September 23rd, 2006:

THE move by Russia’s Natural Resources Ministry to cancel its approval of the environmental endorsement of Sakhalin 2 was met with a wave of concern from politicians both in the East and West, writes Valdimir Afanasiev.

The European Commission said it was taking Russia’s withdrawal of the permits “very seriously” and called on Moscow to guarantee a secure and predictable investment climate.

EU Energy Commissioner Andris Piebalgs called on Russia to make its rules clear.”In order to ensure that companies are willing to invest in multi-billion euro energy projects, a secure and predictable investment climate is necessary in Russia as in the EU or indeed any country,” he said. “Without this, investment in new energy projects will be highly problematic, providing uncertainties for the world’s future energy supply.” read more

By David R. Sands
September 23, 2006

The State Department yesterday sharply criticized a recent move by the Russian government to curb a major Western oil-and-gas-investment project in Siberia, saying it put in doubt Moscow’s willingness to honor major energy deals with foreign investors.

Spokesman Tom Casey said the Bush administration was “very concerned” by a Russian government move earlier this week to revoke the environmental permits for a $20 billion liquefied natural gas project being developed by the Royal Dutch Shell Group and two Japanese investment houses on Sakhalin Island. read more

EXTRACT: Part of the aim of the meeting will be to ease worries over energy security which have resurfaced in a standoff with Western oil companies over huge oil and gas projects in Russia’s remote Sakhalin region. Russia, which caused deep alarm in Europe last winter by cutting off gas supplies to Ukraine, has pressured oil groups such as Royal Dutch Shell and Exxon Mobil to gain a greater share of the Sakhalin revenues.

THE ARTICLE

Created: 23.09.2006 14:20 MSK (GMT +3)

The leaders of France, Germany and Russia met in an 18th century chateau near Paris on Saturday with Western worries about energy security high on the agenda, Reuters correspondents report from France. read more

By Carl Mortished
September 23, 2006  
 
IT STINKS and it makes a horrible mess, but the black gunk that Shell and others are digging from Canada’s muskeg wasteland is transforming Fort McMurray, once a one-horse fur-trapping town in northern Alberta, into a Shanghai of the north.

Alberta’s economy is rivalling China in pace of expansion, and growth is expected to continue. According to Statistics Canada, the Albertan economy has grown by an average of 12.7 per cent a year since 2002, compared with 14.8 per cent for China. Unlike China, which is growing because of its ever-expanding manufacturing engine, Alberta’s growth is all about oil prices. 
 
Still, Canada’s Government reckons that Alberta is experiencing more than a fillip from energy prices because the non-oil economy is growing at 4 per cent, well above the rest of Canada, and the rate of growth has continued longer than any previous boom. The average Albertan earned C$66,275 (£31,177) last year, half as much again as the average Canadian, money that is fuelling a lifestyle envied by the rest of Canada, helping to stimulate steady emigration to the western province.  
 
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Created: 23.09.2006 13:31 MSK (GMT +3)

The State Department sharply criticized a recent move by the Russian government to curb a major Western oil-and-gas-investment project in Siberia, saying it put in doubt Moscow’s willingness to honor major energy deals with foreign investors, The Washington Times reported Saturday.

Spokesman Tom Casey said the Bush administration was “very concerned” by a Russian government move earlier this week to revoke the environmental permits for a $20 billion liquefied natural gas project being developed by the Royal Dutch Shell Group and two Japanese investment houses on Sakhalin Island. read more

More than 3,000 miles east of Moscow, in the remote but not quite pristine wilderness of Sakhalin island and its coastal waters, the Kremlin is fighting its latest battle for control of Russia’s prodigious mineral wealth.

This time the aim is not to rein in home-grown but presumptuous oligarchs. It is to rewrite the terms under which Western oil firms operate in the “supergiant” oil and gas fields of Siberia and the Russian Far East — fields that represent the most plausible long-term hope of weaning the de- veloped world off its reliance on Middle Eastern energy. read more

(Sakhalin Energy extracts oil and gas from one of the world’s most inhospitable regions)

By Adrian Blomfield in Moscow
(Filed: 23/09/2006)

In the past few years, mention of Vladimir Putin at the dinner table of some western leaders could have brought on a case of indigestion. In the past week, though, the Russian president has been causing ulcers.
 
On Monday, Russia suspended an environmental permit for an oil and gas project led by Royal Dutch Shell on Sakhalin Island in the Pacific Ocean. read more

By Roland Gribben

(Filed: 23/09/2006)

Diplomatic pressure on Russia to tackle the crisis over the cancellation of Shell’s environmental licence for the $20bn Sakhalin oil and gas project in Siberia increased with the Netherlands joining British protests. Jan Peter Balkenende, the Dutch prime minister, phoned President Vladimir Putin asking for an explanation about why the Anglo-Dutch giant was being penalised and voiced concern about the impact on inward investment.

Britain has already registered concern, with Margaret Beckett, the Foreign Secretary, lobbying her opposite number, Sergei Lavrov, while Japan, one of the main markets for liquid gas from Sakhalin, and the EU have made similar representations. The Kremlin skirted the Sakhalin issue in a statement declaring the talks had discussed agreements reached during Mr Putin’s visit to Holland last year when he heavily criticised project cost increases imposed by the Anglo-Dutch oil group. But a spokesman for the Dutch premier said Sakhalin was the main subject of the conversation and diplomatically described the talks as constructive. read more

By Roland Gribben
(Filed: 23/09/2006)

A recruitment crisis is threatening the oil and gas industry boom and dozens of important projects, a research report claimed yesterday. BP, Shell, ExxonMobil and the other big groups face ”severe stagnation” because of the failure to replace an ageing workforce.

Graeme Sword, partner and head of energy at 3i, the private equity and venture capital group, makes the bleak predictions in a survey analysing the challenges facing the industry.

His analysis reflects growing concern among industry leaders about the shortage of new recruits, particularly engineers. Oil at $70 a barrel oil has changed the investment climate, triggering a sharp rise in conventional oil and gas projects while improving the economics of alternative and renewable energy sources. read more

Western giants used to have easy pickings in Russia. Now Moscow is taking a harder line…

It’s a new world for oil companies, as Royal Dutch Shell PLC (RDS.A), Exxon Mobil Corp. (XOM), and others are learning the hard way in Russia. In the mid-1990s, the country was in economic turmoil. So the Kremlin agreed to advantageous deals for Western oil majors, which agreed to use their capital and technology to expand oil and gas production into new areas, particularly the icy waters off Sakhalin Island in Asia. read more

THE WALL STREET JOURNAL ONLINE
September 22, 2006 4:57 p.m.

Crude-oil futures sank again on the New York Mercantile Exchange, tumbling more than $1 a barrel to settle at $60.55. Crude is more than 20% below its all-time high close set in mid-July. Here is Friday’s roundup of oil and energy news.

* * *
CLINTON’S RENEWABLE ENERGY FUND: Former President Bill Clinton announced the launch of an investment fund expected to raise more than $1 billion for renewable energy. The announcement, made on the last day of his Global Initiative Conference, came a day after British business mogul Richard Branson pledged $3 billion to battle global warming. read more

September 22, 2006 10:17 p.m.; Page A3

MOSCOW — Russia said it would grant OAO Rosneft a development license for a Pacific coast oil bloc, despite an attempt by Exxon Mobil Corp. to have the reserves counted as part of its adjacent Sakhalin-1 consortium.

The move came amid crossed signals from within the Ministry of Natural Resources over an order to pull the environmental permit for the nearby Sakhalin-2 project led by Royal Dutch Shell PLC. Analysts have said Russia is trying to force foreign oil majors to give up part or all of their advantageous production-sharing agreements, negotiated when oil prices were much lower. read more

Exxon loses out when an offshore field is given to a company controlled by the state, and a key permit is pulled at a Shell project.

From the Associated Press
September 23, 2006

MOSCOW — An offshore oil field originally claimed by Exxon Mobil Corp. has been given to state-controlled oil giant OAO Rosneft, a Russian government official said Friday.

Western oil companies operating in Russia have been dealt a series of blows recently by the Kremlin, which appears to be seeking a greater stake in the country’s natural resources at a time of high prices. read more

Published: Saturday, 23 September, 2006, 10:08 AM Doha Time
 
MOSCOW: First Russian President Vladimir Putin (above) attacked Yukos Oil Co. Now it’s Royal Dutch Shell Plc. This week’s threat to shut down Shell’s $20bn development on Sakhalin Island, the country’s biggest foreign investment, is another maneuver to force companies operating in Russia to share more profits with the government, analysts said.

It’s a reminder of the tactics used in Putin’s dismantlement of Yukos, whose assets were transferred to state-run Gazprom and Rosneft after the government filed $30bn in tax claims against the company. read more

By Michael Harrison, Business Editor
Published: 23 September 2006

Shell increased its presence in China yesterday by buying a controlling stake in the country’s biggest independent manufacturer of lubricants.

The price paid by Shell for the 75 per cent shareholding in Tongyi was not disclosed. But the deal will increase Shell’s share of China’s lubricants market to 9 per cent, making it the third biggest player behind the two state-controlled giants Sinopec and Petro-China.

Tongyi has revenues of about $375m (£197m) a year and has three lubricant plants with a total annual capacity of 600,000 tonnes. read more

By THE ASSOCIATED PRESS
Published: September 23, 2006

NEW HAVEN, Sept. 22 (AP) — A giant liquefied natural gas terminal proposed for Long Island Sound poses safety and security risks that would require more firefighters, escort boats and other measures to prevent accidents or terrorist attacks, according to a Coast Guard report released Friday.

The Coast Guard issued a security analysis that does not take a position on the proposal by Broadwater Energy, but concludes that additional measures would be needed to “responsibly manage risks to navigation safety and security risks” associated with the project. read more