July 6th, 2006:

From The Times July 07, 2006
By Carl Mortished, International Business Editor
 
SHELL is facing a cost explosion in the expansion of the Athabasca Oil Sands Project, a mining venture that extracts oil from bitumen deposits in the Canadian province of Alberta.

The first phase of expansion, intended to add 100,000 barrels daily to the current 155,000 barrel per day output was budgeted at C$7.3 billion (£3.6 billion) only a year ago. It is now expected to cost as much as C$11 billion, according to estimates published by Western Oil Sands, Shell’s partner in the project. 
 
Shell Canada said yesterday that it was conducting an assurance review of the project’s cost, pending a final investment decision later this year. Planned in three phases, the Athabasca expansion is intended to raise output to 500,000 bpd, and represents a large part of Shell’s oil production ambitions. read more

FROM REUTERS
By Scott Haggett

CALGARY, Alberta, July 6 (Reuters) – Developers of northern Alberta’s huge oil-sands reserves may have to rework or delay their projects to avoid massive cost overruns, industry watchers said on Thursday, after Shell Canada Ltd. said expanding the Athabasca Oil Sands Project would cost billions of dollars more than earlier estimates.

Western Oil Sands Inc. , which owns 20 percent of Shell Canada’s oil sands project, said late on Wednesday that a planned expansion of the mine and upgrading refinery could cost close to C$11 billion, 50 percent more than estimated just a year ago. read more

Posted online 6th July 2006

BBC Radio: Shell ‘ignored accident warning’

14 June 2006 Broadcast

A senior maintenance engineer criticises Shell for ignoring a safety review which might have saved the lives of two oil workers.

BBC Narrator:

With over 25 years experience in the oil industry Bill Campbell was one of Shell’s senior maintenance engineers.

In 1999 he was asked to lead a safety review of seven Shell platforms in the North Sea including Brent Bravo.

What he found left him with a sense of impending doom. read more

Thursday, July 06, 2006 09:32:32 AM

Nigerian police said a Dutch oil worker was kidnapped by armed men Thursday morning from a Royal Dutch Shell gas plant, the latest in a spate of hostage-taking in the country’s oil-rich southern delta.

Hafiz Ringim, police commissioner for Bayelsa state, said Thursday’s kidnappers arrived at the Shell plant in speedboats and took hostage an expatriate working for Westminster Dredging, a contractor to Royal Dutch Shell PLC. The plant is located outside of Yenagoa, the regional capital. read more

From Reuters

Thu Jul 6, 2006 5:23am ET

SINGAPORE, July 6 (Reuters) – Royal Dutch Shell (RDSa.L: Quote, Profile, Research), the world’s top marketer of biofuels, considers using food crops to make biofuels “morally inappropriate” as long as there are people in the world who are starving, an executive said on Thursday.

Eric G Holthusen, Fuels Technology Manager Asia/Pacific, said the company’s research unit, Shell Global Solutions, has developed alternative fuels from renewable resources that use wood chips and plant waste rather than food crops that are typically used to make the fuels. read more

From Trade Arabia/Reuters

Expensive oil and big new projects have boosted the value of international energy firms’ stake in the Middle East, but they must still battle for access to the region’s reserves, consultancy Wood Mackenzie said.

Overall asset values have been increased by around 87 per cent as major projects have been approved in Qatar, Abu Dhabi and Oman.

Other projects have stalled over political difficulties and international companies have access to less than 10 percent of the region’s oil and gas reserves. read more

FROM THE WASHINGTON POST

By Christian Lowe and Mark Trevelyan
Reuters
Thursday, July 6, 2006; 2:16 AM

MOSCOW/BERLIN (Reuters) – Group of Eight leaders meeting in Russia this month will back a proposal by Moscow to get business more actively involved in the fight against terrorism, European diplomats say.

But the call will be couched in vague language after a tricky negotiation process reflecting the gulf between the Kremlin’s domineering relationship with Russian businesses and the hands-off approach of its G8 partners.
 
“You and we are natural partners in the fight against terrorism and today we would like to look at how we can maximize our joint capabilities more effectively and with greater coordination,” Foreign Minister Sergei Lavrov told Russian businesses last month. read more

FROM THE WALL STREET JOURNAL
By GUY CHAZAN and GREGORY L. WHITE
July 6, 2006; Page A4

MOSCOW — When President Vladimir Putin hosts the Group of Eight leading nations in St. Petersburg next week, he is expected to sign an energy action plan bristling with pro-market rhetoric about improving the investment climate, encouraging competition and increasing access to energy markets.

But in recent months, Moscow has imposed strict restrictions on foreign investment in its oil and gas fields while entrenching the dominance of big state-owned monopolies like natural-gas giant OAO Gazprom. read more

From Stockhouse.ca
 
7/5/2006      
 
CALGARY, Jul 5, 2006 (Canada NewsWire via COMTEX News Network) —

Shell Canada Limited provides the following update on expansion plans for the Athabasca Oil Sands Project (AOSP):

AOSP Expansion 1

Shell Canada is the majority owner of the Athabasca Oil Sands Project (AOSP), which is currently designed to produce 155,000 barrels of bitumen per day. Shell Canada’s surrounding acreage could support production expansion to more than 500,000 barrels of bitumen per day, and the Company is planning a series of expansions over the next decade to reach that long-term production goal. The AOSP Expansion 1 will add approximately 100,000 barrels per day of capacity, and lay down associated infrastructure foundations for subsequent expansion phases. Plans for AOSP Expansion 1 include expansion of both the existing Muskeg River Mine and the Scotford Upgrader. read more

From Reuters

TORONTO (Reuters) – Shell Canada Ltd.’s C$7.3 billion ($6.6 billion) Athabasca oil sands expansion in northern Alberta is facing massive expense overruns, with one of partners in the project saying on Wednesday that capital costs of a “fully integrated expansion” could be about 50 percent higher than those anticipated last year.

Western Oil Sands , which owns a 20 percent stake in the project and made the overrun estimate, also said it now expects production to begin sometimes 2010. The fourth quarter of 2009 or the first quarter of 2010 had earlier been targeted. read more

From Convenience Store News

HOUSTON — Just one week after announcing the sale of 29 locations in Ohio, Shell Oil Products reported that it has sold another 31 sites in the Buckeye State to Gilligan Oil Company LLC, an Ohio-based wholesaler. Gilligan also assumed an additional 10 fuel supply contracts in the same transaction.

Residents in the Cincinnati, Ohio region will continue to see the Shell banner as the company transitions the 41 branded sites to Gilligan. The sites were offered for bid last year with a number of parties participating. read more

From Lloyds List
Published: Jul 06, 2006

ONGC, private sector explorer Reliance Industries and international oil majors Shell and British Gas have all been asked by the Indian government to relinquish their rights over ten blocks in the natural gas rich Krishna-Godavari basin in Andhra Pradesh, on the eastern Indian coast, writes Shirish Nadkarni in Mumbai.

The government has decided to take back these blocks, which were given in the late-1990s on a nomination basis in the days before the New Exploration Licensing Policy; and put them up for sale under the sixth round. read more

By: TERRY MACALISTER, The Guardian – United Kingdom
Published: Jul 06, 2006

D1 Oils, the start-up company hoping to develop biodiesel from the jatropha plant, is in takeover talks – the latest signal that alternative energy has become a sought-after sector.

Shares in the company rose 10% to 304p yesterday – on top of a 7% increase the day before – amid speculation that a large oil company had declared its interest in the firm.

A formal statement from D1 said talks were at a “very preliminary” stage and could lead to an an unnamed suitor making an offer for – or taking a major shareholding in – the London-based group. read more

FROM THE FINANCIAL TIMES
Published: July 6 2006 03:00 | Last updated: July 6 2006 03:00

*Aims to raise $10bn (£5.4bn) to $11.7bn in London and Moscow listings. At least a third of the offering in Moscow

*Shares priced at $5.85 to $7.85 a share, valuing company at between $60bn and $80bn

*IPO to be the largest from Russia and the biggest in London this year. In London, it will be listed through Global Depository Receipts

*Rosneft will have the second- largest proved reserves of any listed company

*Part of the money raised will be used to repay $7.5bn of debt that Rosneftegaz, the state entity that owns Rosneft, raised to buy 10.7 per cent of Gazprom read more

From MarketWatch

(Updates with Western Oil Sands’s estimate for higher cost; adds details throughout.)
CALGARY (MarketWatch) — Shell Canada’s (SHC.T) C$7.3 billion ($6.57 billion) plan to expand its 155,000 barrel-a-day Athabasca Oil Sands Project, or AOSP, could cost 50% more than previously expected, according to one of the companies involved in the project.

In a press release, Western Oil Sands (WTO.T), which owns a 20% stake in the AOSP, said that “preliminary estimates indicate a potential increase in capital costs… of approximately 50% higher than those anticipated last year.” read more