By Wilt Staph

It’s all happening in the utmost secrecy, but it is now clear that determined efforts are underway to keep BP out of American hands. That ExxonMobil, Chevron and ConocoPhillips all have the financial resources to launch a hostile bid is not in doubt and the acquisition of BP’s huge assets would be a coup for any one of the three largest American oil companies. The move would also be very welcome to the White House – the President could characterise it as bringing American assets back into American hands. A substantial part of BP was previously Amoco – and there was no more American company than that. The submergence of Amoco into BP was seen as something of a  national humiliation by some Houston oil men and they would love to fly the stars and stripes over Amoco’s’ once assets again.

Meanwhile at BP’s London headquarters top management is desperately seeking a solution that would keep BP out of American hands – and in Brussels the European Union would like an all-European solution to the problem if they can find one. BP and the EU would prefer BP to merge with one of the two European oil multinationals – Royal Dutch Shell or Total. Although much of the talk has been of a Shell/BP merger (one nearly happened a few years ago in rather different circumstances) it is Total that the EU might favour.  Total has a recent history of entrepreneurship rather greater that the deeply conservative Anglo/Dutch Shell and their mergers with Elf and Petrofina are seen as having been a big success.

One thing that unites Washington and Brussels is the wish to keep BP out of the hands of predators from Russia, China or the OPEC countries. Each of the OPEC countries has a national oil company with the resources to acquire BP – and so do the Russians. The West would be extremely concerned if BP’s hydrocarbon assets, the second largest of any independent oil company after ExxonMobil, fell into potentially hostile hands. So whilst BP is reportedly in discussions in Moscow, Kuwait, Abu Dhabi and elsewhere seeking investment that would give up some of their equity in return for financial underpinning, such an outcome is not popular in the corridors of political power in Europe and the United States. The position of the British government is unclear. BP was the UK’s biggest company and its collapse is a concern not just because of the economic consequences but because of the loss of prestige that would result. Whilst British Government financial support can be ruled out for ideological reasons there may be Government pressure on city investors to stand by BP in its hour of need. The coalition cabinet would probably prefer a Shell/BP merger to the other options – the British element of such a corporation would be dominant. But Shell’s nervous and inward-looking top brass are not thought to be very keen on such a move.

By John Donovan

Here we are again in the midst of a major Shell advertising campaign with huge colour adverts in the UK national press for a new Shell wonder fuel, this time invented by “Shell Fuel Scientists”: Its called Shell FuelSave

Its like a walk down memory lane for those of us who remember the launch of another wonder fuel by Shell in 1986, Formula Shell, based on new technology and with a scientific image deliberately conjured up by Shell.

There was only one small problem. The new wonder fuel ruined many car engines and it did so on an international basis.

Here is a video clip from the Formula Shell advertising blitz when everything looked promising.

I have been unable to find any media reports of the subsequent debacle. Shell news management team must have been working overtime.

However, we have an account by Shell historians.

Extracts from pages 204 & 207 from ‘A History of Royal Dutch Shell, volume 3.’

To create brand distinctiveness, Shell launched two new brands on the basis of new technology and supported by heavy advertising. Helix motor oil in 1985 and Formula Shell in 1986.  The word Formula in the new brand for gasoline was chosen for its scientific connotations. Also, it appeared unchanged in many languages, which was important for international advertising.

In the UK, Formula Shell was launched with the punchline:

‘From today not all petrol is the same.’

The launch of Formula Shell in Europe resulted in higher sales. This early commercial success, however, became qualified when it appeared that in a small number of cars the new gasoline caused inlet values to burn. Negative publicity was inevitable, though the damage occurred in only four countries, Denmark, Norway, Malaysia, and the UK.

It took Shell technical experts in collaboration with the motor manufacturers more than a year to establish the cause of the problem. In the meantime, the Formula Shell brand was withdrawn from a number of markets, including the UK.  Once the problem had been identified, the product was reformulated and relaunched, in some markets under a new brand name.

The degree of spin is self-evident -- damage in ONLY four countries…

Lets hope for the sake of the motoring public that Shell boffins have got it right this time.

RELATED:

Shell false claims over FuelSave featured on BBC TV Watchdog programme: 21 October 2011

By Cesar Zambrano

22 July 2010

In our current economic age of globalization, asset classes are becoming increasingly correlated.  Movements in the equity markets affect currency values, which affect economic growth in corresponding countries, which affects other assets such as real estate, and the correlations go on and on.  One of the most clear asset correlations that currently exists in financial markets is the relationship between the oil industry and the foreign-exchange market.

The price of oil is extremely volatile.  Its price movements are subject to a vast range of factors including economic growth, geopolitical events, supply and demand, and host of other factors.  The volatility in oil prices can wreak havoc on oil industry leaders such as refineries and producers, but it is a haven for speculators.  Individual traders and hedge funds alike have been speculating on the price volatility of oil for decades.

Understanding the relationship that oil has with specific currencies and nations can help investors take advantage of these volatile movements.
Among developed nations, Canada is a leading producer and exporter of oil.  In fact, among developed nations, Canada is one of the few net exporters of oil.  This means it exports more oil than it imports.  And Canada is not going to become less of a net exporter anytime soon.  In fact, according to current measurements, Canada has the second largest reserves of oil in the world behind oil giant Saudi Arabia.  Canada’s primary trading partner is, of course, its good neighbor to the south, the United States of America, but as the economy of China continues to expand at a ferocious rate, China’s demand for Canadian oil is also rising steadily.

Due to its large oil operations, Canada’s economic growth is heavily dependent on the oil industry.  As demand for oil increases, Canada’s economic growth tends to increase as well.  As demand for oil decreases, Canada’s economic growth tends to decrease as well.  Thus, there is a tight correlation between the price of oil and economic growth activity in Canada.  Furthermore, since the Canadian economy is so dependent on the oil industry, the Canadian currency also tends to be heavily affected by volatility in the price of oil.  As the price of oil increases, the Canadian Dollar tends to strengthen in value and as the price of oil decreases, the Canadian Dollar tends to decrease in value.  As many forex trading guides discuss, the correlation is extremely tight.

As evident in the chart above, the correlation between the price of oil and the strength of the Canadian Dollar is very strong.  Since Canada is the only developed nation that is a very strong net exporter of oil, the Canadian Dollar is really the only major currency that is affected positively when the price of oil rises significantly.  However, on the flip side of the coin, there are developed nations that are heavy net importers of oil.  What do you think happens to their economy during times of high oil prices?

Although Japan is a major exporter of goods and services, it definitely does not export oil.  In fact, Japan is one of the world’s largest net importers of oil.  Due to the fact that Japan is heavily dependent on importing oil in order to meet its domestic energy demands, its economy tends to be sensitive to extreme volatility in the price of oil.  As the price of oil increases significantly, the Japanese economy will suffer since it is required to pay higher prices for the same amount of oil.  Conversely, as the price of oil falls significantly, the Japanese economy will tend to be boosted since it can now purchase more oil for the same price.  In the latter example, Japan’s purchasing power of oil increases, which in turn boosts its economy.

A fascinating way to play the correlation between the oil industry and foreign-exchange markets is to take these two currencies, the Canadian Dollar and the Japanese Yen, and pair them together.  If the outlook for oil is positive over the next year, then the Canadian/Yen should appreciate significantly.  Conversely, if the price of oil is expected to decrease over the next year, the Canadian/Yen should depreciate significantly.  This is one way an investor can position himself or herself to take advantage of the tight correlation that exists between the oil industry and the foreign-exchange market.

About the author: Cesar Zambrano is a writer for ForexFraud.com, a website devoted to educating investors in the subject of frauds and scams. He has been interested in the stock market, investments, and spreading the word about fraudulent activities for much of his life, but has most recently fulfilled this passion by working for ForexFraud.com

By John Donovan

Published below is my self-explanatory correspondence with Royal Dutch Shell ethics boss Richard Wiseman, over the latest installment of leaked Shell internal emails, this time relating to the highly sensitive topic of the Corrib Gas Project in Ireland. More will follow.

The project has been dogged by controversy, including the jailing at Shell’s behest of the “Rossport Five” – members of the local population who have deep concern over safety and other issues.

The string of Shell internal emails from March and April 2009, involve over half a dozen Shell employees and includes reference to senior Shell executives. The Shell people involved discuss concern over well ownership and issues relating to “long term suspension” of “subsea gas wells”.

In this connection, one email says:

“In this case, risk may be mainly reputational rather than safety or environmental (subsea gas wells).”

Note that it says “may be” mainly reputational.  In other words, the risk could be to safety or the environment.

In view of recent events in the Gulf of Mexico and the just announced delay on the Corrib project resulting in a further 3 year extension of “long term suspension”, the local population is likely to be alarmed at these revelations of internal concern at Shell that has not revealed to the public.

MY EMAIL CORRESPONDENCE WITH SHELL

EMAIL TO RICHARD WISEMAN, CHIEF ETHICS & COMPLIANCE OFFICER, ROYAL DUTCH SHELL PLC

From: John Donovan [mailto:john@shellnews.net]
Sent: 21 July 2010 12:00
To: Wiseman, Richard M RDS-LSX
Subject: Question-mark over ownership of Corrib wells

Dear Mr Wiseman

We have reason to believe that the leaked Shell internal emails below are authentic.

If you do not indicate otherwise within 24 hours, we will take the lack of a denial as confirmation of authenticity.

If you wish to supply any comment for unedited publication along with the emails, you are welcome to do so.

If you need more time to check this matter out, just let me know. As always our first priority is publishing accurate authentic information.

If there is any exceptional reason why we should not publish, please say so. As you know, on both occasions that Shell has asked us not to publish, indicating exceptional grounds, we have agreed not to do so. This will be our continuing policy.

Regards
John Donovan

REPLY FROM RICHARD WISEMAN

From: richard.wiseman@shell.com
Date: 21 July 2010 16:50:33 GMT+01:00
To: john@shellnews.net
Subject: RE: Question-mark over ownership of Corrib wells

Dear Mr Donovan

As ever, you should not take my silence to be an admission of authenticity.  I am surprised that you continue to try to force an admission by default.  I can by no means guarantee always to receive your emails within 24 hours of your sending them and in the interests of the accuracy and authenticity you claim to adhere to, I should have thought that you would never rely on silence as confirmation of your assertions, particularly in the light of the repeated requests from me and others that you do not do so.

Regards
Richard Wiseman

Chief Ethics and Compliance Officer
Royal Dutch Shell plc
Shell Centre, London SE1 7NA

Registered in England and Wales number 4366849
Registered Office:  Shell Centre, London, SE1
Headquarters: Carel van Bylandtlaan 30, 2596 HR
The Hague, The Netherlands

Email: richard.wiseman@shell.com
Internet: http://www.shell.com

RESPONSE BY JOHN DONOVAN 21 JULY 2010

From: John Donovan <john@shellnews.net>
Date: 21 July 2010 21:28:13 GMT+01:00
To: richard.wiseman@SHELL.com
Subject: Re: Question-mark over ownership of Corrib wells

Dear Mr Wiseman

As I made plain, you only had to let me know if you needed more time to investigate. Whenever Shell has asked for more time to respond, we have always agreed.

Readers of the correspondence will be able to draw their own conclusions for your “silence” over the authenticity of the latest crop of Shell internal emails, as I do. Readers will also be able to draw their own conclusions about who is trying to be open, constructive and fair.

As I have stated previously, you are free to say that Shell would like us to cease giving the company the opportunity to comment on draft articles or on the authenticity of Shell internal documents and emails leaked to us. If you tell us that this is the case, then we will cease.

Thus far, Shell has preferred to retain the option to have advance sight of such information and be able to comment, as Shell has done several times, or decline to comment, which is the most frequent response. Knowing as I do, certain matters in the pipeline for publication in the coming weeks, now would not be a good time for Shell to give up this facility, but the decision is yours. Having had dealings with us for getting on to two decades, you know that we would not wish to be a nuisance to Shell.

Regards
John Donovan

EMAIL CORRESPONDENCE ENDS

I also supplied the Shell internal correspondence to some individuals with expertise in such matters.

FIRST RESPONSE

Hello John

Nice string of emails, lots of egg on the face of Shell.

I am certain they are all genuine.

The issue clearly is that there is no well defined owner of these assets. In my view this is criminal because in case of an emergency one needs action fast and if there is no owner they all will be waiting on each other. Very clear that this has slipped through the cracks. It is possible that WE (I assume Well Engineering) is still the owner since the wells have never produced (I assume?). But normally drilling hands over in a formal and documented way the ownership of the wells after these are completed.

It also is very clear that there is confusion as to the status of the wells. In short, you have just uncovered a great mess and Shell Europe should be very ashamed of itself not to have found this out themselves and rectified it the same day, now it is because some minions with their heart in the right place are taking some belated action. The head honchos obviously were too busy following Voser’s decree to reduce staff, never mind the consequences….

This is going to be interesting. Perhaps you should ask how come there is no asset holder. How come this was not discovered in one of the great many audits on every topic one can think of. (Head office bureaucrats need to be kept busy after all). Clear example of ‘me first, business later’.  Sounds familiar?

If someone does not get sacked over this or severely reprimanded, it would show that Shell has lost its basic control mechanisms! But what do you expect with beancounters and HR people in charge of a technical business?

A concerned Shell retiree.

EXTRACTS FROM SECOND RESPONSE

The fact that people are expressing concern that there seems to be an implied shortcoming is in itself proof that there are some good people in Shell going above and beyond their allocated duties.

This is definitely another classic example of the quote from inside Shell: “95% of Shell staff are honest, ethical and extremely competent. Unfortunately the other 5% are in senior management positions”

I’m not saying that what has happened is completely kosher, but the names of the people expressing concern in the emails are not the villains – please don’t shoot the messengers!

Bearing in mind the above plea, we have decided not to publish the emails but will be supplying them to a third party for investigation.

Washington Post Staff Writer
Thursday, July 22, 2010

What good is being a multinational corporation if you don’t know how to make the most of loopholes in the law?

BP filed a lobbying report shortly before the second quarter deadline on Tuesday night, saying it spent $1.7 million influencing the government last quarter, an increase of 8 percent from the previous quarter.

That’s hardly surprising — but what’s more notable is the fact that it also reported its first-quarter lobbying decreased by 55 percent. Back in April, when the first-quarter report was due, BP said it had spent $3.5 million. On Tuesday, it filed an amendment saying it really only spent $1.6 million.

A company spokesman said the reason the figures changed is that one trade association, the American Petroleum Institute, revised how it calculated the amount of dues that BP would need to report. Corporations and trade associations have always had the option of using an IRS definition of lobbying or one created under the Lobbying Disclosure Act, which requires the filings.

“BP has always included in its lobbying disclosure the dollar amounts it pays to trade associations that are attributable to lobbying,” the company said in a statement. “Beginning in 2010, API provided this figure to BP using a different definition of lobbying contained in the LDA.”

That’s not what the API says. “We’ve always offered both figures,” a spokesman said.

The IRS definition, which is often used by trade associations, includes state-level lobbying and grass-roots lobbying, including expensive television ads and local campaigns. The LDA definition excludes state and grass-roots lobbying but includes a more exhaustive definition of executive-branch lobbying.

The API files its congressional reports using the LDA definition of lobbying. When API files to the IRS, it uses the tax-code definition. Member companies can then choose which way they want to report their dues. The IRS definition is almost always more.

The disclosure system relies on good-faith estimates of lobbying expenses, and both definitions are legally correct for BP to use.

“It’s possible that they changed it due to the public sensitivity to all their activities at this juncture,” said Kenneth Gross, a lawyer with Skadden, Arps, Slate, Meagher & Flom who represents corporations and trade associations on lobbying and political issues.

Such a large amendment is far from unusual. A review of a lobbying disclosure database shows that companies have made amendments of at least $500,000 to a report 50 times since the House and Senate adopted quarterly reporting in 2008.

Sometimes the amendments are clearly meant to fix mistakes, such as when Teach for America amended its third-quarter 2008 filing from $183,624,496 to $183,624.

But other times the amendments are less transparent. In April, Royal Dutch Shell amended three separate 2009 quarterly reports. Each was $800,000 and was amended to more than $2 million. A Shell lobbyist forwarded questions to a company spokesman, who did not return the call.

Lockheed Martin has made four changes to one report covering the first quarter of 2009. Three days before the April 20, 2009, deadline, it reported $6,350,000 and amended the figure to $6,380,000 a month later, before dropping it to $3,286,000 a month after that. In November it changed it to $3,530,000, and in April of this year, it changed it again to $3,570,000.

“In any instance where we needed to make a correction, we filed an amendment to make sure we were as accurate as possible in our reporting,” said Lockheed spokesman Jeff Adams. The company also decided to change the way it calculated its disclosures.

* * *The U.S. Chamber of Commerce reported $9.5 million in lobbying expenses for the second quarter, down from $25.1 million in the previous quarter and $71.2 million in the fourth quarter of last year. The decline reflects the fact that its aggressive campaign on health care was over. In the second quarter, the chamber focused on the financial regulations signed into law Wednesday and a bill regulating campaign finance.

In case you were wondering, the chamber uses the IRS method of disclosure that includes the television ads it ran on health care.

Several oil companies reported increased activity: Shell Oil increased lobbying 76 percent to $4 million and Chevron was up 27 percent to $3.9 million. The American Petroleum Institute increased lobbying 83 percent to $2.3 million.

But several electric utilities declined, including Southern Co., down 36 percent to $2.3 million, and the industry’s trade association, Edison Electric Institute, down 30 percent to $2.9 million.

SOURCE ARTICLE

The decision comes after the massive oil spill from a BP PLC well in the Gulf of Mexico and is a blow to the unit of Royal Dutch Shell PLC, which had hoped to drill three exploratory wells this summer in the Chukchi Sea.

By DAN JOLING (AP) 22 July 2010

ANCHORAGE, Alaska — A federal judge on Wednesday stopped companies from developing oil and gas wells on billions of dollars in leases off Alaska’s northwest coast, saying the federal government failed to follow environmental law before it sold the drilling rights.

The lease sale in February 2008 brought in nearly $2.7 billion for the federal government from the sale of 2.76 million acres in the Arctic waters of the Chukchi Sea, including $2.1 billion in high bids submitted by Shell Gulf of Mexico Inc.

U.S. District Judge Ralph Beistline said that the Minerals Management Service failed to analyze the environmental effect of natural gas development despite industry interest and specific lease incentives for such development.

The agency analyzed only the development of the first field of 1 billion barrels of oil — despite acknowledging that the amount was the minimum level of development that could occur on the leases.

Beistline enjoined all activity under the lease sale pending additional environmental reviews.

The decision comes after the massive oil spill from a BP PLC well in the Gulf of Mexico and is a blow to the unit of Royal Dutch Shell PLC, which had hoped to drill three exploratory wells this summer in the Chukchi Sea. Those plans were halted with President Barack Obama’s decision in May to delay offshore oil drilling in the Arctic Ocean until at least 2011.

Offshore drilling is strongly supported by Alaska Gov. Sean Parnell and other elected officials in the state, where upward of 90 percent of general fund revenue is provided by the petroleum industry.

However, environmental and Alaska Native groups have long contended it would be impossible to clean up a spill in icy Arctic waters, far from deep water ports and airports.

The nearest Coast Guard base is on Kodiak Island more than 1,000 miles away.

Copyright © 2010 The Associated Press. All rights reserved.

SOURCE ARTICLE

msnbc.com

Four of the world’s biggest oil companies involved, but not BP

msnbc.com staff and news service reports 21 July 2010

A new joint venture formed by four of the world’s biggest oil companies will develop a deepwater oil spill response and containment system for the Gulf of Mexico, according to reports in the financial press on Thursday.

Exxon, Shell, Chevron and ConocoPhillips are expected to announce Thursday that they will each contribute 25 percent to a $1 billion pool of money to fund a new deepwater spill response strike force, called the Marine Well Containment Company.

The venture would be able to mobilize within 24 hours to capture and contain oil spills in depths of up to 10,000 feet.

BP was not asked to join the venture, but may, along with other companies operating in the Gulf, be able to use the strike force.

“We don’t want to distract them at all,” Rex Tillerson, Exxon’s chief executive of Exxon told the Wall Street Journal.

The joint venture’s equipment will reportedly include a containment vessel capable of capturing up to 100,000 barrels of oil a day and other equipment to siphon any leaking oil up from the seafloor, the Financial Times reported.

The response team should be able to start mobilizing within 24 hours of an oil spill, and be fully in place within weeks, Sara Ortwein, vice president of engineering for Exxon Mobil Development Company, told the Wall Street Journal.

© 2010 msnbc.com

SOURCE