Posts from ‘May, 2006’

CALGARY, Alberta (Reuters) – Western Oil Sands Inc. (WTO.TO: Quote), whose sole business is a stake in a Canadian oil sands project, said on Tuesday it will explore for oil in Iraq’s Kurdistan region.

The Calgary-based firm said its WesternZagros Ltd. unit has signed a exploration and production sharing agreement (EPSA) with the Kurdistan Regional Government, Sulamaniyah Administration.

“We believe this EPSA is an early-entry opportunity into a highly prospective area and, subject to exploration success, could provide Western with an additional world-class asset,” Jim Houck, chief executive of Western Oil Sands, said in a statement.

Western, which owns a 20 percent stake in the Athabasca oil sands project operated by Shell Canada Ltd. (SHC.TO: Quote), said it has agreed to spend at least $45 million over four years exploring in what it called the Zagros Fold Belt of Kurdistan in Northern Iraq. an area the company said was under-explored.

Western said the agreement must be passed into law, which it expects to occur “in the coming months.”

A California state appeals court ruled in favor of the Electronic Frontier Foundation’s (EFF’s) petition on behalf of three online journalists Friday, holding that the online journalists have the same right to protect the confidentiality of their sources as offline reporters do.A California state appeals court ruled in favor of the Electronic Frontier Foundation’s (EFF’s) petition on behalf of three online journalists Friday, holding that the online journalists have the same right to protect the confidentiality of their sources as offline reporters do.”Today’s decision is a victory for the rights of journalists, whether online or offline, and for the public at large,” said EFF Staff Attorney Kurt Opsahl, who argued the case before the appeals court last month. “The court has upheld the strong protections for the free flow of information to the press, and from the press to the public.”
Full story, For the full decision in the case [PDF], For more on Apple v. Does

30 May 2006

Online journalists have the same rights as traditional reporters, a Californian court has ruled.

The decision was made in a case brought by Apple against a number of reporters who published information online about a future Apple product launch.

Apple filed the lawsuit to find out the source of the reporter’s information.

But judges said that online journalists have the same right to protect the confidentiality of their sources as offline media.

“Today’s decision is a victory for the rights of journalists, whether online or offline, and for the public at large,” said Attorney Kurt Opsahl of the Electronic Frontier Foundation (EFF), a digital rights organisation who have been defending the journalists.

Unlawful

The case began when Apple sued a number of unknown individuals, or “John Does”, who leaked information about the launch of a FireWire audio interface for the Mac music program Garage Band.

Details of the release were published on news sites PowerPage and Apple Insider.

Apple argued that as the leaked information was confidential, the publishers of the site had to reveal their sources.

The judges presiding over the case disagreed.

“We decline the implicit invitation to embroil ourselves in questions of what constitutes ‘legitimate journalism’,” they said.

“We can think of no workable test or principle that would distinguish ‘legitimate’ from ‘illegitimate’ news,” they concluded.

The online journalists are protected by California’s Shield Law, as well as the country’s constitution, said the judges.

In an attempt to uncover the source of the leak Apple had also subpoenaed Nfox.com, the e-mail service provider for PowerPage, to hand over messages that may identify the leak.

However the judges ruled that the subpoena was unlawful.

It is not known whether Apple plan to appeal against the decision.

Judge overturns AppleInsider and PowerPage rulings

Tom Sanders in California,
30 May 2006

California judge has ruled against Apple’s request to force several bloggers to reveal the sources of confidential information leaks. The ruling overturned an earlier verdict in Apple’s favour.

Apple had alleged that AppleInsider and PowerPage had violated its trade secrets.

Both websites published information in 2004 about a product codenamed Asteroid or Q97, a forthcoming application that would allow users to record analogue audio within Apple’s GarageBand software.

The computer maker argued that the importance of its trade secrets overruled the authors’ rights to protect their sources because the information leak amounted to theft.

Apple also insisted that the publication of such material does not serve the public interest.

In an apparent reference to the WorldCom and Enron scandals, Judge James Kleinberg said: “Business entities may adopt secret practices that threaten not only their own survival and the investments of their shareholders, but the welfare of a whole industry.

“Labelling such matters ‘confidential’ and ‘proprietary’ cannot drain them of compelling public interest.”

Although the ruling stated that several other factors in the case justified a forced disclosure, it found that the public interest outweighed those arguments.

“Today’s decision is a victory for the rights of journalists, whether online or offline, and for the public at large,” said Kurt Opsahl, a staff attorney with the Electronic Frontier Foundation, who argued the case before the appeals court last month.

“The court has upheld the strong protections for the free flow of information to the press, and from the press to the public.”

Martin Lynch,
30 May 2006

Apple’s attempts to force an online technology news site to reveal its source have been blocked by a US State appeals court.

Apple had initially been granted permission to subpoena the email records of Apple insider and another site Powerpage.org in order to ferret out a mole that had leaked product information.

However, the three-judge State of California Court of Appeal was far less impressed with Apple’s tactics.

They overturned the earlier judgement claiming Apple failed to undermine the journalistic status of bloggers and chastised the company for bringing any of it to court before conducting a thorough internal search for the leak.

One of the judges claimed all Apple wanted ‘the name of the snitch’, while others questioned the value of technology revealed by the bloggers – an interface box for hooking up a guitar to a computer.

Kurt Opsahl, a staff attorney for the Electronic Frontier Foundation, said: ‘The decision is a victory for the rights of journalists, whether online or offline, and for the public at large. The court has upheld the strong protections for the free flow of information to the press, and from the press to the public.’

By Tim Molloy
Associated Press

LOS ANGELES — Tempers are rising along with gas prices. Gas stations across the country report that drivers are taking out their gas rage against big oil by yelling at clerks and cashiers and sometimes driving off without paying.
 
“Everyone is suffering at the same time,” said Sam Shirazie, a clerk at a Chevron station east of downtown Los Angeles.

No detailed statistics are kept on incidents of gas rage. But the National Association of Convenience Stores said anecdotal evidence indicates they have increased since prices began climbing in February.

Employees of Fleming Corp., which operates 14 gas stations in Kansas and Missouri, have heard everything from “just a mumble-grumble kind of thing to a cheap shot or blaming the clerk for world oil prices,” owner Ed Roitz said.

Division manager Ron Davis hears complaints firsthand.”I don’t want to repeat some of it. They’ll talk about the blankety-blank oil companies.”

The convenience stores association advises store owners to ensure that employees understand the costs associated with gas and encourages them to explain to customers that in some cases they aren’t making any profits despite the soaring price of fuel. Retailers make about two-thirds of their profits from items inside the store, he said.

Steve Grosse is trying humor. At his Shell station in Manhattan Beach, he replaced the price of gas with the words “arm,” “leg” and “first born.”

In Los Angeles, Chevron station co-owner Anthony Sinai has started giving free sodas to customers who pump $20 worth of gas. He wants to avoid a repeat of an incident last year when an upset customer threw a cup of coffee at a female clerk.

Copyright 2006 IndyStar.com. All rights reserved

May 30, 2006
 
SYDNEY (XFN-ASIA) – Royal Dutch Shell group and mining giant Anglo American Corp have formed an alliance that may result in the 5 bln aud Monash synthetic diesel and electricity project being developed in the Australian state of Victoria, the Age newspaper reported, citing the companies.

Shell and Anglo have formed the global alliance to pursue “clean”, coal-converting energy opportunities and have nominated the Monash project as their leading candidate, the daily said.

Formation of the alliance comes ahead of an expected mid-year decision to first build a 300-400 mln aud demonstration plant for the Monash project.

It is promoted as “clean” energy because carbon dioxide emissions are to be captured for injection into the nearby exhausted Bass Strait gas reservoirs.

If the process is viable, the Age said a 5 bln aud energy complex could be built within a decade.

Its production of more than 60,000 barrels a day of diesel and other liquids would be bigger than the fast-falling liquids production from the Exxon Mobil/BHP Billiton Bass Strait oil and gas fields of 50,000 barrels a day.

The Monash project envisages a new coal mine, drying and gasification plant, carbon dioxide capture and storage, and a gas-to-liquids plant with associated power generation.

(1 usd = 1.31 aud)

bruce.hextall@xfn.com

blh/mas
 

By Christopher Brown-Humesin Stockholm
Published: May 30 2006 03:00 | Last updated: May 30 2006 03:00

Talk about a hard act tofollow. When Olli-Pekka Kallasvuo takes over as chief executive of Nokia on Thursday, he will be stepping into the shoes of Jorma Ollila, who over 14 years built the company into the world’s leading maker of mobile phones, a man repeatedly hailed as one of Europe’s top businessmen.

Not that 52-year-old Mr Kallasvuo appears daunted. “Mr Ollila is a hard act to follow. But I am not looking back, I am looking forward to the tasks and challenges ahead,” he tells the FT.

After 25 years at Nokia, Mr Kallasvuo has the right background for the job. He has been the head of the group’s US operations, its chief financial officer and was most recently in charge of its mobile phone business.

He has been a member of Nokia’s inner circle, known as “Jorma’s Gang”, since the late 1980s. Apart from Mr Ollila – who is joining Shell as non-executive chairman and takes the same position at Nokia on Thursday – Mr Kallasvuo is the only member of Jorma’s Gang still at the company.

The handover comes as Nokia is performing well again.

Its fortunes plunged in 2004 after it failed to spot key market trends, including the move towards clamshell phones.

First-quarter net profits this year were up 21 per cent, after a 29 per cent rise in sales to €9.5bn ($12.1bn), and the company’s global market share rose three percentage points to 35 per cent.

Mr Kallasvuo played a key role in the revival.

Nokia’s handset portfolio has improved and it has exploited the trend towards cheap phones in emerging markets while he has been in charge of mobiles.

“Mr Kallasvuo has become increasingly well regarded,” says Tim Boddy, analyst at Goldman Sachs.

“He has broadened the product portfolio, improved relations with operators and increased the emphasis on design, as opposed to cost-efficiency, in the manufacturing process,”

Mr Kallasvuo says Nokia must remain a growth company. That strategy is easier when the global handset industry is growing rapidly as now. The overall market will grow by at least 15 per cent this year to around 914m handsets, Nokia predicts.

But things will be harder when the market slows and as handsets become more commoditised.

It could also involve delicate trade-offs between market share and margins. Not that Mr Kallasvuo sees it this way. “I will put equal emphasis on market share and margins. The two need to be balanced.”

Mr Kallasvuo repeatedly uses the word “convergence” when discussing his challenges.

“We are expanding from traditional mobile phone telephony. Now we are talking about the convergence of the internet, mobility, IT and music.”

That means Nokia’s competitors will not just be the traditional handset makers, like Motorola, Samsung and SonyEricsson, but IT, software and entertainment companies. And that poses challenges about how and where Nokia expands.

Under Mr Ollila, Nokia’s growth was achieved almost entirely organically. But Mr Kallasvuo suggests Nokia will need to make acquisitions and partnerships to bolster specific areas of competence or develop new areas. “In a situation where the business environment is getting more complex, a pragmatic look at partnerships and acquisitions will be necessary,” he says.

The company could make some big moves if it wanted to – it has €9bn of cash on its balance sheet.

“They need to consider whether to buy a wireline operation to enhance their networks business, given the convergence between wireless and wireline,” says Goldman’s Tim Boddy. Nokia’s enterprise division might also see some acquisitions, he believes.

Mr Kallasvuo is determined to enhance Nokia’s brand, ranked sixth in the world by Interbrand behind companies like Coca-Cola and Microsoft.

“I really believe we have the opportunity to make Nokia the most loved and admired brand in the world,” he says.

The seriousness of this drive is reflected in the appointment of Keith Pardy, a former Coca-Cola executive, as head of strategic marketing. The company has also started rolling out branded stores across major cities, starting with Moscow.

Mr Kallasvuo, known internally as OPK, is not regarded as having the smooth communication skills of his predecessor. “Kallasvuo is more laconic than Ollila and probably a bit blunter sometimes,” says Per Lindberg at Dresdner Kleinwort Wasserstein.

Karri Rinta, analyst at Nordea in Helsinki, describes Mr Kallasvuo’s presentational style as “no-nonsense, stick-to-the-facts”. He says the appointment represents stability and continuity, and is a message from Nokia that no dramatic changes in strategy or focus are needed.

Mr Kallasvuo suffered unwelcome publicity earlier this year when it emerged that he had been fined €31,000 for a minor tax fraud after failing to declare €11,000 worth of imported goods on arrival in Helsinki from Switzerland. In Finland, the size of fines are linked to income.

“It’s been extensively covered and I don’t have any comment on it,” he says.

Mr Ollila will be there in the background, working one or two days a week as non-executive chairman.

It is a partnership that has worked well, and not just at work.

Both keen tennis players, they have played on the same side at doubles – and never lost, according to Mr Kallasvuo. They have yet to play each other at singles.

Published: May 30 2006 03:00 | Last updated: May 30 2006 03:00

There are many reasons to express doubts about the move by Arcelor, the Luxembourg-based steel group, to buy Severstal of Russia in order to sidestep the hostile bid by Mittal Steel. One is the way the Arcelor board is presenting the takeover as a done deal, which only an absolute majority of all shareholders will be able to reject. A second is the opportunity for yet another oligarch’s fortune to leave Russia, with Alexei Mordashov picking up nearly one-third of Arcelor in return for his90 per cent of Severstal.
But the reason to welcome this deal, which will have been cleared in advance with the Kremlin, is that Vladimir Putin, the president, is evidently showing none of the neurosis about one of his country’s top two steelmakers coming under foreign control that he displays about foreign ownership in Russia’s energy sector. If only his evidently relaxed view on Severstal could become the template for a more general Russian openness to foreign investment. But only last week, at his summit with the European Union, Mr Putin was touchily describing the energy sector as “the holy of holies of our economy” and demanding reciprocity for any EU investment in it.

This touchiness was underlined last week by a report from the Academy of Natural Science that got some support from Moscow’s natural resources ministry. This called for Russia to renegotiate its production-sharing agreements with foreign oil companies to giveRussian companies more of a role in the two offshore projects at Sakhalin and one in northern Russia. In fact, the ministry’s support for renegotiation was then firmly overruled by the senior energy minister, Viktor Khristenko, who said Russia would stick to the PSA terms. Nonetheless, these deals are causing growing Russian frustration. As their name suggests, PSAs allow foreign companies to sidestep the regular tax system and to pay the government out of shared oil or gas production, but only after the companies have recovered all their development costs. Therefore, in the case of Sakhalin 2, where Shell has incurred enormous cost overruns, Moscow is understandably concerned at seeing the prospect of payment receding into the future.

Yet the price of contract sanctity is something the Russian government can pay, because with only three PSAs ever granted the problem is essentially limited. It is also something it must pay in order to avoid further damage to a contractual reputation badly dented by its savage victimisation and break-up of the Yukos oil group of Mikhail Khodorkovsky, now in a Siberian jail.

A big chunk of Yukos was snapped up by state-owned Rosneft. The government intends to sell Rosneft shares on western exchanges this summer, but some western investors have called for a boycott of what is seen as the resale of stolen property. In these circumstances, Moscow cannot afford not to honour the PSAs

By Tom Mitchell in Daya Bay
Published: May 30 2006 01:39 | Last updated: May 30 2006 01:39

South China’s first industrial revolution bypassed Donglian, a poor village on the picturesque shores of Daya Bay. The factory sprawl that raced through Guangdong province’s manufacturing heartland in the 1980s and 1990s never reached this corner of the Pearl River delta, 80km north-east of Hong Kong. Even as the 20th century gave way to the 21st, Donglian’s residents still used water buffalo to plough their rice paddies.
 
Then Guangdong’s second industrial revolution landed right on top of Donglian in the form of CNOOC and Shell Petrochemicals Company (CSPC) – Royal Dutch Shell’s $4.3bn (€3.4bn, £2.3bn) petrochemical joint venture with offshore oil producer CNOOC. Donglian’s ramshackle concrete and brick dwellings were razed, its wooded hills flattened and ancestral graves transplanted.

The village’s 5,000 residents, declining the offer of two nearby sites, decamped to a resettlement village on the outskirts of an inland township where they could trade in their rural residency permits for coveted urban ones.

Daya Bay is one of two epicentres – along with Nansha district in Guangzhou, the provincial capital – in an industrial transformation that is changing the face of the world’s workshop.

For 20 years the Pearl River delta’s economy was dominated by export-oriented consumer goods factories reliant on the outside world and other regions of China for supplies of plastics, steel and other raw materials. Yet in the space of five short years, the region has built a range of heavy industries to complement its light industrial base.

Next to CSPC, whose enormous jungle of pipes and reactors cover an area equal to about 500 football fields, a similar expanse of flattened land has been prepared for the construction of a $2.3bn oil refinery, which CNOOC expects to complete in 2008.

Shell’s 50 per cent stake in CSPC is easily its largest commitment in China, where it has invested $3.5bn. For the past 14 years, Shell has been in on-off talks with CNOOC about investing in the refinery as well.

When CNOOC’s refinery is completed, Jean-Louis Bilhou, CSPC’s manufacturing director, says Daya Bay’s petrochemical infrastructure will rival that of much more famous refining cities such as Houston and Singapore.

From its core cracker, China’s second largest with annual capacity of 800,000 tonnes of ethylene and 430,000 tonnes of propylene, each year Shell will produce as much as 2.3m tonnes of derivative chemicals necessary to manufacture everything from guitar strings to teddy bears.

According to Simon Lam, CSPC’s chief executive, this “cracker plus one” production strategy will target manufacturing customers in Guangdong, who are expected to take up more than half of CSPC’s output.

“That’s why the government was so excited [about this investment],” adds Lim Haw Kuang, Shell’s executive chairman for China. “We’ve built the base.”

Besides Shell, the Pearl River delta’s rapid ascent of the industrial value chain has been aided by other companies from the home of the world’s first industrial revolution – the UK – and also Asia’s reigning industrial giant, Japan.

Last Friday in Shenzhen, the special economic zone bordering Hong Kong to the north, an LNG terminal built by BP and CNOOC took its first gas delivery from Australia’s north-west shelf.

Elsewhere in the Pearl River delta, BP has built the world’s largest PTA (purified terephthalic acid) plant in the Zhuhai special economic zone – and also operates an oil and chemical products terminal at Nansha, a district in southern Guangzhou and the second plank in Guangdong’s heavy industrial development strategy.

After the runaway success of Honda’s Guangzhou car factory – the company has since built a second one for exports and single-handedly turned the city into a major automotive centre – Guangdong’s capital embarked on the wholesale expansion of its steel plants, shipyards, port infrastructure and other heavy industries by moving them from the city centre to Nansha.

For good measure Toyota has also decided to build a car plant there.

To facilitate these investments, Guangzhou has rammed a new eight-lane highway and massive power pylons through 70km of countryside to Nansha.

On one recent weekday afternoon Guangzhou’s new Nansha expressway was eerily devoid of traffic. Every evening CSPC’s plant lights up like Christmas on the still placid shores of Daya Bay.

Both stand as monuments to the region’s determination to will, almost overnight, a heavy industrial infrastructure into being.