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Posts from ‘November, 2006’

Bloomberg Russians Mask Economy’s Weakness With Shopping, Building Frenzy

EXTRACT: In mid-November, government environmental inspectors vowed to revoke the licenses of oil giant Royal Dutch Shell Plc to continue work on a Far East oil exploration venture called Sakhalin 2, in which Shell has a 55 percent stake. Iskyan says the government’s motive is to win a controlling stake in the project for itself.

Browder doesn’t think any amount of scandal will deter investors so long as Russia’s oil billions keep flowing. “People will ignore my visa, people will ignore Kozlov’s assassination, people will ignore Shell’s problems as long as the money supply is going up, as long as asset prices are going up,” Browder says.

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American Enterprise Institute for Public Policy Research: What Does Putin Want?

Leon Aron

(Leon Aron, resident scholar at AEI.)
  
EXTRACT: Putin’s statist ideology has also been felt by the main foreign investors in Russia’s oil sector. This past fall, the Kremlin halted or threatened to halt operations by Royal Dutch Shell, ExxonMobil, France’s Total, and the Russian-British TNK-BP. Notwithstanding official explanations for this move–from environmental violations to cost overruns to disappointing output–it is an open secret in Moscow that the government’s prime motive is to pressure the companies into either surrendering a share of production to the state or handing back their development licenses.
 
By Leon Aron
Publication Date: November 29, 2006
Leon Aron is a resident scholar at AEI.
 
“Is Russia Going Backward?” That was the question posed by the title of an article that I completed in late August 2004 and published in the October 2004 Commentary. My qualified answer was no. Having supported Russia’s democratic, free-market revolution at every critical juncture during more than a decade of upheaval–from the election of Boris Yeltsin as president of what was still Soviet Russia in June 1991 and the rejection of the hard-line coup two months later, to the referendum in March 1993, Yeltsin’s re-election in 1996, and the toppling of the Communist-led plurality in the Duma in 1999–the Russian people, I argued, were not turning their backs on the reforms they had stoically sustained. They were simply ready at last for the new Russian state to be strong enough to help them.

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The Miami Herald: FIRMS FINED FOR PRICE-FIXING RUBBER: EU cartel case: Royal Dutch Shell fined $211 million

Thu, Nov. 30, 2006

FLORIDA BUSINESS BRIEFS
From Miami Herald Staff and Wire Services

The European Commission fined five oil refiners and chemical producers about $682 million, saying they fixed the price of synthetic rubber used to make tires. A sixth company that had alerted authorities escaped a fine.

It was the second-largest fine ever in an EU cartel case. Italy’s Eni was ordered to pay the largest fine — $357.6 million — while Royal Dutch Shell was fined $211 million. Their fines were hiked by half for it being a repeat offense.

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Lloyds List: I spy with my little’: Russian secret services… infiltrating SAKHALIN Energy

Last Word

Published: Nov 30, 2006

SAKHALIN Energy has tightened its own security, apparently in a bid to prevent Russian secret services from infiltrating the organisation that is developing oil and gas fields off the nation’s east coast.

The Shell-led consortium has added new computer technology by installing spyware to protect laptops and office computers from the Big Brother state services.

Sources told Last Word that Sakhalin Energy employees fear they are being followed. Considering the government’s environmental agency is stepping up its investigation into the Sakhalin II project, many believe their concerns are not too far from the truth.

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Irish Times: Protesters ‘interrogated’locals, says superintendent: ‘Shell’s Corrib gas pipeline’: ‘co-ordinated campaign of intimidation’

By: Conor Lally, Irish Times
Published: Nov 30, 2006

The senior Garda officer in charge of policing the protest at Shell’s Corrib gas pipeline has said some protesters had established checkpoints on roadways in parts of Mayo at which they “interrogated” local people for up to 45 minutes before refusing passage to some.

Supt Joe Gannon also said gardaI have been assaulted by protesters and filmed on cameras while they have been out socialising with friends and family.

A “co-ordinated campaign of intimidation” had in many cases been directed at people with no involvement in the Shell project.

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Financial Times: REBEL INVESTORS AND THEIR TARGETS

Published: November 30 2006 02:00 | Last updated: November 30 2006 02:00

Nov 27 2006ASM International: Break-up vote by rebel shareholders is defeated.

Nov 14 2006 Stork refuses to implement shareholder-backed break-up of company.

Nov 6 2006 Ahold unveils own growth strategy, having spurned rebel investors’ break-up plan.

Sept 29 2006 Philips spins off semi-conductor unit after investor pressure.

Aug 23 2006 TNT sells logistics business after investor pressure. Nov 17 2005 VNU’s takeover of IMS Health foiled by investors, CEO goes.

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Financial Times: Dutch boards stand up to activist investors

EXTRACT: …Royal Dutch Shell, the Anglo-Dutch energy group, acknowledged that investor unrest was key to its decision to unwind its cumbersome century-old dual-headed governance structure.

THE ARTICLE

By Ian Bickerton in Amsterdam: Published: November 30 2006 02:00 | Last updated: November 30 2006 02:00

Activist investors have chalked up more than their share of triumphs in forcing change at Dutch companies in recent times. But now there are clues that the clog may be on the other foot.

The defeat this week of a shareholder motion to break up ASM International, a semiconductor group, came as management at both Stork, the industrial conglomerate, and Ahold, the food retailer, continued to dig their heels in to resist similar investor demands.

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Financial Times: EU fines synthetic rubber cartel €519m

By Tobias Buck in Brussels: Published: November 30 2006 02:00 | Last updated: November 30 2006 02:00

Chemical and energy groups including Shell, Dow, Eni and Bayer were yesterday punished for operating a price-fixing cartel in the market for synthetic rubber, a ruling that triggered the second highest fine yet imposed by the European Commission.

The six members of the cartel were fined a total of €519.1m ($682.4m), a sum bettered only by the €790.5m fine imposed on a vitamins cartel more than five years ago. Yesterday’s decision means 2006 will be a record year for cartel fines imposed by the Brussels regulator, taking the total to €1.84bn.

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Financial Times: Hambro Mining hit as Russia warnson licences: ‘Mr Mitvol… seen by some… as a maverick and publicity-seeker..’

By Rebecca Bream in London and Arkady Ostrovsky in Moscow: Published: November 30 2006 02:00 | Last updated: November 30 2006 02:00

Shares in Peter Hambro Mining, the London-listed, Russia-based gold producer, fell 14 per cent yesterday after a Russian government environmental watchdog threatened to revoke some of its mining licences.

Oleg Mitvol, deputy head of Rosprirodnadzor, the Russian natural resources ministry’s environmental watchdog, said he would check PHM’s gold production against its declared resources, as part of a crackdown on companies that do not develop projects fast enough.

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Financial Times: Western Oil seeks partner

By James Politi in New York Published: November 30 2006 02:00 | Last updated: November 30 2006 02:00

Western Oil Sands, the Canadian energy company, may be looking for a downstream partner to help it better exploit its main asset, a 20 per cent stake in the $5bn Athabasca oil-sands venture.

Western said it had hired engineering advisers and bankers at TD Securities and Goldman Sachs to help weigh “various initiatives and options, including downstream integration of Western’s oil sands resources”.

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AFX News Limited: Royal Dutch Shell plans ‘considerable’ investments in Bolivian gas sector-report

11.30.2006, 02:35 AM

AMSTERDAM (AFX) – Royal Dutch Shell is planning ‘considerable’ investments in the Bolivian gas sector, Dutch daily Het Financieele Dagblad reported, citing Bolivian energy minister Carlos Villegas Quiroga.

The oil major also intends to sell part of its 25 pct stake in Bolivian gas transport company Transredes back to the Bolivian state, the paper said, noting Shell officials will next week start negotiations with the Bolivian government on that issue.

It added that on Monday, Shell chief executive Jeroen van der Veer met Bolivian president Evo Morales, who was on a state visit to the Netherlands.

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The Independent: Hambro Mining shares rocked by Russian attack: ‘Oleg Mitvol’

By Andrew Osborn in Moscow
Published: 30 November 2006

Shares in the AIM-listed Peter Hambro Mining plunged 14 per cent yesterday after a senior Russian government official questioned the legality and efficiency of the company’s activities in its sole area of operations.

Oleg Mitvol, the deputy head of Russia’s state environmental watchdog, said he had asked the government to strip Peter Hambro of two important exploration licences in north-eastern Russia.

He accused it of a litany of corporate and environmental failings, alleging that it was failing to exploit the opportunities it had been given. Shares of Peter Hambro fell 165p to 1,025p on his comments, prompting the company to rush out a statement dismissing what it called “media speculation”. Mr Mitvol’s criticism appeared to have taken the company and investors by surprise and comes at a time when British companies are facing more and more regulatory problems in Russia.

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The Times: Licence fear hits Hambro Mining: ‘Mr Mitvol is becoming a familiar figure to the natural resources industry…’

November 30, 2006
 
More than £130 million was wiped off the value of Peter Hambro Mining after an official at Russia’s environment watchdog indicated that it may revoke five of the goldminer’s licences.
 
Oleg Mitvol, deputy head of the agency, said that Hambro had either violated environmental rules or done nothing to develop sites. “This is one of those companies that simply take licences to keep them on their balance [sheet], thus increasing capitalisation, but in reality they do not develop the deposits,” he told Mosnews, a Russian news website.
 
 
Hambro said it was seeking clarification and was not aware of any environmental breach.

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The Times: Rubber barons’ fine bounces EU to record antitrust take: illegal cartels

November 30, 2006
Rory Watson in Brussels

Five groups pay €519m penalty

Whistle-blower Bayer is spared fine
 
The European Commission has taken a record €1.843 billion (£1.24 billion) in antitrust fines so far this year after imposing a €519 million penalty yesterday on five groups of companies for operating a synthetic rubber cartel.

With at least one more major anti-competition decision to be taken this year, the Commission’s clampdown on illegal cartels looks set to top € 2 billion for 2006, overtaking the previous record of €1.837 billion set in 2001. The total does not include separate action for abuses of dominant position — the Commission’s charge against Microsoft over its Windows operating system. 
 
The penalties, which are paid into the European Union budget, demonstrate the determination of Neelie Kroes, the Competition Commissioner, to tackle illegal behaviour.

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The Wall Street Journal: EU Fines Rubber Cartel

Decision Illustrates
Perils of Cooperating
In Price-Fixing Cases
By MARY JACOBY and ANNE JOLIS
November 30, 2006; Page A12

BRUSSELS — European regulators, in slapping five chemical companies that had fixed prices on synthetic rubber with the EU’s second-highest-ever group-cartel fine, also exposed what defense lawyers call an increasing problem: the inability in Europe to plea-bargain with cooperating antitrust offenders.

The European Union yesterday fined five companies a total of €519 million ($685 million) for fixing prices in Europe on synthetic rubber used to produce tires, shoe soles, floor coverings and golf balls.

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THE WALL STREET JOURNAL: Oil News Roundup: November 29, 2006 4:28 p.m.

Crude-oil futures rallied for a third straight session, climbing above $62 on the New York Mercantile Exchange on unexpected declines in inventories and forecasts of chilly weather heading toward the East Coast. Here is Wednesday’s roundup of oil and energy news:

* * *
WAGONER’S PROMISE: The Greater Los Angeles Auto Show began with two days of media previews before opening to the public. General Motors CEO Rick Wagoner said the U.S. needs to reduce dependence on foreign energy and insisted the No. 1 auto maker is accelerating its efforts to meet the challenge by being the first to offer a plug-in hybrid and by expanding its production of biofuel vehicles.

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Daily Telegraph: The age-old message: ingot we trust

EXTRACT: More controversially, he takes the Kremlin’s side in the dispute with Royal Dutch Shell, facing the threat of expulsion from Sakhalin after investing $22bn in the world’s biggest liquefied gas project. “Russia is an unrecognisable country since the day that Shell deal was signed, and the price of oil is much higher. I agree with the Russians that the original terms were unfair,” he said. “Shell are posturing. They say they’ve got a contract, and the Russians say you’re quite right and if you look closely it says you must not tread on green-throated frogs,” he said. “The big guys can change the rules on you. We watched them do it in the UK when they put windfall taxes on the North Sea. Governments do it all the time.”

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Daily Telegraph: Database: Energy: Thursday 30 November 2006

Last Updated: 12:23am GMT 30/11/2006

A round-up of headlines from across the financial sectors, provided by Bloomberg News.

ENERGY

• BP has been ordered to show it hasn’t broken a pledge to pay the medical bills of three workers hurt in a blast at a Texas refinery in March 2005 that killed 15 people and injured hundreds more.

• Russia’s environmental oversight agency finished its probe into Royal Dutch Shell’s Sakhalin-2 project and will issue a report after December 15, said Oleg Mitvol, the deputy head of the agency.

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The Guardian: Russia wipes £130m from gold miner by threatening to revoke licences: ‘challenged by Oleg Mitvol’

Marianne Barriaux
Thursday November 30, 2006

Russia said it was looking at revoking the licences of Peter Hambro, the gold mining company, in a fresh challenge yesterday to western businesses operating in the country. The Russian authorities have already attacked Shell, TNK-BP and ExxonMobil over their environmental records. Shares in Peter Hambro fell nearly 14% to £10.25, wiping more than £130m off the value of the Aim-listed firm.

Oleg Mitvol, the deputy head of Russia’s environmental watchdog Rosprirodnadzor, has said Peter Hambro is not exploiting and developing two of its gold licences nor three chrome ones.

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The Guardian: Russia takes a golden opportunity: As with Sakhalin-2, the man wielding the big stick was Oleg Mitvol, deputy chief of Rosprirodnadzor

Julia Finch
Thursday November 30, 2006

Just two months ago in this column we quoted George Soros’s view of Russia as “a country that does not hesitate to use its monopoly power in devious and arbitrary ways”. Mr Soros was referring to letting the state-controlled Rosneft list in London, but his view was also a good description of events that had just unfolded at the huge Shell-led Sakhalin-2 project. Just as the state-controlled Gazprom was agitating to buy a 25% stake in the $20bn (£10bn) venture, Shell lost its operating licence on environmental grounds.

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Shell to Sea: Protest at HQ of Shell Exploitation Ireland, 52 Lwr Leeson Street Dublin 2:\2PM December 2nd 2006

There will be a demonstration in Dublin outside the Shell Headquarters, 52 Lower Leeson Street, Dublin (corner of Adelaide Road) on Saturday December 2nd at 2PM.

Speakers will include local people from Rossport including Willie Corduff and Bríd Ní Sheighin, Finbar Dwyer from the Rossport Solidarity Camp, and a representative of Dublin Shell to Sea. Des Bonass of the Dublin Council of Trade Unions will also speak on the importance of the question of the giveaway of the country’s natural resources by the government. Mary Mullen will sing the traditional song Michael Davitt to set the tone for the protest.

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Reuters: Russian steel, mining firms credit ratings lag -S&P

EXTRACT: Doing business in Russia is risky.. An example is the giant Sakhalin-2 oil and gas project, led by Shell, which has come under pressure from the Russian authorities since the Anglo-Dutch oil major said costs would double to $22 billion.

THE ARTICLE

LONDON, Nov 29 (Reuters) – Doing business in Russia is risky and a major reason why steel and mining company ratings in the country lag those of the government, rating agency Standard & Poor’s said on Wednesday.

“The key constraint in Russia is country risk, which is not the same as sovereign risk,” said Moscow-based Elena Anankina, a director at S&P.

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BBC News: EU orders fine for rubber cartel: ‘Royal Dutch Shell was fined 160.8m euros’.

The European Commission has fined five oil and chemical companies £519m ($682m) for price-fixing.

Italy’s Eni faces the largest fine, of 272m euros (£183m; $357m), while Royal Dutch Shell was fined 160.8m euros.

The EU imposed the fine after learning that five firms were fixing the price of synthetic rubber used for tyres.

The fine is the second largest the commission has imposed for a cartel. It came after Germany’s Bayer told EU lawmakers of the price-fixing.

The move gave Bayer immunity from any fine, which could have amounted to some 204m euros.

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PeterboroughToday.co.uk: Three held in card clone probe: All the men arrested are believed to be Shell employees

Shell Fraud

(Police swoop on a Shell filling station in Westfield Road. Picture: ROWLAND HOBSON)

THREE men have been arrested today (November 29) in early morning raids in connection with an alleged card cloning scam in Peterborough.

Fraud squad detectives and police officers swooped on seven properties, including three filling stations, in and around Peterborough shortly after 7am today and arrested three men, aged 29, 37 and 38, on suspicion of conspiracy to steal.

The move comes after unsuspecting residents complained to police that they had their cards cloned and money syphoned from their accounts after they used them to buy petrol.

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Reuters: Shell Deer Park JV refinery restarts cat cracker

HOUSTON, Nov 29 (Reuters) – Shell Oil Co.-Pemex joint venture Deer Park Refining on Wednesday began restarting a gasoline-producing catalytic cracking unit at the 340,000 barrel per day refinery in Deer Park, Texas, according to a notice filed with the state pollution regulation agency.

Normal start-up procedures were to be followed, according to the notice filed with the Texas Commission on Environmental Quality.

The 67,000 bpd cat cracker was shut on Nov. 4 for repairs to its regeneration section.

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Bloomberg: Cartlel fined EU519 Million: Royal Dutch Shell Plc fined 160.9 million euros as a repeat offender

 

By Matthew Newman

Nov. 29 (Bloomberg) — Dow Chemical Co., the largest U.S. chemical maker, Eni SpA and three other chemical makers were fined 519 million euros ($682 million) by the European Union for fixing the prices of ingredients in rubber used in tires and shoes.

Eni received the biggest penalty at 272.2 million euros, followed by Royal Dutch Shell Plc at 160.9 million euros and Dow at 64.6 million euros, the European Commission, the EU’s Brussels- based antitrust authority, said in a statement today.

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RIA Novosti: Russia environment watchdog to submit Sakhalin II report in Dec.

16:33 | 29/ 11/ 2006 

MOSCOW, November 29 (RIA Novosti) – Russia’s environmental watchdog will present a final report on the Sakhalin II oil and gas project in the country’s Far East by mid-December, a senior service official said Wednesday.

The service said earlier this month that project operator Sakhalin Energy, controlled by Royal Dutch Shell, is in breach of Russia’s environmental regulations, and asked the agency overseeing the use of water resources to consider stripping it of 19 licenses.

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MarketWatch: BP confirms two recent contractor fatalities in U.S.

By Jessica Resnick-Ault Of DOW JONES NEWSWIRES
Last Update: 6:38 AM ET Nov 28, 2006

In yet another blemish to its accident-marred U.S. division, BP PLC (BP) Monday confirmed that two contract workers at its U.S. drilling operations died in on-the-job accidents in mid-November.

The first fatality occurred on the Alaskan North Slope on Nov. 13, when a worker walking across a drill pad apparently fell, striking his head, said BP spokesman Ronnie Chappell.

The second man died Nov. 17, after the drilling of a well in Eastern Oklahoma had been completed. That contract worker was helping to prepare the rig to be moved when he also sustained a fatal head-injury.

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American Reporter: WHILE YOU WERE DISTRACTED… The Oil Crisis

by Mark Scheinbaum
American Reporter Correspondent
Lake Worth, Fla.

The Oil Crisis: U.S. taxpayers are paying to send oil to Iraq. Shall we try this again? Okay, the ruptured petrochemical infrastructure plus sabotage in Iraq means that Iraqis are using gasoline U.S. troops bring into the oil-rich country.

Meanwhile, Royal Dutch Shell for the second year in a row has failed to pump as much oil from planet earth as they sell – dipping into their reserves. Shell now predicts that they (and others?) may only be able to find 70 to 90 percent of the oil resources needed each year.

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www.bbj.hu: Mitsui & Co. expects conclusion on Gazprom talks

bbj.hu11. 29, 2006. Wednesday 07:44

The talks include the portion of the €16.7 billion ($22 billion) project cost to be borne by Gazprom and existing investors, Utsuda said in an interview in Tokyo.

Mitsui & Co. President Shoei Utsuda said talks by partner Royal Dutch Shell Plc to resolve environmental concerns at Sakhalin-2 and to include OAO Gazprom in the Russian gas project “will not take a long time.” Shell owns 55% of the venture, Mitsui, Japan’s second-largest trading company, owns 25% and Mitsubishi Corp., Japan’s largest trading company, owns 20%.

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The Independent: Polonium 210 was cancelled due to signal failure: Russia: ‘It’s robber capitalism, it’s lawless’

By: MARK STEEL
Published: Nov 29, 2006

They must be bemused in Chechnya. Because they had about 50,000 people blown up by Putin and no one gave a toss. They probably made countless attempts to interest politicians and reporters from the West, who said: “Hmm, you’ve had your hospital destroyed by a tank, have you? Well it’s a bit 1940s I’m afraid. Have they killed any of you with rocket-propelled bird flu or a remote-controlled piranha – something a bit sexy?”

While Putin’s army was destroying Chechnya, Tony Blair welcomed him to Britain, and described him as a “great moderniser”. And that certainly applies to whoever killed Mr Litvinenko. Because there can hardly be a more modern way of murdering someone than with radioactive sushi. In many ways the two men are so similar that when Putin makes a statement on the incident, he might say: “This is not a betrayal of KGB values. It represents traditional assassination in a modern setting.”

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Financial Times: Sakhalin II project problems may be temporary but they are still inexcusable

By Doug Norlen: Published: November 29 2006 02:00 | Last updated: November 29 2006 02:00

From Mr Doug Norlen.

Sir, Arkady Ostrovsky’s article “Out on a limb” (November 23), on the controversy-plagued Sakhalin II oil and gas project in Russia, quotes Ian Craig, chief executive of Sakhalin Energy, as claiming that environmental problems are temporary. One could say the same about a mugging in the park, but that does not make it excusable. Mr Craig also claims that many project violations are fixable, without explaining why so many have not been fixed.

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The Times: Commission plans massive cartel fine: ‘Shell’s fine, as well as ENI’s, was increased because it was a repeat offender’

November 29, 2006 
 
The European Commission is expected to impose today its second-largest cartel fine against Shell, Dow Chemical, ENI, Unipetrol and Trade-Stomil.

It is not yet clear the level of the fines to be levied on the oil and chemical firms for fixing prices of synthetic rubber, used mainly in tyre production. 
 
It is thought that Bayer will not be fined because it was the first company to inform the European Union executive about the cartel.

The highest cartel fine the Commission has set by sector was €790.5 million (£536 million) on a vitamin industry case in 2001.

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Reuters: EU to set second-highest fine on rubber cartel: *Shell a repeat offender again

EXTRACT: Shell’s fine, as well as Eni’s, was increased from what it would have been under the Commission’s normal calculations because it was a repeat offender. The Commission slapped a 108 million-euro fine on Shell in September for fixing prices of bitumen in the Netherlands. It also fined 13 other firms.

THE ARTICLE

Tue Nov 28, 2006 2:02 PM ET

BRUSSELS, Nov 28 (Reuters) – The European Commission will impose on Wednesday its second largest cartel fine ever against Shell, Dow Chemical, Unipetrol and Trade-Stomil, a Commission draft document showed.

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Bloomberg: Royal Dutch Shell Sakhalin II extract

Houston Chonicle: Russia gains confidence, but Shell is hanging on: Gazprom pushes for a bigger stake in energy project

By ALEX LAWLER
Reuters News Service

LONDON – Royal Dutch Shell is “hanging on in there,” according to a company source, as Russia squeezes its $22 billion Sakhalin-2 oil and gas project over cost overruns, environmental violations and to secure a stake for state firm Gazprom.

Sakhalin-2 on the Pacific island of Sakhalin, north of Japan, is one of the world’s biggest and most ambitious energy projects and the largest foreign direct investment in Russia, according to operator Sakhalin Energy.

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REGNUM: Oleg Mitvol: Russia pays in oil for approvals of Sakhalin 2 project

“If we manage to resolve the problem of the 529 rivers whose ecology has been damaged by the Sakhalin 2 project and a number of other vital problems of Sakhalin, they may depict us in whatever way they like. ‘Do what you can and come what may.’ Ask questions to those people who looked at those problems through rose-colored glasses,” the deputy head of the Rosprirodnadzor (Russian Ecological Control Department) Oleg Mitvol said during an online-conference at REGNUM on Nov 27, when asked “why the work on the projects on Sakhalin reek of mere populism.”

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MarketWatch: Sakhalin-2 full environment report due mid-December – regulator

Last Update: 5:21 PM ET Nov 28, 2006

LONDON (MarketWatch) — Russian environmental regulator Oleg Mitvol said Tuesday he expects to complete in mid-December a full report on alleged environmental damages by Sakhalin Energy Ltd.

Mitvol, the deputy head of the Russian Natural Resources Ministry’s environmental watchdog, has already threatened to pull the environmental license of the Royal Dutch Shell PLC (RDSA.LN)-led consortium. Sakhalin Energy is the operator of the Sakhalin-2 oil and liquefied gas project on the Russian Far Eastern island of Sakhalin.

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The Moscow Times: Mitsui May Sell Some Sakhalin Shares

Wednesday, November 29, 2006. Issue 3550. Page 5.
By Miriam Elder
Staff Writer

Mitsui is close to selling part of its stake in the Sakhalin-2 oil and gas project to Gazprom, the Japanese company’s president said Tuesday.

Talks may “soon” be concluded, Shoei Utsuda said in an interview with Bloomberg in Tokyo. He failed to provide a concrete timeline or the amount of shares under negotiation.

Criticism by Russian officials of the project, run by Shell for minority shareholders Mitsui and Mitsubishi, has widely been seen as a means of putting pressure on the consortium to cede a major stake to state-run Gazprom.

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THE WALL STREET JOURNAL: Oil News Roundup: November 28, 2006 3:40 p.m.

Crude-oil futures jumped to nearly $61 a barrel on the New York Mercantile Exchange on forecasts of colder weather and uncertainty ahead of an OPEC meeting. Rising sectarian violence in Iraq, along with weakness in the dollar, added to the bullish sentiment that emerged as traders returned from the four-day Thanksgiving holiday on Monday. Here is Tuesday’s roundup of oil and energy news:

* * *
POWERFUL MERGER: Spanish power company Iberdrola said it agreed to acquire Scottish Power in a friendly £11.6 billion bid ($22.48 billion). The board of Scottish Power, the U.K.’s fifth-biggest power company, approved the offer and unanimously recommends its approval by shareholders. The move stands to jump-start the long-awaited consolidation in the European power sector, which has so far been slowed down by politics and legal battles.

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The Guardian: Poisoning puts business with Russia under a cloud

· Investor trust put at risk after Litvinenko death
· Kremlin ‘more concerned about asserting its power’

Terry Macalister
Wednesday November 29, 2006

The poisoning in London of a former KGB officer, Alexander Litvinenko, will damage investor confidence in Russia, the primary trade association representing those doing business between Britain and Russia warned yesterday.

The warning comes at a time of unprecedented interest in Russian companies raising money on the London Stock Exchange, and coincides with increased criticism by Moscow of Shell and other western firms operating in Russia.

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Itar-Tass: Findings of Sakhalin-2 checks on way to ministry, prosecutors

28.11.2006, 13.09
 
MOSCOW, November 28 (Itar-Tass) – The Russian Federal Service for Supervision of Natural Resources (Rosprirodnadzor) has finished checks of compliance with environment legislation by Sakhalin Energy, an operator of the Sakhalin-2 project.

A source in the service told ITAR-TASS on Tuesday that “these materials are being turned over to the Ministry of Natural Resources in these hours”.

“The 600-page document is a report on all violations that have been made by the operator,” he said, adding that “any extra-new violations have not been revealed”.

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REGNUM: Oleg Mitvol: The court is ashamed of canceling positive ecological report on Sakhalin 2 project

The ecological impacts of the Sakhalin 2 project were first mentioned in the second half of 2006 after 2-3 years of constant warning by ecologists, says the deputy head of the Rosprirodnadzor (Ecological Control Department) Oleg Mitvol said at the online conference at REGNUM on Nov 27. “In June 2006 we began receiving specific reports from forestries about substantial ecological damage.”

“We began check-ups and revealed mass violations of the legislation and construction norms in different regions. Particularly, as a result of an administrative inspection, we have found out that Sakhalin Energy knew that the project was damaging ecology but wasn’t doing anything about it. Since June we have held many check-ups and have done much.”

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Russia-ic.com: Sakhalin II project checking is over

sakhalin II

28.11.2006

The federal service for supervision of natural resource usage finished Sakhalin II project checking. Following the results of the conducted inspection the decision of whether the project operator Sakhalin Energy will be able to keep its production license or not. Additionally the size of penalty charge for violation of environmental legislation will be defined.

The Ministry of natural resources of Russia demanded from the Federal Service for supervision of natural resource usage to prepare a report covering damage ceased by implementation of the project Sakhalin II. According to the results of inspection the operator of the project violated a range of environmental legislation provisions. The Federal service applied for withdrawal of 19 licenses from Sakhalin Energy. The company admitted its guilt partially and consented to pay a fine. First part of money was transferred to the government on November 10, 2006.
     
source:
www.lenta.ru

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Reuters: Shell to inspect damaged Nigerian oil facilities

28 Nov 2006 12:15:08 GMT
Nigeria violence
More  By Tom Ashby

LAGOS, Nov 28 (Reuters) – Royal Dutch Shell will soon take a first step to resuming 500,000 barrels per day of Nigerian oil output by sending inspectors to assess pollution and damage to facilities in the western Niger Delta, company sources said on Tuesday.

Shell executives attended a three-way meeting at the weekend with government officials and a militant group from the area. At the talks they agreed to start joint inspections of the facilities shut by a series of militant attacks in February.

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MarketWatch: Ex-oil executive Philip Watts challenges SEC in appeals court

By Siobhan Hughes
Last Update: 8:11 AM ET Nov 28, 2006

WASHINGTON (MarketWatch) — Sir Philip Watts, who resigned as chairman of what is now Royal Dutch Shell PLC (RDSA) after an oil-and-gas-reserves overbooking controversy, is tangling with the Securities and Exchange Commission in a court case that may have implications for key tools in the SEC’s regulatory arsenal.

In a legal challenge filed in the U.S. Court of Appeals for the District of Columbia Circuit, Watts is seeking to force the SEC to respond to subpoenas of the commission and three members of the staff. The SEC has resisted the subpoenas, asserting that its employees are shielded because of the need to ensure frank, open discussions within federal regulatory agencies and to protect the quality of agency decisions.

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New York Times: Alaska to Cut Point Thomson Oil Leases

By THE ASSOCIATED PRESS
Published: November 28, 2006
Filed at 12:44 a.m. ET

JUNEAU, Alaska (AP) — Exxon Mobil Corp. is reviewing its legal options in the wake of Alaska’s decision to strip it and other oil companies of their leases in the North Slope’s Point Thomson oil and gas field.

The state said Monday it was revoking the leases after finding Exxon Mobil failed to come up with a viable plan for developing the field’s vast reserves.

Exxon Mobil spokeswoman Susan Reeves said the company was disappointed.

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AP Worldstream: Kremlin control of natural gas routes to Europe stokes Western unease

By: GEORGE JAHN

For the West, the threat from Moscow was supposed to end with the collapse of the Soviet Union 15 years ago. But Russia’s growing energy clout is generating renewed cause for anxiety.

The North Atlantic Treaty Organization, set up in the early days of the Cold War to keep Soviet-led forces in check, has begun speaking out about the potent new energy lever being wielded by the Kremlin in the international struggle for influence.

Noting “added value to NATO discussing energy and security policies,” NATO Secretary-General Jaap de Hoop Scheffer said last week that energy security would be high on the agenda at its summit starting Tuesday in Riga, Latvia.

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Lloyds List: Shell takes big step at Smallfoot

By: Offshore Energy is edited by Martyn Wingrove +44 (0)20 7017 4629

[email protected]

Lloyds List: Published: Nov 28, 2006

SHELL has submitted plans to develop the Shamrock and Caravel gas fields in the UK southern North Sea with two unmanned platforms, writes Martyn Wingrove.

The Anglo-Dutch oil major intends to install two Trident-design platforms over the gas fields in block 49’20 next summer to start production in December next year.

Both platforms will be powered from renewable energy sources as there will be solar panels and wind turbines on the topsides.

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Irish Times: Learning lessons from Corrib gas: ‘Shell behaved in a bully-boy fashion’

Published: Nov 28, 2006

Gas from the Corrib field, off north Mayo, is not expected to flow until 2009. That may appear to be a long time away but, in terms of the work required in building a pipeline and production terminal, it represents an extremely tight schedule. And with local protests continuing, there is no certainty targets will be met. Because of that, the sooner an alternative pipeline route is agreed with local landowners, the better.

The Government’s initial handling of issues surrounding development of the gas field was as arrogant and incompetent as the stance adopted to local protesters by Shell. No added-value was envisaged for the local economy because the processed gas would be piped directly to Galway and onwards to Dublin.

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