2.4 million bpd in January.
Mr. Wardell added that in reaction to the Nigeria unrest, OPEC would prefer to cut production. “It all depends on the price, that’s what they’ll be reacting to.”
Kuwait’s energy minister, however, said yesterday that a cut in oil production may be necessary at OPEC’s next meeting since over_supply may reach two million barrels per day (bpd) in the second quarter.
“We believe the market is well_supplied and we believe the second quarter will be over_supplied … with between 1_2 million bpd,” Sheikh Ahmad Fahd al_Sabah told reporters in his country’s parliament.
“We have to wait for our March meeting. If necessary and if prices will go back to be determined by supply and demand, we have to do our cut,” Sheikh Ahmad said. “But if prices continue as they are now we will continue to support stable prices for the future,” he added.
At its last meeting on Jan. 31, OPEC decided to keep its production ceiling of 28 million barrels per day.
The widely_expected move followed a 12% spike in the price of crude since the start of the year fuelled by controversy over Iran’s nuclear programme and a series of previous attacks against oil installations in Nigeria.
OPEC, which produces about 40% of the world’s crude, is actually producing more than 29 million barrels per day including output from Iraq, which is not included in the official quota.
While speaking exclusively with the Vanguard, a MEND spokesperson disclosed that government was taking their demands rather lightly and that there is the need to teach government a lesson in ‘quick response’.
“You are a media person, so I cant give you details. But I can let you know that we would no longer give any warnings regarding our actions. We shall go ahead and cripple oil activities in the Niger Delta before this time next month.
Our motive is to make the area unattractive to the multinationals. In no time we shall also take the fight to the streets of Port Harcourt, Warri and Yenagoa. Be rest assured that no oil installation in the Niger Delta can be safe from us neither shall any expatriate working in the area,” he said.
When reminded that their fight was with the government and not the multinationals, the MEND spokesperson countered, “these people are collaborators and we have given them a chance to exit the area. We shall not be held responsible for whatever happens to them.”
The spokesperson also served notice that as long as their demands are not met, more hostages would be taken.
The Niger Delta accounts for over 90 per cent of Nigeria’s crude oil export earnings resulting in revenues in excess of $400 billion in the last 50 years. However, the area is without basic infrastructures such as motorable roads, pipe-born water and electricity. read more

Beurs.nl: Shell Denies Report Of Attack On Nigerian Oil Facilities

LONDON -(Dow Jones)- Royal Dutch Shell PLC (RDSB.LN) said Monday its oil facilities in Nigeria haven't suffered any fresh militant attacks, adding that 455,000 barrels a day, or 19% of Nigeria's daily production, remained shut in because of attacks in past weeks.
A media report earlier Monday said another attack on a Shell oil facility had cut an additional 65,000 b/d of output.
'To the best of my knowledge there have been no new attacks,' said Shell spokesman Andy Corrigan.
Shell said earlier Monday it hasn't started repairs to sabotage pipelines and a clean-up of oil spills caused by attacks from over a week ago because of the lack of security. 'In the current security situation our teams cannot access the pipelines to effect repairs and begin the clean up of oil spill. As soon as it safe to do so, we will commence immediate assessment of the environmental impact of such attacks ….,' the company said.
Shell's Trans-Ramos pipeline that was assaulted in January was repaired just before the most recent wave of attacks over a week ago, but isn't operating due to security concerns. That line pumps about 106,000 b/d.
Shell, which accounts for almost half of Nigeria's daily output of 2.4 million-2.5 million b/d, has borne the brunt of nearly all the militant attacks the past few months.
The militant group behind the attacks, the Movement for the Emancipation of the Niger Delta, or MEND, has said it's plans to attack more facilities to cut oil output Nigerian daily oil production by 30% by the end of February.
The group, which also kidnapped nine foreign oil workers more than a week ago, is demanding greater control of oil resources in the Niger Delta, where nearly all of the country's energy resources are produced, and the release of two leaders of the ethnic Ijaw group, which dominate the delta.
-By Spencer Swartz, Dow Jones Newswires; +44 207 842 9357; [email protected] read more

Business Week: China: Is Beijing Greedy for Oil?

By Wenran Jiang
Western countries are quick to blame China's growing energy needs for rising prices. Instead, they should try to capitalize on it with new solutions
China's growing appetite for energy has caused widespread concern in the West. The Middle Kingdom is blamed for the sharp increase in global oil prices in the past few years. Meanwhile, the U.S. is uneasy about Beijing's cozy relations with major oil producers such as Iran, Saudi Arabia, Sudan, and Venezuela — some of which are hostile toward Washington. Some strategists think China's vast energy needs could eventually be a security threat in a world of diminishing resources.
That kind of talk creates plenty of resentment within the top echelons of Chinese President Hu Jintao's government. For one thing, China is paying a huge energy bill for a still-developing economy, a point not always recognized in the West.
Consider that in 2004, Beijing's oil bill rose by $7 billion thanks to climbing prices (the total energy bill that year topped $42 billion), making crude oil and petroleum products the country's largest single import item.
POLITICAL FIRESTORM. The dominant Western view holds that the worldwide increase in demand, especially from China and India, and tight global production capacity conspire to keep oil prices high. Beijing sees things far differently. The Chinese suspect the real culprit is Western government-backed, profit-seeking “international petroleum crocodiles” that manipulate oil prices. Reports in recent weeks of windfall earnings by Exxon Mobil (XOM), BP (BP), and Royal Dutch Shell (RDS-B) only enhance such perceptions.
Or take last summer's political firestorm in the U.S. over China National Offshore Oil Corp.'s (CEO) $18.5 billion bid for Unocal. CNOOC dropped its bid last August after the U.S. House of Representatives effectively blocked the deal by referring it to the Bush Administration for a national security review. California-based Chevron (CVX) ended up bagging Unocal — and plenty in Beijing came away convinced the U.S. doesn't always live up to the free-market rhetoric it broadcasts to the rest of the world.
Some even suspect the U.S. is committed to slowing down the pace of the mainland's development by keeping energy prices dear and limiting the role of Chinese companies in the global energy market. After getting snubbed on the Unocal bid, the Chinese have looked elsewhere, making a series of high-risk energy investments in Africa, the Middle East, and Latin America. So when they read Western media accounts of Beijing getting into bed with dictators or “rogue states” as defined by the U.S., they feel especially bitter.
SEA BATTLE. Given the perception gap, some Chinese strongly advocate a speedy buildup of the country's navy to protect vital energy shipping routes in Asia. Currently, a popular Chinese online novel, The Battle in Protecting Key Oil Routes, imagines a decisive sea engagement near the Strait of Malacca linking the Indian Ocean and South China Sea, in which the Chinese destroy an entire U.S. Pacific carrier group.
Beijing also objects to the working assumption among many Western analysts that Chinese demand is driving up oil prices. Most of China's energy needs are actually met by coal, a plentiful resource on the mainland. Only 6% of its energy comes from abroad.
True, China is a big and growing importer of oil, but the mainland still only represents about 3% of overall global oil trade. The U.S., with only 5% of the world's population, consumes 20% of the daily global oil supply, vs. 6% in China, home to about 22% of humanity.
DON'T BLAME CHINA. The idea that China's hypergrowth means it will quickly catch up with U.S. demand in absolute terms isn't valid, either. In 2005, with increased domestic energy production, China's oil imports grew by just 3.3% even as the economy surged by nearly 10%. This year oil imports will fall, says Lu Jianhua, director of the Foreign Trade Dept. of the Commerce Ministry. “It is unfair to blame China for rising international oil prices,” Lu says.
Meanwhile, Beijing is aiming for more self-reliance in energy. It's developing sources such as hydropower and nuclear reactors — and has met some initial success. That is crucial to Beijing's foreign policy. China doesn't want to be tarred as a rapacious energy user willing to do deals with any regime, no matter how internationally isolated, to lock up oil and natural gas assets. If China succeeds in keeping demand for oil from growing at explosive rates, it will be less vulnerable on that point.
It would also help remedy two other problems: China's serious environmental degradation and grossly inefficient use of energy. China remains the second-largest emitter of carbon dioxide (after the U.S.), while most of its cities and rivers are severely polluted. The mainland burns three times as much energy as the global average — and many times more than industrialized countries — in producing every dollar of gross domestic product. To change that, it is spending $150 billion on renewable and alternative energy projects during the next 15 years.
WORK TOGETHER. Instead of blaming Beijing for its energy demands or containing China as an energy threat, the industrialized countries should try to capitalize on China's need for new technologies that promote energy conservation and efficiency, environmental protection techniques, and renewable and alternative energy production. China also needs to be engaged in joint-efforts to manage global warming.
A cooperative approach in solving common energy security issues between China and the West will moderate Beijing's foreign policy behavior, making it easier to work out tough issues such as the ongoing Iranian nuclear crisis. Yet all this depends on some clear thinking in the West about what really drives Chinese behavior when it comes to energy security.
Wenran Jiang is a professor of international political economy and director of the China Institute at the University of Alberta, Canada. He can be reached at: [email protected] read more

Hartford Courant (USA): Fighting For Nigeria's Oil Wealth

Poverty Amid Wellheads Spawns Militant Group Promising More Attacks
February 28, 2006
By EDWARD HARRIS, Associated Press
BIRIYA-AMA, Nigeria — This village of palm-frond huts in Nigeria's southern Niger Delta sits atop one of Africa's richest energy deposits, but has electricity only when one of its young men paddles a canoe to the nearest city to buy fuel for a generator.
School is held in a cement-block church, the black footboard of a bed used as a chalkboard. There's no health clinic, and the ladies' latrine is a copse of bushes on the outskirts of town.
Most of the crude in Africa's largest oil producer is pumped from beneath this region, but it remains mired in deep poverty. A new militant group behind a spate of attacks and kidnappings that have driven prices up worldwide says that combination makes anger and more violence inevitable. Even those who have not resorted to taking up arms agree.
“The people are angry. The oil belongs to the Niger Delta, but we get nothing. That oil belongs to us,” said Innocent Johnson, a 21-year-old Biriya-Ama fisherman. “We will fight, if possible. I want to fight the government.”
Petroleum companies discovered oil underneath southern Nigeria before the west African nation gained independence from Britain in 1960. Biriya-Ama, and countless villages like it in the vast region of creeks and mangrove swamps, see little benefit. And with the oil spills and pollution that has befouled the waters and killed the fish that is their economic mainstay, the region's people say they're now growing poorer.
A new militant group, the Movement for the Emancipation for the Niger Delta, sprang up in recent months and pulled off some of the more spectacular attacks in years of violence.
In a matter of weeks, they kidnapped more than a dozen foreign oil workers and blew up oil installations to shut down about 20 percent of Nigeria's daily production – about 455,000 barrels. Prices, already near historical highs, soared on international markets.
The MEND militants, who have released four hostages, then took nine more, met with reporters for the first time on Friday, inviting them to a mid-creek meeting where they reiterated their demands: the release of two of the region's leaders from prison, a greater cut of the oil revenue and $1.5 billion from Royal Dutch Shell, the largest foreign oil firm operating in the region.
“Before independence, Nigeria fought for its freedom. Now we're fighting for our own freedom,” shouted one militant, pointing a rocket-propelled grenade at reporters.
“If the federal government can't take care of us, we need independence. We want to control our own oil,” he said from behind his black mask.
The oil question only adds to the volatility of a nation of more than 250 ethnic groups. Religion also at times appears to be pulling Nigeria apart, with the latest clashes between Muslims who predominate in the north and Christians in the south breaking out last week. The last major secessionist push ended in 1970, when the three-year Biafran war subsided after more than 1 million died.
Hostage takings and attacks on oil installations have been common for decades in the delta, but MEND has shown unusual sophistication and determination. They showed off one hostage, 68-year old Texas oil worker Macon Hawkins, to reporters last week.
The government, which has launched a military campaign dubbed Operation Just Cause to quell the violence, says the militants are little more than criminals who steal oil and sell it on the black market. The militants say the same of the military.
The oil companies say they're meeting their contractual obligations with the federal government while performing many community outreach programs in the delta, such as building schools and health clinics.
Across the delta, the people and militants blame their poverty on the oil companies, the former kleptocratic military rulers often from Nigeria's north and now President Oluesgun Obasanjo, who has won two elections since the country's return to democracy.
The militants say Obasanjo, who's not from the delta region, can't be trusted as an honest broker and they're threatening more attacks in a campaign they say will be coordinated and devastating.
It's unclear how many fighters MEND has – only 35 in four boats were seen on a recent day – or whether they have much popular support.
At Biriya-Ama, some said they weren't interested in fighting and questioned how blowing up oil facilities and shutting down production would help them in their quest to gain a greater share of the oil revenue.
“This crisis is all about the government not helping us, not giving us our share.” said Soki Brown, at 22 one of a crowd of young men with little to do in their village. “But I don't want to fight. I'm a Christian.” read more

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