By JULIANE VON REPPERT-BISMARCK
January 31, 2007 5:56 p.m.

BRUSSELS — The European Commission opened a second front in its fight against climate change with a call for binding rules that will force oil refiners to cut carbon-dioxide emissions from vehicle fuel 10% by 2020.

The commission is facing resistance from Europe’s auto industry and national governments over a plan to cut emissions from new cars. Now it is picking a potential fight with oil companies.

If endorsed by European Union governments, the law will take effect in 2011, EU officials said. The plan represents another step toward the commission’s goal to cut dependence on imported fossil fuels by increasing the use of biofuels and curb the economic impact of global warming.

The commission has been forced to delay by a week a decision on a separate, hotly debated law that would force auto makers to slash carbon emissions from new cars 25% by 2012. German Chancellor Angela Merkel said she will block such a rule. Auto makers warned of massive job cuts and vowed to fight the plan.

Cornered by such a powerful lobby, European Commission environment chief Stavros Dimas is “moving in the direction” of a compromise, an EU official said.

This would involve raising a mandatory limit on car emissions to 130 grams a kilometer on average from a 120 grams-a-kilometer cap planned at present, the official said. Today, cars generate an average of 160 grams of carbon dioxide for every kilometer traveled, accounting for about 10% of Europe’s carbon-dioxide pollution.

The proposals represent an early, though tentative, victory for Europe’s auto industry — particularly German manufacturers such as DaimlerChrysler AG and BMW AG. The industry has been lobbying EU environmental regulators to rely less on technological improvements — such as more-fuel-efficient engines — and more on the promotion of clean-burning fuels.

The commission admitted it has no overall estimate of how much the cuts will cost oil companies.

The industry “definitely” will be fighting for amendments, said Peter Tjan, secretary-general of Europia, a Brussels group that represents such companies as Exxon Mobil Corp. and Royal Dutch Shell PLC.

Yesterday’s plan threatens to entangle the oil industry in costly red tape, Mr. Tjan said, rather than focusing on the role of auto makers in reducing emissions.

“We support carbon-dioxide cuts in transport,” Mr. Tjan said. “But we want to see laws on cars.”

–Stephen Power in Frankfurt contributed to this article.

Write to Juliane von Reppert-Bismarck at juliane.vonreppert@dowjones.com

Crude-oil futures surged to a new four-week high Wednesday after U.S. government data showed distillate inventories, which include heating oil, fell more than expected amid continued forecasts for cold U.S. weather.

Here is Wednesday’s roundup of oil and energy news:

* * *
CNOOC UNDER PRESSURE: Domestic production troubles are putting pressure on Cnooc to raid its multibillion-dollar war chest and make an acquisition, but potential targets are unlikely to come cheap despite the recent fall in oil prices. China’s largest offshore oil producer by output is facing a shrinking field of midsize companies that it could buy following a flurry of corporate activity globally in the past year. It may have to content itself with bidding for producing fields that come with neither the prestige it wants nor significant size, analysts say.

•Next Step in Big China Venture: China’s government approved part of a plan to build a giant oil-refining and petrochemical plant, an important step forward in a long-awaited venture involving Saudi Arabia, China and Exxon Mobil.

•EU Calls for Emissions Curbs: The European Commission called for binding rules that will force oil refiners to cut carbon-dioxide emissions from vehicle fuel by 10% by 2020. The commission has been forced to delay a decision on a separate, hotly-debated law that would force auto makers to slash carbon emissions from new cars 25% by 2012.

•Climate Change Science Quieted: A NASA scientist accused the White House of regularly trying to quiet or alter reports on climate change, the Financial Times reports.

•Turkey/Greece Spat Heats Up: Turkey had no right to interfere with plans by Cyprus for oil and gas exploration in the region, regional rival Greece said, accusing Ankara of violating international law

•Most Oil Removed From Shipwreck: Most of the oil has been removed from the Napoli, the tanker ship that ran aground off the coast of England last week, the BBC reports.

•Rights Group Blasts Nigerian State: New York-based Human Rights Watch said its study of one of Nigeria’s oil-producing states found that officials squandered or stole public money, some hospitals required patients to bring their own beds, and schools were running out of chalk.

•Scary Palms: Palm oil, once considered an environmentally friendly alternative to fossil fuels, has become an ecological nightmare, the New York Times reports.

EXTRACT: An investigation of companies in which the foundation invests £16.8 billion led to accusations that it was profiting from firms whose activities contribute to the problems, such as poverty, debt and disease, that it was trying to solve.  IN EARLY January an investigation by the Los Angeles Times found that the foundation had invested over £254 million in oil companies such as Royal Dutch Shell, Exxon Mobil, Chevron and Total, whose practices are being blamed for causing health concerns in Nigeria; problems the Gates Foundation is contributing money to solve.

THE ARTICLE

STEPHEN MCHINTY
 (smcginty@scotsman.com)

THE richest man on earth can afford to travel light. Bill Gates, the founder and chairman of Microsoft, arrived in Edinburgh yesterday afternoon, in a people carrier with a single security guard. He may have lacked the personal protection of princes and prime ministers, yet the tall, diffident man in the dark, pinstriped suit and maroon tie is arguably more powerful than either.

At Bute House, the First Minister’s official home, Gates demonstrated his influence by dispensing largess: 100,000 Scots not in education or employment would be trained in computer skills in a partnership between Microsoft and the Scottish Executive.

The global scale he operates on made him dismiss a question on Scottish independence as if it were inconsequential. Still, at least he is punctual. Journalists were briefed that a press conference would last 14 minutes and he departed just 19 seconds late, to collect an honorary degree at Edinburgh University before attending a private meeting with Ian Wilmut, the scientist who led the team that created Dolly the Sheep, for a cosy conversation on biotechnology.

So just how much power does this man have? When asked to respond to the brickbats that Microsoft is too powerful for an unelected corporation, Gates responded: “Governments have the power over all the key social issues. Microsoft is in a very competitive environment.

“Every few years people tell us we are going to bust and it is true if we do not redesign our products and do great things, we will be replaced.”

The latest “great thing” is the launch yesterday of Vista, the new version of the Windows operating system, which after an investment of £3 billion, the company hopes will continue its dominance of the market with 100 million computers expected to use it by 2008.

Bill Gates, who has a personal net worth of $53 billion (£27bn), no longer lives in a binary world of 1 and 0, on or off, black or white, yet there are those who insist on viewing him in the stark terms of good or bad. The case for the defence of “saint” Bill is the remarkable growth of the Bill & Melinda Gates Foundation, which is the Microsoft of charities - the largest transparently operated charitable foundation in the world.

Launched by Gates with a donation of £54 million in 2000, it has since swollen to an endowment of £17 billion, and each year donates a minimum of £764 million to a wide variety of agencies and charities.

The foundation’s primary purpose is to enhance healthcare and reduce extreme poverty in the Third World, and it has focused on the eradication of malaria and the development of a vaccine against AIDS. In America, Gates has directed resources towards assisting minorities into education, with a $1 billion grant to the United Negro College Fund as well as funding better access to information technology.

WITH its headquarters in Seattle and branch offices in Washington and New York, the charity is not another idle toy for the wealthiest man in the world. Gates has made clear it is his future. In July 2008, Gates will step down from his day-to-day role at Microsoft and step up his already considerable involvement with the foundation.

The business suit and the boardroom is quickly being replaced by khaki trousers, blue button-down Gap shirts and the field trip, as Gates travels across Africa and India visiting aid projects. A goal he has set himself is to bring his analytical mind and hard-headed business practice to bear on the global problems of poverty and ill-health.

Those poorly prepared for meetings with the foundation emerge shredded by his persistent and lacerating questions.

He is also credited with making philanthropy chic and inspiring Warren Buffett, the second-richest man in the world, to donate shares worth £15 billion, which will eventually double the endowment to over £30 billion.

The reformation of Bill Gates from computer geek to charity pin-up - joining Bono on the cover of Time magazine as Humanitarian of the Year and being voted eighth in the list of “Heroes of Our Time” by the New Statesman - does not, however, convince those critics who continue to view him, in the jargon of Star Wars, as “the dark side of the Force”.

Microsoft business practices have been described as “unethical” and “anti-competitive” and were severely criticised in 1998 by a US judge who found the company guilty of monopolisation and blocking competition. Gates’s own testimony, in which he argued over the meaning of words such as “compete”, “concerned”, “ask” and “we”, was deemed to be an insight into his belligerent and bullying tactics in the boardroom. Employees say he has been known to shout lines such as: “That’s the stupidest thing I’ve ever heard” and, most ironically given his new role: “Why don’t you just give up your [stock] options and join the Peace Corps?” Particularly grating to programmers struggling to overcome a complex problem was: “Do you want me to do it over the weekend?”

The Microsoft campus in Washington state employs over 28,000 staff in what has been described as a “velvet sweatshop”, where “Microserfs” compete to pull the longest working shifts and then bed down on cots underneath their desks. Still, the financial compensation of stock options, which can be worth millions for senior staff, remains an attraction.

The tactics that Microsoft has adopted to remain the No1 player in the computer world have been characterised as “embrace, extend and extinguish” in that it “embraces” a competing product, “extends” its capability and then “extinguishes” it by creating its own incompatible version.

Yesterday Microsoft released its latest operating system, Vista. That was immediately criticised by the Green Party, which said the design erodes consumer rights, forces the user to invest in expensive and environmentally damaging hardware upgrades and restricts the potential for information technology.

Patrick Harvie, the Green MSP for Glasgow, said: “There will be thousands of tonnes of dumped monitors, video cards and whole computers that are perfectly capable of meeting users’ needs if they can use free software instead of Vista.

“Microsoft is trying to dictate the way that video content is delivered in order to corner the market.”

To some, Bill Gates is the epitome of Big Brother: a man whose ubiquitous computer systems, according to Richard Stallman, founder of the Free Software Foundation, are planned to “make your computer obey them instead of you”. Yet, recently, it has been Gates’s philanthropy that has come under attack, leading him to ponder that no good deed should go unpunished.

An investigation of companies in which the foundation invests £16.8 billion led to accusations that it was profiting from firms whose activities contribute to the problems, such as poverty, debt and disease, that it was trying to solve.

IN EARLY January an investigation by the Los Angeles Times found that the foundation had invested over £254 million in oil companies such as Royal Dutch Shell, Exxon Mobil, Chevron and Total, whose practices are being blamed for causing health concerns in Nigeria; problems the Gates Foundation is contributing money to solve.

In a letter to the newspaper, Patty Stonesifer, chief executive of the foundation, said “changes in our investment practices would have little or no impact” on the suffering in the report.

Today Bill Gates will talk to Gordon Brown at the Microsoft Government Leaders’ Forum, at Holyrood. After travelling the world he still found words of praise for Scotland, but yesterday issued a challenge.

He said: “Scotland is known for a long history of innovation, being involved in business enterprise and top educational institutions.

“It has a good reputation for governance that focuses on business opportunity. Scotland is doing its part to tell its story, but competition for places to do business nowadays is very high.

“Scotland has done well if you look at the employment rate of people who have a good education. Education is going to keep it in a good position.”

GATES ON
POVERTY
“Is the rich world aware of how four billion of the world’s six billion live? If we were aware, we would want to help out, we’d want to get involved. We need to get this new generation drawn into philanthropy”

BUSINESS
“Your most unhappy customers are your greatest source of learning”

MISTAKES
“Sometimes we do get taken by surprise. For example, when the internet came along we had it as a fifth or sixth priority”

KNOWLEDGE
“Information technology and business are becoming inextricably interwoven. I don’t think anybody can talk meaningfully about one without the talking about the other”

THE PC
“Personal computers have become the most empowering tool we have ever created. They are tools of communication, they are tools of creativity … and they can be shaped by their user”

THE WORLD ON GATES

“The only problem with Microsoft is they just have no taste, they have absolutely no taste - I don’t mean that in a small way, I mean that in a big way - and what that means is they don’t think of original ideas and they don’t bring much culture into their product”
Apple boss Steve Jobs

“Gates is the ultimate programming machine. He believes everything can be defined, examined, reduced to essentials, and rearranged into a logical sequence that will achieve a particular goal”
Political analyst Stewart Alsop

“It’s a business I don’t know anything about, but I admire Bill Gates enormously. I know him individually, and I think he is incredible in business”
Tycoon Warren Buffett

“The idea that Bill Gates has appeared like a knight in shining armour to lead all customers out of a mire of technological chaos neatly ignores the fact that it was he who, by peddling second-rate technology, led them into it in the first place”
Author Douglas Adams

“Probably the most dangerous and powerful industrialist of our age”
Scott McNealy of Sun Microsystems

http://news.scotsman.com/scotland.cfm?id=161002007

19:01 | 31/ 01/ 2007 

ST. PETERSBURG, January 31 (RIA Novosti) - A decision on whether to set up a state holding to oversee the development of Russia’s offshore oil and gas deposits could be made in the first three months of 2007, a deputy natural resources minister said Wednesday.

Russia has moved to tighten state control over its mineral resources in recent years, cutting foreign participation in the oil and gas sector. State-controlled giants Gazprom [RTS: GAZP] and Rosneft [RTS: ROSN] have been appointed to control all hydrocarbon deposits on the continental shelf.

Alexei Varlamov said the idea of establishing a national holding, or tasking the two companies with setting up subsidiaries “to fulfill those national objectives”, was currently under discussion.

“The Natural Resources Ministry has drafted a plan for shelf development, and submitted its proposals on the matter to the government and the [presidential] administration,” Varlamov said.

The Russian government approved in general terms Wednesday draft laws on foreign investment in the country’s strategic assets, which among other restrictions stipulate that foreigners should only be able to buy controlling stakes in energy, military-related and other enterprises classed as “strategic” with the permission of a government commission, and after approval from the Federal Security Service (FSB).

Russian officials say the measures aim to make mechanisms of state control over energy deals more transparent and understandable to foreign investors, and ensure the country’s security and interests in sensitive spheres. However, critics say the decisions could harm Russia’s investment climate.

Last year, Russian authorities applied pressure to reduce foreign companies’ shares in oil and gas projects being implemented under production-sharing agreements allowing for major tax and other privileges.

In December 2007, natural gas monopoly Gazprom acquired a 50% plus one share in the Sakhalin II liquefied natural gas project off Russia’s Pacific coast for $7.45 billion. Up until the deal, operator Royal Dutch Shell had come under months of intense pressure from environmental regulators for large-scale ecological destruction caused in the region.

January 31, 2007
Carl Mortished: European Briefing
 
Every morning as he brushes his teeth, a European oil company chief is reminded of the big question: is his business more like a tube of toothpaste or a glass of water?

If the latter, his job is to make money by being efficient, to keep the tap flowing, the water clean and the glass adequately replenished. 
 
A glass half-empty or half-full is the conventional view of integrated oil companies. These are utilities: there is plenty of oil and gas about and the job is to invest adequately, not overfilling the glass, in order to maximise the amount of money that flows from the taps and pipes.

The other view is that the business of big oil is to capture scarce resources. It’s about squeezing as much as you can out of the wrinkly tube. Oil companies are custodians of wasting assets: it’s all about reserves, who owns the barrels and the price, monetary or political, to acquire more of them.

Suddenly the debate over what oil companies are about is becoming shrill — and not only because the supporters of peak oil theory are getting more noisy. Whether or not the global oil industry has reached maximum output at some 85-90 million barrels per day, the stock market seems to have lost its ability consistently to price risk in the oil sector.

On multiples of forecast earnings, the gap between the value of the European oil majors (Shell, BP and Total) and the leading American competitor ExxonMobil has widened dramatically. At the same time, the price-earnings multiples of the “risky” emerging market companies have, counter-intuitively, soared as well.

You might think that the market is getting Exxon right — it is a bit better at running the machinery of oil. Capital spending at Exxon is tighter, cashflow is stronger and, Exxon Valdez notwithstanding, it has had fewer operational hiccups and less evidence of slipshod management in recent years. If the market’s job is to value each company’s rigs and refineries in terms of their future cashflow, then arguably Exxon’s kit ought to fetch a valuation, say, 10 per cent higher than BP or Shell.

A much higher premium would be wrong — there is no reason why a company of the scale of Exxon should grow much faster than Shell. The two sell similar quantities of the same products at identical prices in a market where demand rises on average at between 1 and 2 per cent a year. If growth rates should, in the long term, even out, the valuation argument is about efficiency: which firm generates more cash from its bag of assets. At Deutsche Bank, analysts worry that the market’s valuation of Exxon’s asset base is soaring while that of Shell and BP is hammered. Adjusted for inflation, Deutsche says that the long-term asset multiple of Exxon is about 1.7 times, compared with BP’s 1.6. That sounds like a sensible premium for Exxon’s efficiency, but today it’s all gone loopy. The market values Exxon at 1.9 times its adjusted asset base, while BP is 1.4 times and Shell just 1.2 times.

Spending is an issue. Add a few billion dollars to the annual capex budget and a company’s return on capital shrinks. Exxon is spending proportionately less than its rivals, but should we really draw comfort from Exxon’s miserly way?

Further afield, investors are flirting with Rosneft and Gazprom, hardly models of capital efficiency. Their extravagant ratings are based not on cashflow but on growth potential. The market thinks that Russia’s tube of toothpaste is family size. BP and Shell struggle to squeeze the last smidgin from the North Sea and Exxon hopes no one notices that its toothpaste tube is miles offshore of Qatar in the Gulf, halfway to Iran.

Efficiency does matter, says the market to our bleary-eyed oil chief. But don’t fool yourself: barrels count, too. It’s not enough to be a disciplined process engineer and, since the massive Kashagan discovery in the Caspian Sea in 2001, legions of petroleum geologists armed with billions of dollars of exploratory wells have had paltry success. Diplomacy is the skill that matters, the silver-tongued art of opening doors. Unfortunately, the capital markets are uncertain how to value something so ephemeral. Will Exxon continue to thrive without a strong position in Russia? Will Total recover prewar licences in Iraq? Is TNK-BP secure and will the Kremlin throw Shell a meaty bone or two after seizing the carcass in Sakhalin?

It is many decades since the the future of the big oil companies has been so dependent on the art of speech and persuasion. In each of the giant companies, there has been a recent management transition or a changeover is imminent. No wonder the market is confused.
 
http://business.timesonline.co.uk/article/0,,8210-2575327,00.html

Project a Joint Venture of Gazprom, Shell, Mitsui & Mitsubishi

LONDON, Jan. 31, 2007 (PRIME NEWSWIRE) (PRIMEZONE) — CO2 Tech (Pink Sheets:CTTD) President, Ms. Helga Schotten, today announced that CO2 Tech, a UK-based provider of cutting-edge, anti-global warming technology solutions announced that CO2 was commissioned to perform environmental effects monitoring and analysis and develop environmental solutions to the Sakhalin II Project, one of the largest new energy development projects in the world today.
 
Sakhalin II, one of the biggest new energy developments in the world, is a joint venture operated by Sakhalin Energy Investment Company Ltd. (SEIC) (owned by OAO Gazprom (Gazprom), Royal Dutch Shell plc (Shell), Mitsui & Co., Ltd. (Mitsui) and Mitsubishi Corporation (Mitsubishi)). Phase I of the project produces oil from an offshore platform, while Phase II includes two further offshore platforms, 1800 km of pipelines and Russia’s first LNG plant. Peak production is expected to reach 180,000 barrels per day, and 9.6 million tons of LNG per year.

The construction of Sakhalin II is the largest inward investment in Russia and the largest integrated oil and gas project in the world. The objective of the Sakhalin Energy project is to commercially develop, operate and market the huge energy reserves in frontier and arctic environments in Russia, for the sustainable benefit of shareholders, the Russian Federation, the Sakhalin Oblast and the wider community.

CO2 will conduct an environmental analysis of the project delivery routes in terms of detrimental effects on forests, which has a direct impact on oxygen concentrations in the atmosphere. CO2 will also monitor potential emissions from the project’s systems, and develop appropriate environmental solutions to the project’s partners.

The absence of existing infrastructure means it is being built from scratch in sub-Arctic conditions. These reserves pose huge challenges for the oil and gas sectors. The project brings new management techniques as the first mega-project in the Russia Federation requiring the simultaneous execution of several large-scale sub-projects.

You can read more about Sakhalin II at http://www.shell.com/home/Framework?siteId=envandsoc-en&FC2=/envandsoc-en/html/iwgen/projects_and_locations/sakhalin/sakhalin_26042006.html

About CO2 Tech

CO2 Tech, a UK-based company provides cutting-edge, sophisticated anti-global warming technologies along with a full range of expert consulting, and environmental products and services to businesses, industries and governments. CO2 Tech’s innovative approach provides high quality, maintenance-friendly system solutions that offer cutting-edge technological developments and outstanding reliability. CO2 Tech has extensive first hand experience with all major air pollution control equipment including air pollution control systems, removal of fine solid particles from gas/air units, evaporator units, reduced CO2 emission units.

CO2 Tech offers its customers the benefits of its cutting-edge technological products, proprietary innovations and rich experience in industrial applications of control equipment, with petroleum, factories, mining, metals, boilers, glass, chemicals, woodworking, quarries, textiles and most other heavy industries. CO2 Tech fosters strong partnerships and alliances with leading environmental engineering companies and research institutions worldwide to develop, manufacture and market high-quality instruments, systems, and services for its clients.

You are invited to learn about CO2 Tech and the full range of its technologies and services at our website http://www.co2-tech.com. For more information, please contact info@co2-tech.com or visit us on our website at www.co2-tech.com.

Forward-Looking Statements

Certain statements in this news release may contain “forward-looking” information within the meaning of the Federal securities laws. All statements, other than statements of fact, included in this release may include forward-looking statements that may involve risks and uncertainties. There can be no assurance that such statements will be accurate and actual results and future events could differ materially from those anticipated in such statements. The Company undertakes no obligation to update forward-looking statements to reflect subsequently occurring events or circumstances or to reflect unanticipated events or developments.

CONTACT:  CO2 Tech Ltd.
          Ms. Helga Schotten
          +44 (845) 869 4553
          Fax: +44 (845) 020 4259

05:49 AM CST on Wednesday, January 31, 2007

HOUSTON – At least 32 Shell Oil Co. workers were injured early Tuesday when a train collided with a bus carrying contract employees at the compa