Posts from ‘March, 2006’

Mar 31, 2006
SYDNEY (AFX) – Woodside Petroleum Ltd said it has resolved a dispute with the Mauritanian government over amendments to four offshore production contracts operated by the company's wholly-owned subsidiary Woodside Mauritania Pty Ltd.
The company, 34 pct owned by the Royal Dutch Shell group, said an agreement in principle to settle the dispute has been reached without the need for formal arbitration.
Woodside chief executive Don Voelte said in a statement that the agreement laid the foundation for good relations between the company and the Mauritanian government.
“The Mauritanian government has worked constructively with Woodside to resolve differences between the parties,” he said.
“We are happy with this agreement and look forward to building a productive and cooperative relationship with the Mauritanian government.”
bruce.hextall@xfn.com
blh/tr
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By Päivi Munter in Stockholm and Mark Odell in London
Published: March 31 2006 03:00 | Last updated: March 31 2006 03:00
Nokia yesterday significantly raised its outlook for the global mobile market, saying it would grow by 15 per cent or more this year, which would mean shipments of about 914m handsets.
The Finnish market leader's previous forecast was for growth of 10 per cent or more from about 795m handsets in 2005. Motorola, the world's number two handset maker, does not produce overall forecasts but was thought to be in line with Nokia's original numbers.
Speaking at his last annual general meeting as Nokia's chief executive yesterday, Jorma Ollila said about 80 per cent of the world's next 1bn mobile subscribers would come from emerging market countries.
In Chongqing, China, Nokia yesterday launched three new entry-level phones, aimed at customers in developing countries. First shipments of the N1112, N2310 and N2610 models are expected in the second quarter. Soren Petersen, senior vice-president, said at the launch in China: “In 2008, Nokia expects that 3bn people will be owning a mobile phone, with much of this growth coming from markets like China, India, south-east Asia and Africa, where penetration levels are still relatively low.”
Nokia has this month highlighted the growing importance of emerging markets. Yesterday's launch of the new models, all priced at below €100 ($120), followed the opening of Nokia's new plant in Chennai, India, this month, which will produce both handsets and networks.
Nokia shares surged 4.8 per cent to €17.49 in Helsinki as Mr Ollila's upgrade of Nokia's market outlook raised hopes of strong first-quarter earnings.
The acceleration of growth in the global handset market was seen to mainly benefit Nokia, the world's biggest mobile supplier.
“Nokia is the main beneficiary as it has the greatest share of the segment that is growing fastest,” said Richard Windsor, analyst at Nomura.
“It also makes a far higher return on every handset sold compared with competitors.” Confidence in Nokia's ability to tap the growth yesterday outweighed concerns about the pressure the increasing emphasis on emerging markets puts on the company's profit margins.
In the fourth quarter of last year, the average price of Nokia's handsets fell below €100 for the first time. Mr Windsor said Nokia was “clearly brimming with confidence”.
Mr Ollila's comments came as he prepares to step down as chief executive, a position he has held since 1992, when Nokia was alittle-known Finnish industrial company. Mr Ollila, who will become chairman of Royal Dutch Shell, is set to be replaced in June by Olli-Pekka Kallasvuo, currently Nokia's chief operating officer.

BYLINE: Matthew Russell Lee, Inner City Press U.N. Correspondent
UNITED NATIONS, March 30 — From Iraq's Mission to the UN, there's finally an answer to the months-old oil metering mystery. Shell has been given the contract, and it will take from one to two years to implement. How the accountability of oil flows and sales until then will be tracked has not yet been addressed, nor has why it will take two years. For an oil port in Basrah, the process will be faster, but it remains unclear which company has been awarded the work. This follows a December 2005 statement by the International Advisory and Monitoring Board for the Development Fund for Iraq that the oil metering contract had been awarded to an American firm, followed by a January 2006 IAMB statement that nothing was being done. Now named are a Dutch-based company and a “project” agreed to by the U.S. Pentagon's Project and Contracting Office, recently in the news for its dealing with Halliburton. Inner City Press has put written questions to both IAMB and Iraq's Mission to the United Nations and will report results on this site.
– Jean-Pierre Halbwachs briefing reporters on 12/28/05
In a March 22 letter provided to Inner City Press on March 30, the UN's Jean-Pierre Halbwachs was informed that – “the Iraqi Ministry of Oil has concluded an agreement with the American Project and Contracting Office (PCO) to include a project for rebuilding the metering system in the Basrah oil port of the Southern Oil State Company, as part of the other projects that are funded by the American grant to the Iraqi Ministry of Oil. This project is in progress now and is expected to be finalized by 2006. Furthermore, a preliminary agreement was reached with the Shell Group to act as a consultant to the Iraqi Ministry of Oil on matters related to metering and calibrating which would include the establishment of a measuring system for the flow of oil, gas and related products within Iraq, as well as the export and import operations. This long-term development project will be implemented in stages that may be fulfilled in one or two years.”
The term in the letter, “Southern Oil State Company,” does not result in any hits either via the Google search engine nor (Academic) Lexis. The letter is signed by Iraq's Alternate Permanent Representative to the UN Feisal Amin Al-Istrabadi, described as “an American lawyer of Iraqi origin.” Click here for his curriculum vitae, via Depaul's law school — his legal practice has been in Indiana, although the c.v. refers to hazardous chemical spills and Petroleum Marketing Marketing Act cases. Inner City Press has put written questions — for the second time — to the Iraqi mission's listed press attaché, including:
“For this [Basrah] project, to be completed by the end of this year, has a contractor been designated? PCO was in the news earlier this week with regard to their audits of Halliburton's performance (as well as Foster-Wheeler). Direct question: does the above quoted mean that Halliburton has gotten or could get this 'included' project? Secondarily, why does the nationwide oil metering contract described in the second paragraph of the letter need to take two years? And what will be done in the interim?”
The same questions have been put to the chair of IAMB, the UN's Jean-Pierre Halbwachs. Watch this space.
UN Round-up: upstairs at the UN headquarters on Thursday, Secretary-General Annan met at noon with the chairman of Turkey's Koc Holdings which holds, among other things, a joint venture with Shell and 87,000 employees, on the occasion of Koc Holdings joining the UN Global Compact. At the noon briefing, it was asked how it is decided which of the Global Compact's signatories get to meet with the Secretary-General, and whether these companies — including Koc Holdings — might take questions from the press on their adherence to the Compact's principles, including human rights, perhaps at a new Corporate Stake-Out. These questions were answered in far less than three months:
From: [ ]@un.org>
To: Matthew.Lee [at] innercitypress.com
Sent: Thu, 30 Mar 2006 14:13:44 -0500
Subject: your questions on the Global Compact
Hardly ever does the SG meet with CEOs when they sign up. Mr. Koc was one of the rare exceptions because of the significance of the company's commitment to the country as a whole (Turkey) and the broader region. Also, Koc has deep partnership relations with UN agencies in the areas of health and education. Regarding your suggestion that the CEOs signing on to the Global Compact (GC) be made available to the press… the GC’s media guy, wrote the following to me: 'I like the suggestion, but as always in these cases, I guess this is ultimately up to the CEO. I would be very open to suggest it in advance of future CEO-SG meetings. However, our experience is that these CEOs are very tightly guarded by an army of PR staff who would probably advise against it. Nevertheless, I will be more than happy to connect interested journalists with the public affairs people of the CEO prior to future meetings of this type.' If you’re still interested in talking to Mr. Koc, it's Ms. Ayse Tuba Kadiraga, Public Relations Specialist, Koç Holding A.S…. Tuba will be traveling back to Istanbul this afternoon, but can be reached tomorrow.”
To tie it all together for now, including Shell getting the oil metering contract in Iraq, Koc Holdings' oil refinery joint venture with Shell is being challenged to the EU Court of Human Rights by the union Petrol-Is. What is Koc Holdings (and Shell's and even the SG's and Global Compact's) positions on this? Questions, questions…

By THE ASSOCIATED PRESS
Published: March 30, 2006
Filed at 2:06 p.m. ET
WASHINGTON (AP) — The price of oil traded near $67 a barrel Thursday amid persistent supply disruptions in the Gulf of Mexico and Nigeria, a U.N. standoff with Iran over its nuclear program and growing demand in the U.S. despite rising energy costs.
The market was also rattled by an announcement late Wednesday from Venezuela's oil minister that Exxon Mobil Corp., the world's largest publicly traded oil company, was no longer welcome in his country — the latest sign of tighter state-control of energy around the globe.
''All of these things are adding up,'' said Antoine Halff, director of global energy at Fimat USA in New York.
Light sweet crude for May delivery rose 50 cents to $66.95 a barrel on the New York Mercantile Exchange. Brent crude for May gained 50 cents to $66.05 a barrel on London's ICE Futures exchange.
Gasoline prices rose 2.68 cents to $1.981 a gallon (3.8 liters), while heating oil futures gained 1.8 cent to $1.87 gallon. Natural gas futures climbed more than 6 cents to $7.520 per 1,000 cubic feet.
Tensions between Exxon Mobil and Venezuela boiled over because the Texas-based company resisted tax increases and contract changes that are part of a policy by President Hugo Chavez's government to ''re-nationalize'' the oil industry. Rather than submit to new terms that will turn 32 privately run oil fields over to state control, the company sold its stake in a 150,000 barrel-a-day field to its partner, Spanish-Argentine major Repsol YPF.
''Exxon Mobil … preferred to sell to Repsol, its partner in the agreement, rather than adjust,'' Oil Minister Rafael Ramirez said in an interview with the state-run TV broadcaster. ''We said we don't want them to be here then,'' Ramirez added.
On Thursday, top officials of the five permanent Security Council nations plus Germany urged Tehran to freeze uranium enrichment, but a senior Iranian envoy defiantly rejected the call, saying his country's activities were ''not reversible.''
Iran, the No. 2 oil producer in OPEC, has been referred to the U.N. Security Council over fears it may want to misuse its nuclear program to make weapons.
In the Gulf of Mexico, oil output is still down by 343,000 barrels per day because of damage that occurred during last summer's hurricanes Katrina and Rita. That is roughly 23 percent below pre-storm output levels.
Nigerian oil output also remains a concern. Royal Dutch Shell PLC, the largest foreign oil company operating in the country, has shut in nearly half of its Nigerian production and says it won't resume operations until the country is safe enough for its workers. Some 600,000 barrels per day of Nigerian production has been shut in, according to IFR Energy Services in New York.
Concern about gasoline was also affecting the market.
In its weekly petroleum report, the U.S. Energy Department said Wednesday that gasoline inventories fell by 5.4 million barrels last week to 216.2 million barrels, about even with year ago levels. The decline came as refiners conducted maintenance on their facilities ahead of summer in the Northern Hemisphere, when fuel demand peaks.
The U.S. agency also said that motor gasoline demand averaged 9.1 million barrels a day over the last four weeks, which is up 1.3 percent from a year ago. The average U.S. retail price of gasoline is $2.50 a gallon, up 34.5 cents from the year before.
Associated Press Writers Natalie Obiko Pearson in Caracas, Venezuela, and George Jahn in Vienna, Austria, contributed to this report.

By Ross Tieman
Compliance with legislation, regulations, directives and codes has never been more challenging. Though business conduct has always been constrained by law, today the volume of legislation and rules, and the pace of change, have increased so much that meeting the requirements has turned compliance into a corporate discipline in its own right.
Some company chairmen complain that compliance is distracting them from strategic management. Others shrill about the mounting costs.
This has come about because, in Europe and the US especially, legislators have taken companies to task over their behaviour. In the US the Sarbanes-Oxley Act, designed to prevent corporate scandals, has established tough new standards for company directors, while in the UK and continental Europe companies must comply with voluntary governance codes, or explain their failure to do so.
Companies operating within the European Union must also comply with a tidal wave of new pan-European directives.
All this change coincides with corporate globalisation. National industrial or services champions have been spurred by market opening into global rivalry. Today they must comply with the rules in more jurisdictions than ever before at a time when the rules almost everywhere are changing by the month.
Yet every cloud has a silver lining – for the bold. The challenge of compliance has become so great that mastering compliance has become a tool to achieve competitive advantage.
Compliance requires leadership from the top. The Combined Code on Corporate Governance, effective in the UK since 2003, gives board directors new responsibilities. The code encourages quoted companies to separate the roles of chairman and chief executive, ensure that more than half the directors are independent, and calls for committees to oversee the key functions of audit, appointments and remuneration. Its effect, increasingly, is to create a single board that combines the functions of the supervisory board and the management board common in continental Europe, obliging the freewheeling chief executive to work within a collegiate framework.
US governance laws, codified and backed by tough penalties, leave the executive chairman in charge but require the chairman and the finance director to certify a rigorous paper-trail of evidence that the company is meeting its obligations.
Can such measures deliver better corporate governance? Investors see a link between high standards of governance and corporate longevity. Think of Cadbury Schweppes, the UK chocolate and fizzy drinks company whose former chairman, Sir Adrian Cadbury, was one of the pioneers of corporate governance reform.
Shares in Shell, the Anglo-Dutch oil group, plummeted last year after it understated its oil reserves and incurred a record £17m fine from Britain’s financial and securities regulator, the Financial Services Authority. But its corporate governance reforms that followed prompted a significant re-rating by the markets.
Anthony Carey, a partner at accountant and adviser RSM Robson Rhodes responsible for board evaluation, was project director for Britain’s Turnbull working party on risk management. He says: “A strengthened selection process and improved definition by the Combined Code on Corporate Governance of the role of the non-executive director makes it easier for non-executives to constructively challenge management and also to contribute on strategic issues.”
He says boards should focus on the value that reform can deliver, and check there are key performance indicators to ensure it is achieved.
Overhauling the boards of companies takes time. Last October, the Association of British Insurers, representing many of the country’s biggest investors, analysed the annual reports of 477 UK quoted companies and found that only 46 per cent of FTSE 100 companies stated that they were fully compliant with the code.
But Peter Montagnon, the ABI’s investment director, is encouraged by that. “If companies still don’t have the right balance on the board, that doesn’t mean they aren’t seeking it,” he says.
Achieving good governance with compliance is “about strategic decision-making and management risk,” he says. “It has little to do with the mechanical implementation of a rule book.”
Directors alert to corporate governance obligations have become focused on compliance throughout their organisations.
Perhaps the biggest compliance challenge today for companies operating in Europe is to comply with the stream of directives from Brussels designed to create a single European market in financial services. The regulatory landscape has become increasingly codified and complex.
Abesh Choudhury, an associate in the London office of US law firm Cleary Gottlieb Steen & Hamilton, says: “The thrust of a lot of new regulations is to focus ultimate responsibility on senior management.”
Paul Nelson, head of the financial markets practice at law firm Linklaters, concurs. “We have seen over the past 15 years a real professionalisation of the compliance industry,” he says.
A company’s compliance director for Europe will typically be a member of its European board. And a typical European financial institution will employ 100-200 in its compliance department.
One specialist recruitment agency reckons that 2 per cent of opportunities advertised in the UK financial services industry are now in compliance. Graduates with just three years’ compliance experience are earning more than £40,000 a year, and for top posts salaries are well into six figures.
Because skilled compliance officers are in short supply, salaries soared 17 per cent last year.
No wonder that universities, working with industry, are now offering courses to fill the gap.

By Phil Manchester
The Financial Services Authority, the UK regulator, is flexing its muscles. Since 2001, when it assumed new powers under the Financial Services and Markets Act 2000, the FSA’s Enforcement Division has handed out increasingly high penalties.
In 2001-02, its first full year of operation under the new regulations, the FSA imposed fines of just over £10m. Fines rose slightly in 2002-03 and reached £12.5m in 2003-04. In 2004-05 – the latest complete year – total fines hit £22.2m and by February 2006, with two months still to go, fines for the current year stand at £16.2m.
Although the 2004-05 total was skewed by the £17m fine on oil company Shell for mis-stating its oil reserves, the trend in penalties is definitely upwards.
The increased level of fines is not, however, reflected in the number of cases the FSA has pursued.
The FSA has completed only 13 cases so far in the current year. In 2004-05, it completed 31, while in its first two years the FSA’s caseload was more than 70.
The change is the result of a deliberate policy by the FSA to pursue fewer cases – but impose higher fines. Margaret Cole, director of enforcement at the FSA, re-emphasised the change in a speech to the Securities and Investment Institute Compliance Forum in January this year.
“We will focus our enforcement activities on those areas which pose the greatest risk to our statutory objectives. We will be working very closely with the business units to ensure that our enforcement resources are deployed strategically to address cases and issues which are priorities for the FSA,” she said.
She added that this does not exclude investigation of transgressions that might lie outside the “priority strategic areas”.
The FSA has a wide brief to supervise financial dealings of companies operating in the UK, from high street financial advisers to giant corporations. Enforcement is only part of its activities, employing about 8 per cent of its 2,600 total headcount.
It is generally acknowledged that the FSA’s approach to enforcement has been successful. Headline-catching high-profile cases over the past two years such as Shell, Citigroup, Lloyds TSB and Credit Suisse First Boston International have shown the FSA to be tough on those that misbehave.
“It is certainly working – as those regulated firms and individuals who have broken the rules have found out,” says Gary Dixon, group chief executive of specialist Compliance Solutions. He goes on to say that the FSA’s broad approach to compliance means that penalties are often a last resort: “The FSA has a number of different ways of achieving its goals. If the first one does not work, then it can move on to the next one.”
Peter Bevan, a partner in the financial markets group at law firm Linklaters, says the FSA’s increased enforcement activity has led to quantifiable improvements in corporate governance:
“We have done a lot of work reviewing risk management controls and we have seen a huge amount of movement towards best practice. It is incorporating enforcement as part of its broader activities.
“Increasingly, the FSA sends in an enforcement officer as part of the team in its regular visiting programme.”
The relatively small number of penalties is, says Mr Bevan, a reflection of the industry’s positive response to compliance:
“When the FSA started in 2001, it began with a strong enforcement regime and it was assumed that it would take a lot of scalps. Although there have been some high profile cases, there have not been as many as expected.”
He goes on to say that the FSA has a unique relationship with those it supervises:
“ It is not like normal litigation because there is a continuing relationship between the FSA and the companies it supervises.”
Tim Kendal, a fraud and regulatory specialist at 2 Bedford Row, a London barristers’ chambers, agrees: “In these sort of investigations where the FSA is prosecutor and judge, they would rather deal with it administratively,” he says.
“They want to avoid legal action because, if they don’t win, the costs and the negative publicity would be destructive. There are, of course, exceptions where there could be a public interest in bringing it to court.”
Mr Kendal suggests the penalties for non-compliance could be higher – although the bad publicity is likely to be more effective in the long term.
“Although the Shell fine, for example, seems large, it’s piffling compared to those handed out in the US. Its effect on Shell is not going to amount to much. But what large corporations don’t like is the bad publicity that they are not compliant or that they may be abusing market rules.”
After only five years in its enhanced role as a “super regulator”, the FSA has shown that it can be tough on villains – whether corporate or individual.
The continued expansion of the financial sector and the prospect of further innovation in financial instruments means the FSA will face yet more challenges – and may well have to get tougher.

By Janet McBride
LONDON (Reuters) – Oil climbed further above $66 on Thursday, toward its $70 record, after Iran rejected a U.N. Security Council demand that it halt uranium enrichment.
“There's got to be a crunch point over Iran,” said Geoff Pyne, an independent oil analyst. “At the end of the day Iran is intent on uranium enrichment and the West won't allow it.”
U.S. crude (CLc1) stood at $66.58 a barrel at 1306 GMT, up 13 cents. London Brent crude (LCOc1) was up 50 cents at $66.05.
The U.N. Security Council unanimously adopted a “presidential statement” late on Wednesday calling on Iran to freeze its uranium enrichment work.
But as the five permanent Security Council members and Germany met in Berlin to discuss their next step on Thursday, Iran's ambassador to the U.N. atomic agency ruled out complying.
Oil prices touched their highest point since February 2.
In real terms oil is at levels unseen for a quarter of a century. Prices have climbed from below $20 in a four-year rally partly driven by fast-growing Chinese demand. Supply disruptions in Nigeria and Iraq have helped to fire this year's gains.
Analysts Goldman Sachs stuck to their forecast that U.S. WTI crude would average $69.50 a barrel over the rest of 2006. They noted world economic growth was on a firm footing.
“Although Goldman Sachs economists expect a slowdown in the U.S. economy in the second half of 2006, the continuing recoveries in Europe and Japan, combined with strong growth in China, should make global growth more balanced, and more sustainable into 2007,” they wrote in a research note.
NIGERIA PIPELINE RESTART
Oil has held above $60 for more than a month, partly buoyed by rebel attacks in Nigeria that have shut a quarter of oil output in the world's eighth biggest oil exporter.
Some of the lost production struggled back on Thursday when Italy's Agip (ENI.MI) lifted a force majeure on exports from its Brass terminal after repairing a sabotaged pipeline, a shipping agent said.
Attackers blew up the Tebidaba-Brass pipeline on March 17, forcing Agip to shut 75,000 barrels per day oil production and causing a spill. Some 455,000 bpd of Royal Dutch Shell (RDSa.L) production remains closed, however.
U.S. GASOLINE
With so many question marks over supplies, the market is extremely sensitive to demand data. The United States, which uses over 40 percent of the world's gasoline, reported a sharp 5.4 million-barrel drop in weekly stocks on Wednesday.
“We continue to believe gasoline stocks will tighten further in coming weeks,” said Citigroup analysts in a note.
Analysts at BNP Paribas agreed.
“The gasoline market will still be tight over the summer. Last year refineries had to run at high rates of capacity utilisation to meet demand and a similar outcome is likely this year. This should provide support for the WTI price right through the year,” they said.
(additional reporting by Neil Chatterjee in Singapore)

This Day (Lagos)
March 30, 2006
Posted to the web March 30, 2006
John Iwori
Port Harcourt
As the oil spill in Kegbara Dere community in Gokana Local Government area of Rivers State continues to generate ripples, the state government has ruled out sabotage, saying Shell made frantic efforts to contain its spread.
Making the position of the state government known in an interview with newsmen yesterday, Commissioner of Environment, Dr Roselyn Konya, said the spill was as a result of aged pipes used by the multinational oil company several years ago.
According to Konya, all environmental regulatory bodies, both federal and state, have confirmed that the spill did not result from sabotage or vandalism.
The spill, which flowed between Friday and Sunday, affected Kpor, Mogho, K-Dere, B-Dere and Bara communities.
The commissioner said not less than 1,000 barrels of oil was lost to the spill, adding that the state government had ordered the owner of the pipes, Shell Petroleum Development Company (SPDC), to go to the site and start cleaning the spill.
According to her, the pipe that spilled oil had undergone repairs last year, adding, “after the repairs, we felt that there may not be any other disaster in the area.”
While expressing regrets that the spillage had caused a lot of damage to both crops and soil in the area, he said the state government has promised to send relief materials to victims of the spillage.
The state Governor, Peter Odili, visited the spill site on Monday and promised that the victims would be well compensated, and immediately ordered Ministry of Environment to get the list of those that have farmlands in the spill area.

12:42 | 30/ 03/ 2006
MOSCOW, March 30 (RIA Novosti) – Russia is expected to build four vessels to deliver oil and gas under the Sakhalin II energy project being implemented on Russia's Far Eastern island, the project operator said Thursday.
The shipyard based in St. Petersburg, Russia's second biggest city, will build two ice-breaking tankers, and a shipbuilding plant in Primorye Territory in the Far East two more vessels under a 15-year contract between Sakhalin Energy and a Russian-operating affiliate of A.P. Moller-Maersk group, which runs about 1,000 vessels and drilling platforms across the world.
Sakhalin Energy, a Dutch-British-Japanese venture that is developing two vast fields with estimated recoverable reserves of 150 million metric tons of oil and 500 billion cubic meters of gas on Sakhalin, is expected to receive six vessels from the group in 2007. They will operate under the Russian flag and cost some $140 million overall.
Sakhalin Energy, which is also building an oil terminal and a liquefied gas plant, the first one in Russia, will use the four vessels to deliver oil and liquefied gas to foreign consumers from the southern Aniva Bay.
The vessels' overall towing capacity is at least 70 metric tons. They will be fitted out with equipment to contain oil spills and fire-fighting devices. Each vessel will be operated by six-member Russian crews.
Sakhalin Energy, owned by Royal Dutch/Shell (55%) and Japan's Mitsui (25%) and Mitsubishi (20%), is working in Russia under a production sharing agreement that gives the company major tax breaks in exchange for a certain share of the output. The project, which is being implemented in difficult climatic conditions, has been complicated by environmental obstacles and repeated spending delays on the part of the Russian authorities.

Lower-than-expected oil supply figures and renewed speculation of a bid for BG pushed London's oil stocks and the FTSE 100 higher.
Strong trading in the oil majors underpinned a rise of 23.5 to 5959.2 in the blue chip index, offsetting falls for 40pc of the constituents.
BG headed the top flight throughout the day, closing up 30½ – or 4pc – at 734p. The rise followed renewed talk of a bid from Exxon Mobil at 950p a share and came despite the shares going ex-dividend. Exxon Mobil was not available for comment and BG declined to talk about the speculation.
Royal Dutch Shell, BP and Cairn Energy all responded positively, climbing 19p to £18.63, 5½ to 668½p and 25p to £21.60 respectively. The shares were also boosted by oil inventories data from the US Department of Energy showing that motor gasoline stocks had fallen by 5.4m barrels.
Angus Campbell, of spread betting firm Finspreads, said: “The rally was very much down to energy. The strengthening oil prices in the last few days has also driven the oil stocks higher.”
Elsewhere, investors welcomed better than expected, fourth-quarter figures from supermarket group J Sainsbury, showing a 5.3pc increase in like-for-like sales.
Steve Davies, of Numis, said: “In our view, Sainsbury's is very much in the sweet spot of food retailing at the moment.”
Sainsbury's shares rose 5¼ to 332¼p. Other top risers included Intercontinental Hotels Group, up 27½ to 928p, after UBS analysts upgraded the stock from “neutral” to “buy” and its target price from 930p to £11.30.
Vodafone regained some of Tuesday's losses, putting on 2½ to 122p after investors reconsidered the impact of European Commission proposals to cut roaming rates by up to 60pc.
Dresdner Kleinwort Wasserstein said Tuesday's 4pc drop in Vodafone shares showed the market “over reacted”. “We recognise the negatives of roaming regulation for operators. However, we also believe that roaming rate reductions should also lead to greater usage amongst non-business users.”
BAA rose 11½ to 838½p after a spokesman for Spain's Grupo Ferrovial SA said it was still considering all of its options with regards to acquiring the airport group.
On the downside, Scottish & Newcastle, one of a number of stocks to go ex-dividend, was the biggest blue chip faller, down 17 to 528p. Others included Amvescap, 5½ lower at 545p and BSkyB, down 2½ at 540½p.
Standard Chartered Bank said it was seeking merger and acquisition activities in Taiwan and other areas in the Asia Pacific but the news failed to help the shares, which fell a further 25 to £14.57 on fading hopes of a bid from Singapore's Temasek.
However, continued bid speculation lifted Royal Bank of Scotland 12p to £18.52 and Alliance & Leicester 11p to £11.90. Market rumours suggested Alliance & Leicester had already been approached about a bid. Spanish bank Banco Santander SA was considered as a potential suitor, along with France's Credit Agricole. Alliance & Leicester would not comment.
RBS was linked with a possible bit from Citigroup. But a source close to the situation said senior management at Citigroup had made it clear they were not in the mood for a transformational acquisition.
RBS made no comment. Citigroup was not available for comment.
Copper miner Kazakhmys shed much of its recent rise, dropping 8½ to 953½p. Analysts predicted yesterday that full-year pre-tax profits, buoyed by higher copper prices, would be 31pc better at $565m (£326m).
Troubled retailer Woolworths said like-for-like annual sales had fallen 4pc and warned of “tough trading conditions” in the year ahead. But its shares rose slightly to 35¼p.
The FTSE 250 rose 4.7 to 9820.8. Brit Insurance Holdings, the Lloyd's of London insurer, topped the mid-line risers list, adding 7p – or 8pc – to 98p after the High Court cleared plans to move £180m from the share premium account to distributable reserves.
Hikma Pharmaceuticals ticked up 18 to 408p after the Jordanian generic drug maker topped expectations with a 9pc rise in full-year profits to $64.4m pre-tax.
In other trading, Isoft, the software group, slumped 27¾ – or 16pc – to 148½p, after Accenture said it would take a $450m hit on a contract to update computer systems in the NHS, partly blaming delays in software delivery from Isoft.
Dairy Crest rose 6¾ to 481½p after it said strong sales of branded products such as Cathedral City cheese had helped it to offset oil-related cost rises.