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Posts from ‘December, 2006’


A file of our news stories stretching back to July 2005 concerning the former Royal Dutch Shell Sakhalin II project can be found on the link below: – With all due modesty, no one has run alarm bells as loudly or as long about this ill fated project or have been as accurate in […]

Royal Dutch Shell Plc .com headline of the year: Energy giants cede Putin control with a thank you

(Man of the people … Vladimir Putin greets children in Moscow’s Red Square. Photo: AP/Yuri Kochetkov) The New York Times Steven Lee Myers in Moscow INSIDE the Kremlin last week, the executives of three big international companies – Royal Dutch Shell, Mitsubishi and Mitsui – heaped praise on the man whose government had forced them […]

International Herald Tribune: Despite troubles in Africa, stampede for oil unabated

By Heidi Vogt The Associated Press Sunday, December 31, 2006 DAKAR, Senegal Angola is joining the Organization of Petroleum Exporting Countries, African oil exploration is booming, and China is investing. The stampede for oil in Africa has continued even as militant attacks in some countries and precarious governments in others make returns uncertain there. Though […]

Reuters: Gazprom’s Sakhalin-2 buy may let EBRD off the hook

EXTRACT: POOR RECORD: The EBRD is supposed to demand strict environmental compliance from its borrowers and green groups said Shell’s poor record in managing Sakhalin-2 meant the project did not qualify. THE ARTICLE Sun Dec 31, 2006 3:22 PM GMT   By Tom Bergin LONDON (Reuters) – Russian gas giant Gazprom’s decision to take a majority […]

The Sunday Telegraph: EBRD set to deny loan to Sakhalin

By Sylvia Pfeifer 31 December 2006 Europe’s top development bank is set to walk away from the Sakhalin-2 energy project in what will be seen as an embarrassing snub to the renationalisation policy of Vladimir Putin, the Russian president. The London-based European Bank for Reconstruction & Development – which was established to encourage free markets […]

Petroleum News: Mackenzie natural gas pipeline project assailed from all sides

Week of December 31, 2006 Proponents of the Mackenzie Gas Project have invested about C$500 million in the venture so far, but a confluence of rising costs, weakening economics and aboriginal resistance that has slowed down the regulatory process could still undo that commitment, TransCanada Chief Executive Officer Hal Kvisle has warned. In a year-end […]

Houston Chronicle: Energy sector could see more mergers in ’07

Production and access challenges may drive growth By KRISTEN HAYS Oil exploration and production companies that have enjoyed record profits fueled by high commodity prices over the last two years may go to the altar in 2007 to keep growing. Analysts say the energy sector could see more mergers and acquisitions to counteract difficulty in […]

The Washington Monthly: BEHOLDEN TO BIG OIL

BEHOLDEN TO BIG OIL…. If I didn’t know better, I might just think the Bush administration is a little too cozy with the oil industry. The Justice Department is investigating whether the director of a multibillion-dollar oil-trading program at the Interior Department has been paid as a consultant for oil companies hoping for contracts. The […]

The Observer: Bosses must win or walk the plank

There will be bruises as predators, politicians and regulators get stuck in. Chief executives will have to rise to the challenge if they want to keep their jobs – and their huge salaries. Oliver Morgan reports Sunday December 31, 2006 Politics are likely to play a big role in the last full year that Lord […]

The Sunday Telegraph: EBRD set to deny loan to Sakhalin

By Sylvia Pfeifer 31 December 2006 Europe’s top development bank is set to walk away from the Sakhalin-2 energy project in what will be seen as an embarrassing snub to the renationalisation policy of Vladimir Putin, the Russian president. The London-based European Bank for Reconstruction & Development – which was established to encourage free markets […] Coming soon… the inside story on the Sakhalin II debacle

By Alfred Donovan Saturday 30 December 2006 The Sakhalin II project and related backdrop events have been marked by deception, double-dealing, corruption, massive pollution, intrigue, blackmail, murder and spies. Some might unfairly say this constitutes a fairly typical Shell project, as per the example of Shell’s activities in Nigeria. With the assistance of a number […]

The New York Times: Russia Gas Standoff With Belarus Intensifies

By ANDREW E. KRAMER Published: December 30, 2006 MOSCOW, Dec. 29 — For Gazprom, the Russian energy monopoly, 2006 is ending as it began: in a dispute over prices and control of a pipeline in a neighboring country that is threatening the smooth flow of natural gas to Europe. But this time, the price increase […]

The New York Times: Gas Investors Bow to Pressure on Recovering Expenses

(Photo: Joseph Sywenkyj for The New York Times: The Sakhalin 2 project in Russia’s Far East is still under construction. Last week Gazprom took control of the project when foreign developers, led by Royal Dutch Shell, agreed to sell it 50 percent plus one share.)   By ANDREW E. KRAMER MOSCOW: The Russian government has […]

Financial Times: Amvescap advances on bid rumours

By Robert Orr Published: December 30 2006 02:00 | Last updated: December 30 2006 02:00 The year’s worst performer was Carnival, the cruise-ship operator, while other notable underperformers included oil giant BP and GlaxoSmithKline, the pharmaceuticals company. With the price of crude falling below $60 a barrel for the first time in a month,oil stocks […]

Financial Times: Mid-caps top again in year of all-round decent performance

By Christopher Brown-Humes Published: December 30 2006 02:00 | Last updated: December 30 2006 02:00 …one of the surprises of the year was just how many of the UK’s top 20 companies did so badly. Six of them actually saw their share prices fall – BP, Shell, GlaxoSmithKline, AstraZeneca, BHP Billiton and HSBC. BP was […]

The Guardian: Booms, bonuses and bankruptcy

David Teather and Angela Balakrishnan Saturday December 30, 2006 Behind many of the year’s stories was the shifting world order: the emerging power of Russia, India and China. The year began with Russia cutting gas supplies to Ukraine, raising fears of shortages and soaring prices across Europe. At the end of the year Shell was […]

The Guardian: Market forces

Nick Fletcher Saturday December 30, 2006 Oil prices eased below $60 in the US for the first time for a month leaving BP, 4p lower at 567.5p, and Royal Dutch Shell down 7p to £17.85. Shell was also hit by reports the company and its partners would have to stump up a third of the […]

Daily Telegraph: Market report

By Josephine Moulds Last Updated: 12:58am GMT 30/12/2006 FTSE falls on a quiet day ahead of break City trader Oil stocks were down on a weaker crude price as traders disregarded a sharp drop in US crude stockpiles on Thursday night. BP slid 4 to 567½p. Royal Dutch Shell was hit by news that it […]

Daily Telegraph: Database: Energy: Saturday 30 December 2006

• Shares of Exxon Mobil, the world’s biggest corporation, had their largest annual increase since 1980 as the company boosted oil production and crude prices rose to an all- time high. • Royal Dutch Shell will cut its proven oil and gas reserves by more than 4pc when it gives up half its stake in […]

Bloomberg: Shell May Cut Reserves at Least 4 Percent on Sakhalin (Update1)

By Stephen Voss and Torrey Clark Dec. 29 (Bloomberg) — Royal Dutch Shell Plc, Europe’s largest oil company by market value, will cut its proven oil and gas reserves by more than 4 percent when it gives up half its stake in Russia’s Sakhalin-2 venture, analysts said. The equity transfer to state-run Russian energy company […]

Bloomberg: Centurion, Shell End Egyptian Gas Development Accord (Update4)

By Jim Polson Dec. 29 (Bloomberg) — Centurion Energy International Inc., the Canadian oil and gas producer that’s being acquired by a United Arab Emirates-based energy company, announced the termination of plans by Royal Dutch Shell Plc to help it explore for natural gas in Egypt’s Nile Delta. The two companies mutually agreed to end […]

‘Five Worst CEOs of 2006’ Announced by

WASHINGTON, Dec. 27 /PRNewswire-USNewswire/ — today announced the “Five Worst CEOs of 2006” — a review of the worst CEOs of the year. “Despite this year’s bull market, 2006 was a banner year for CEOs who are undermining free enterprise, free markets and capitalism,” said Tom Borelli, editor of “Instead of relying on […]

BBC Monitoring Service: Russian economist backs Belarus in gas row

Published: Dec 28, 2006 SAKHALIN II PSA: EXTRACT: ‘Delyagin alleged that the deal was murky and could discredit Shell if investigated properly. ‘ The director of the Moscow-based Institute of Problems of Globalization, Mikhail Delyagin, has sharply criticized Gazprom’s decision to raise the price for Russian gas exported to Belarus 4.3-fold from 1 January 2007. […]

AP Worldstream: Shell says Brazilian oil field commercially viable

Published: Dec 28, 2006 Royal Dutch Shell PLC announced Thursday that one of its Brazilian offshore oil fields is commercially viable and that two deep-water areas of the block have been identified for development. Europe’s second-largest oil company did not say when production would begin in the BS-4 block or offer yield estimates, but the […]

AP Worldstream: State Department official cites Niger Delta threats as tops to U.S. businesses for 2007

By: DAN CATERINICCHIA, Published: Dec 28, 2006 The kidnappings and armed attacks plaguing oil companies operating in Nigeria’s oil-rich Niger delta are among the top security challenges U.S. businesses are likely to face in 2007, a State Department official said Thursday. “We’re keeping our eye on Nigeria right now,” Doug Allison, a special agent with […]

Irish Times: Warming our feet at Russia’s gas reserves

EXTRACT: After the recent tensions over the Sakhalin development between Shell and Gazprom, there were doubts about whether Russia would be willing to develop stable relationships with foreign investors, a fear that was dismissed by Stephen O’Sullivan of Deutsche Bank in Moscow, who has followed the battle closely. The scale of pressure on Shell developed […]

The Independent (UK): Gale Norton joins Shell

Published: Dec 29, 2006 Shell has hired the former US interior secretary Gale Norton as general counsel for its “unconventional resources” division. Ms Norton will provide and co-ordinate legal services for the division, which develops technology to get oil from sources such as oil shale.

Financial Times: Average size of FSA fine declines in 2006: ‘In 2004 Royal Dutch Shell paid £17m in the wake of its oil and gas reserves misstatement.’

By Barney Jopson Published: December 29 2006 02:00 | Last updated: December 29 2006 02:00 The average size of fines doled out by the City watchdog dropped in 2006, but the total number of penalties edged up from the previous year. The Financial Services Authority collected just over £13m in fines from 25 cases this […]

Financial Times: There are times when you cannot be sure of Shell

By Chris Hughes Published: December 29 2006 02:00 | Last updated: December 29 2006 02:00 Sakhalin throws up a fresh disappointment Shell suffered a blow when it was forced to surrender control of Russia’s Sakhalin-2 oil field to state-backed Gazprom last week. Now the Anglo-Dutch oil group faces fresh embarrassment in defeat. To re-cap, Shell […]

Financial Times: Sakhalin partners hit by $3.6bn costs

By Arkady Ostrovsky in Moscow and Ed Crooks in London Published: December 28 2006 18:44 | Last updated: December 28 2006 18:44 Royal Dutch Shell and its two Japanese partners are to be made to share the burden of the huge cost overruns of Sakhalin-2, it emerged on Thursday, in news that cast a less […]

Daily Telegraph: Database: Energy: Friday 29 December 2006

Last Updated: 1:34am GMT 29/12/2006 • Centrica, the UK’s biggest energy supplier, said four employees were among six people who died in a helicopter crash this week in the Irish Sea, in Morecambe Bay off the coast of north-west England. • Gazprom, Russia’s natural-gas export monopoly, is in talks with Belarus to avoid a possible […]

Daily Telegraph: Shell and Japanese to pay Sakhalin bill

(Paying the cost overruns, part of a secret protocol, will allow spending on the Sakhalin project to be increased) By James Quinn Last Updated: 1:34am GMT 29/12/2006 Royal Dutch Shell and its two Japanese partners are to be made to foot the bill for huge cost overruns at the Sakhalin-2 oil and gas project in […]

Forbes/AFX News: Russia Shows Sakhalin Partners Who The Boss Is: ‘Royal Dutch/Shell, Mitsui and Mitsubishi thoroughly humiliated by the Kremlin’

Chris Noon, 12.28.06, 3:58 PM ET    It sounds as though Royal Dutch/Shell, Mitsui and Mitsubishi the three companies developing the Sakhalin-2 energy site in the eastern part of Russia, have been thoroughly humiliated by the Kremlin. The companies will have to shoulder $3.6 billion in new costs to develop the Sakhalin-2 oil and gas […]

The Times: Shell and Sakhalin-2 partners to absorb extra $3.6bn

December 29, 2006 Carl Mortished, International Business Editor   Royal Dutch Shell and its Japanese partners in the Sakhalin-2 gas project will be forced to swallow a third of the $10 billion (£5.1 billion) cost overrun suffered by the giant liquefied natural gas facility in eastern Siberia, according to reports from Moscow. A confidential agreement […]

THE WALL STREET JOURNAL ONLINE: Oil News Roundup: December 28, 2006 4:39 p.m.

Crude-oil futures broke a four-day losing streak, settling at $60.53 a barrel on the New York Mercantile Exchange, after data showed a bigger-than-expected drawdown in crude supplies in the latest week. Here is Thursday’s roundup of oil and energy news: * * * RUSSIA, BELARUS HEAD FOR SHOWDOWN: Russia and the former Soviet state of […]


Threats Widen in Gazprom-Belarus Dispute Gazprom’s dispute with the Belarusian government over the cost of gas — this year’s edition of what seems like an annual winter pricing fight between the state-owned Russian monopoly and a formerly Soviet client state — now threatens the supply to Western Europe. Gazprom said yesterday that Germany, Poland and […]

The Wall Street Journal: BP Feels Pressure as Kremlin Puts Heavy Hand on Resources

COMMENT FROM breakingviews  December 28, 2006 The last thing BP needs is another big problem. The oil giant is already dealing with a fight over management succession and faces U.S. lawsuits on safety lapses and trading practices in the futures markets. But Russian resource nationalism could well join the list, if reports of a government […]

International Herald Tribune: Russian government gains another concession on Sakhalin-2 project

By Andrew E. Kramer Thursday, December 28, 2006 MOSCOW The Russian government has won a further concession from the foreign partners at the world’s largest combined oil and natural gas field, known as Sakhalin-2, which is being developed in Russia’s remote Far East. Last week, Gazprom, the Russian energy monopoly, took majority control of the […] Sakhalin II intrigue continues with news of a secret ‘protocol’

By John Donovan News of a “secret protocol” between Shell and the Russian government has leaked out today. The Russians evidently wanted to further embarrass Shell management. Note that there is no mention of Mitsui and Mitsubishi involvement in the secret deal.  Shell refuses to comment on the “confidential” secret agreement. This comes just days […]

Voice of America: U.S. Scholar Highlights Russia’s Energy Clout

U.S. scholar Marshall Goldman says energy wealth and control over export pipelines have made Russia more powerful than at any time in its history. Professor Goldman told the Jamestown Foundation that Russia’s post-cold war power is built on its oil and gas resources. He said both eastern and western Europe have become dependent on Russia […]

MosNews: Shell Signs Secret Protocol on Sakhalin Project with Russian Government

Created: 28.12.2006 12:45 MSK (GMT +3), Updated: 13:29 MSK Royal Dutch/Shell signed a secret protocol with the Russian government as part of its deal to sell half of the Sakhalin-2 project to Gazprom, allowing Shell to boost spending but not as much as it wanted, Russian business daily Vedomosti reported on Thursday, Dec. 28. Shell […]

Bloomberg: Shell Accepts $3.6 Billion Cut in Sakhalin-2 Recovery (Update1)

By Torrey Clark Dec. 28 (Bloomberg) — Royal Dutch Shell Plc and its Japanese partners will take on $3.6 billion of costs themselves to develop the Sakhalin-2 oil and gas project in Russia, lowering the amount state-run OAO Gazprom will spend to join the project and the hastening the state’s share in the profit. Sakhalin-2’s […]

MarketWatch: Russia, Belarus locked in spat over gas: Gazprom threatens to cut off supplies to neighbor on Jan. 1

Last Update: 7:21 AM ET Dec 28, 2006 By Aude Lagorce, MarketWatch LONDON (MarketWatch) — The European Commission on Thursday called for Russia and Belarus to find a rapid solution to a dispute over natural-gas prices that threatens damage to relationships between the two long-term allies and to disrupt deliveries to the continent.  “The Commission […]

The Morning Call: Keeping the lid on: Slowing economy may hold oil prices down in 2007

By Brad Foss Of The Associated Press After a bonanza in 2006, Big Oil is poised for a slightly less big year in 2007, as slowing U.S. economic growth and an expanding global supply cushion may help keep a lid on prices. Oil prices will continue to hover at historically high levels, analysts say, because […]

Reuters: Shell inks secret protocol with Russia on Sakhalin

Thu Dec 28, 2006 7:26 AM GMT MOSCOW (Reuters) – Royal Dutch Shell signed a secret protocol with the Russian government as part of its deal to sell half of the Sakhalin-2 project to Gazprom, allowing Shell to boost spending but not as much as it wanted, a newspaper said on Thursday. Shell (RDSa.L: Quote, […]

UpstreamOnline: Shell signs ‘secret’ Sakhalin pact

By Upstream staff Shell has signed a secret protocol with the Russian government as part of its deal to sell half of the Sakhalin 2 project to Gazprom, allowing Shell to boost spending but not as much as it wanted, it was reported today. Shell is now allowed to boost spending in the giant Sakhalin […]

New York Times: Nigerian Oilfield Sieges End, Shell Resumes Output

By REUTERS Published: December 28, 2006 Filed at 4:21 a.m. ET PORT HARCOURT, Nigeria (Reuters) – Two different armed groups have lifted sieges of two oilfield stations in Nigeria, releasing at least 20 workers, industry spokesmen said on Thursday. About 18 workers at Agip’s 40,000 barrel-per-dayTebidaba oilfield were released on Tuesday after five days in […]

The New York Times: Norton to Join Shell

By BLOOMBERG NEWS Published: December 28, 2006 Royal Dutch Shell, Europe’s largest oil company, said yesterday that Gale A. Norton would join the company as general counsel, almost 10 months after she resigned as United States secretary of the interior. Ms. Norton, 52, will take the position in mid-January and work primarily from Colorado, the […]

Irish Times: Shell terminal in Mayo

Published: Dec 27, 2006 Madam, – It seems that David Rolfe (December 21st), while pragmatic and concerned, entirely misses the most significant aspect of the so-called Mayo gas field. It is neither Mayo’s, nor Ireland’s gas, as the resource was handed over to a multinational company by a former Minister who is known to have […]

BBC Monitoring Service – United Kingdom: Summary of Russian press for Thursday 28 December 2006

Published: Dec 28, 2006 From Vedomosti 1. Vera Surzhenko and Aleksandr Bekker article reports new details of the Sakhalin-2 deal. The authors say that the Russian authorities have agreed with foreign investors that Shell, Mitsubishi and Mitsui will invest in the project additional 3.6bn dollars which will not be compensated by the production sharing agreement, […]