4 November 2011

Work to release gas trapped in a pipeline which spilled more than 200 tonnes of oil into the North Sea has been completed, Shell has said.

Divers earlier closed a relief valve after the incident at the Gannet Alpha platform in August.

Shell said the latest operation on the 4km structure had “further enhanced its stability and security”.

Plans are being made to deal with the remaining oil in the pipeline. An investigation into the leak is ongoing.

The impact of the oil spill in the North Sea was minimal, Scottish Fisheries Minister Richard Lochhead said in September.

The leak was discovered about 300ft (91m) below the surface.

The Gannet Alpha oil platform is 113 miles (180km) off Aberdeen.

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By Motley Fool Staff Posted 9:58PM 11/03/11

EXTRACTS

Last week, my Foolish colleague Alex Planes wrote a superb article offering the conclusion that “Cheap Oil Isn’t Coming Back,” an assessment with which I completely agree. Beyond that, though, I’d add, “And Cheap Gas Has a Brief Future, Too.” With that in mind, it’s crucial to look back at the recent earnings season to garner what we can about which major oil companies appear to offer the biggest boosts for our portfolios.

Shell’s full of LNG
Royal Dutch Shell also doubled its earnings in the past quarter, chalking up a growth rate that one advertisement used to refer to as “a silly millimeter” beneath Chevron’s. The company is casting a major lot with LNG, where it leads the world in production and distribution. That’s a sufficient reason for placing the Anglo-Dutch giant next to Chevron as another member of Big Oil’s most promising trio.

As an indication of the potential in natural gas — obviously including LNG — Shell’s gas earnings jumped by a whopping 40% outside the Americas, while they eked out just a 1% increase in this part of the world. A large part of that massive differential stemmed from the fact that gas is sitting near a paltry $4 in the U.S., while it yielded $15 for Shell in Asia. That being the case, should we deny that the U.S. price is headed for higher ground? Indeed, Asia’s levies appear to be headed even higher.

And then there’s Russia. Several years ago, I began a Motley piece with the observation, “Only a few things are absolutely inevitable in today’s world: death, taxes, and the Russian government’s lusting after energy projects once they’ve been developed by Western companies.” For instance, you’re probably aware that Shell was squeezed out of the operatorship of the country’s Sakhalin-2 project precisely five years ago.

I’m not certain of Shell’s likely future with the Russkies, since, with the world running low on potential major oil finds, the Western companies have displayed a curious tendency of dusting themselves off after having been body-checked by Vladimir Putin’s minions and heading right back into the game.

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European CEOs Prepare for Recession Risk Amid Greek Flipflopping

November 04, 2011, 4:53 AM EDT

By Tara Patel and Matthew Campbell

Nov. 4 (Bloomberg) — The squabbling over Greece’s future in the euro zone may push Europe’s economy into recession and reduce companies’ ability to compete internationally, according to executives of some of the region’s biggest corporations.

“There are legitimate reasons to be worried,” Alexey Mordashov, CEO of Russia’s second-biggest steelmaker OAO Severstal, said yesterday in an interview in Cannes, France, where the Group of 20 leaders are meeting this week. “We expect it to undermine growth in Europe.”

Europe’s financial crisis deepened yesterday as the European Central Bank unexpectedly lowered interest rates and President Mario Draghi said the region is heading toward a mild recession. Political leaders raised the prospect of the euro area splintering as Greece’s government veered on collapse. Business leaders held a parallel summit in the French southern resort city on competitiveness and economic growth that was dominated by questions on Greece and the future of the euro.

“We would have to prepare for a slower economy and maybe even a slight recession in Europe,” Peter Voser, CEO of Royal Dutch Shell Plc, Europe’s largest oil company, said in an interview in Cannes. “We need a fast solution and then we deal with the consequences. From a business perspective, if this goes on too long, so much uncertainty, investment will be delayed.”

‘Unsettling’

Bayerische Motoren Werke AG is already planning for slower economic growth next year and possibly a recession which may lead the world’s largest maker of luxury vehicles to reduce production, Chief Financial Officer Friedrich Eichiner said on an earnings conference call yesterday.

Growth has slowed for high-end carmakers from a record pace in the first half as Europe’s debt crisis unsettles consumers. Daimler AG, maker of Mercedes-Benz, last month reported its first earnings decline since the third quarter of 2009, burdened by expenses for new models.

“The problem that we see is that the debt crisis risks unsettling consumers, and unconfident consumers don’t buy premium cars,” Eichiner said. “We are already seeing signs of weakness in southern Europe.”

The euro tumbled after the ECB cut its benchmark interest rate yesterday and erased losses after Greek Prime Minister George Papandreou signaled he won’t call a referendum on the rescue plan. Volatility in the currency market may cause banks to cut loans for developers, Vestas Wind Systems A/S CEO Ditlev Engel said Nov. 2. Vestas is the world’s biggest maker of wind turbines.

Forecasts Cut

“We are now investing about 15 percent in Europe of the total of $30 billion overall which is much lower historically,” Shell’s Voser said. “The competitiveness of the European economy is suffering and that has consequences in the medium and long term in terms of investment levels.”

The Organization for Economic Cooperation and Development on Oct. 31 lowered its growth forecast for the euro area, saying it will grow 1.6 percent in 2011, slowing to 0.3 percent in 2012.

As Group of 20 leaders began their talks in Cannes, their focus was on Athens where Papandreou was clinging to power after abandoning a referendum that would have triggered a suspension of European aid. Amid concern Italy may be the next domino to fall as its bond yields jumped to an euro-era record, Prime Minister Silvio Berlusconi was pushed by Germany and France to accelerate an austerity drive.

“We see a certain lack of competitiveness, lack of productivity in European countries,” said Mordashov, Russia’s second-richest man with an estimated fortune of $18.5 billion. “We see a much stronger situation in some other countries and this is what needs to be resolved.”

–With assistance from Maryam Nemazee and Nicholas Comfort in Cannes, France, and Chris Reiter in Berlin. Editors: Kenneth Wong,

To contact the reporters on this story: Tara Patel in Cannes, France via tpatel2@bloomberg.net Matthew Campbell in Cannes, France via mcampbell39@bloomberg.net

To contact the editors responsible for this story: Will Kennedy at wkennedy3@bloomberg.net Jacqueline Simmons at jackiem@bloomberg.net;

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The Irish Times – Monday, October 31, 2011

LORNA SIGGINS, Western Correspondent

THE IRISH Federation of University Teachers has expressed serious concern about a warning of possible prosecution issued to an academic at NUI Maynooth by the Garda Síochána Ombudsman Commission.

The warning relates to alleged “obstruction” of the Garda Ombudsman’s continuing inquiry into taped comments made by gardaí after a Corrib gas protest on March 31st last.

The federation’s general secretary Mike Jennings says that the Garda Ombudsman’s approach “illustrates the lack of protection for both bona fide researchers and journalists” in protecting sources.

It also “runs against any principle of open inquiry and transparency in a democratic society”, Mr Jennings said.

The warning was issued verbally by the Garda Ombudsman to NUIM lecturer Dr Bríd Connolly, following a decision by her to supervise deletion of material from a video camera which was sought by Garda Ombudsman officers investigating the Corrib tape incident. The academics at the centre of the case say the material was unrelated to the inquiry.

The video camera was university property, and had been on loan to postgraduate student Jerrie Ann Sullivan, who was one of two women arrested by gardaí at Glengad on March 31st last.

The video camera was confiscated by gardaí travelling in a separate car to that transporting the two women to Belmullet Garda station. They discovered taped material after the camcorder was returned to them on their release.

An interim Garda Ombudsman report into the incident, published on July 28th by Minister for Justice Alan Shatter, said that the investigations’ transcript from the camcorder upholds the allegations the camera, still switched on, recorded gardaí joking about raping the women if they refused to give their name and address.

It also recorded them talking of “deporting” one of the women who was believed to be an American citizen, “enlisting the support of the Garda National Immigration Bureau to harass them and [making] other comments of an inappropriate nature”, the report said.

The interim report found no evidence of a criminal offence having been committed by any of the five gardaí subsequently interviewed, and no evidence of any breach of discipline by three of the gardaí.

It said that disciplinary issues “may arise in the case of two Garda members”, who were confined to desk duties after the investigation was initiated on April 5th last as a matter of public interest.

NUIM sociology lecturer Dr Laurence Cox, one of four university staff interviewed by the Garda Ombudsman, said that he was concerned about the situation where those who were victims in this case were now being “treated as perpetrators”.

Postgraduate student Ms Sullivan had been questioned for 4½ hours, he noted. Dr Connolly, who could not comment yesterday, was interviewed under caution.

Deletion of unrelated material only came about after two separate offers were made by the university to the Garda Ombudsman to agree on deletion by a neutral third party, Dr Cox said.

Ms Sullivan and her supervisors had a duty to abide by the university’s own research ethics principles and the ethical code of the Sociological Association of Ireland, he pointed out.

The Garda Ombudsman said it would not comment beyond confirming that the investigation was ongoing, and it was moving “as speedily as we can to a conclusion”.

NUI Maynooth referred yesterday to its statement of July 29th last when it acknowledged that deletion of college research material was “inadvisable”, but the “individuals concerned” were “acting out of concern” for student welfare, confidentiality of a research record, and a “genuine belief that the particular material deleted was not relevant to the inquiry”.

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MORE FREE NEWS ABOUT SHELL AND ITS LEADING RIVALS THAN ANY OTHER WEBSITE. FREE LIVE NEWS FOR SHELL, EXXONMOBIL, BP, CHEVRON AND RELATED CONTROVERSIAL SUBJECTS – OIL SANDS, OIL SPILLS & FRACKING. FREE access to historical information, news archive and current news articles (subject to subscription required on some third party websites). This is an entirely non-commercial independent website owned and operated by Alfred and John Donovan. No subscription or any other charges. No advertising. No donations solicited or accepted.  2,545,430 million hits and 1,513,016 million page views in January 2012.

By JON GAMBRELL Associated Press, Updated: Wednesday, November 2, 4:13 PM

LAGOS, Nigeria (AP) — Royal Dutch Shell PLC long has argued that thieves are to blame for most of the oil spills coming from pipelines in Nigeria’s crude-producing southern delta. Now the company is trying to prove that claim in real time on the Internet.

Shell, the dominant oil company in Nigeria since production began there more than 50 years ago, has started posting photographs and reports on a website from every oil spill investigated by the company this year.

“Nobody else operating in the Niger Delta comes close to this level of transparency,” Shell vice president Tony Attah said in a statement. “But regardless of how well we run our operations until sabotage and crude theft spills are stopped or curbed, the vast majority of oil spills will continue to blight large swathes of land and pollute rivers and farm lands.”

While the majority of spills bear the telltale signs of thieves’ hacksaw marks, it remains unlikely though this latest public relations move will help the image a company long demonized by environmentalists in Africa’s most populous nation. Environmentalists here estimate over the last half century, enough oil has been spilled to equal one Exxon Valdez disaster per year.

Shell mentioned the website Wednesday in a statement warning that its Nigerian subsidiary faces an “unprecedented” level of oil thefts targeting its operation at Imo River, a field that spreads across Rivers and Abia states in the Niger Delta. The company shut its operation there in late August after a series of oil thefts caused oil spills, halting production at a field that produces just more than 1 million gallons of oil a day.

The company said a recent helicopter flight over the region saw thieves carting away the stolen crude in waiting river barges and trucks. Though production has stopped, the oil still can be taken from the pipelines there.

Also Wednesday, Shell announced it had lifted a production warning for its Forcados crude shipments after it shut down its Trans Forcados pipeline in early October following a “sabotage leak.”

Shell pipelines and flow stations run across Nigeria’s oil-rich delta region of swamps, mangroves and creeks, which is roughly the same size as South Carolina. Many areas remain remote, allowing thieves to tap into the lines to steal the easily refined crude oil produced here that makes Nigeria a top supplier to the U.S. Some of the oil is shipped out of the country, while others at crude refineries in the swamps cook it into diesel fuel.

Experts and oil companies estimate thieves take hundreds of thousands of barrels a day from fields in Nigeria. A recent United Nations report on environmental damage in one part of the delta suggested there could be “collusion” between oil thieves and government officials to allow the thefts.

While unable to stop the theft, Shell launched its oil spill website to highlight what it says causes spills in the region. Reports on the website from January to Oct. 20 of this year show the company’s pipelines spilled about 500,000 gallons of oil this year — of which just under a fifth came from operational errors or pipeline ruptures caused by Shell.

However, the largest spills — including a Feb. 9 spill and fire that saw 184,000 gallons of oil released — were caused by sabotage or theft, the Shell reports claim.

Each of the reports bear checklists showing them signed off by community leaders and Nigeria government officials, though Shell said it withholds the signatures and names of the officials out of security concerns.

The existence of the website came as a surprise to environmental activists, including Nnimmo Bassey, executive director of the Nigerian group Environmental Rights Action. However, Bassey cautioned that spill figures remained estimates, as Shell so far had refused to offer statistics on how much oil actually gets pumped out of its well sites.

This year’s reports also don’t take into account the damage done in the Niger Delta over 50 years of production, he said. Some environmentalists say as much as 550 million gallons of oil have poured into the delta during that period — at a rate roughly comparable to one Exxon Valdez disaster per year.

“The Niger Delta is a dead environment,” Bassey said. “Telling us now they are not responsible, as of now or yesterday, is not the issue. The issue is the blame and guilt that has been established historically and they need to begin to clean up the mess.”

• Royal Dutch Shell PLC’s Nigeria spill website: http://bit.ly/rqfnxi

Copyright © 2011 The Associated Press. All rights reserved.

SOURCE

Two small earthquakes near Blackpool in northwest England earlier this year were probably caused by hydraulic fracturing, a technique of grinding underground rocks to extract natural gas.

It is “highly probable” that fracking, as the process is known, at the Preese Hall-1 site caused the seismic events, Cuadrilla Resources Ltd., a U.K.-based shale explorer, said in a report published today. The combination of geological factors that led to the events were rare and the strongest possible tremor, of a magnitude of 3, would not be a risk to safety or property on the surface, the report said.

The findings may still add to concern that fracking is harmful to the environment and slow its development in the U.K. While the technology has made the U.S. the world’s largest gas producer, France has halted fracking because of concern it may pollute drinking water. Cuadrilla estimates the reserves found near Blackpool may hold enough gas to supply the U.K. with all its gas for a year and a half.

“We unequivocally accept the findings of this independent report,” said Mark Miller, chief executive officer of Cuadrilla. “We are ready to put in place the early detection system that has been proposed in the report so that we can provide additional confidence and security to the local community.”

Houses Shaken

Cuadrilla earlier this year stopped operations after two tremors that were felt on the surface. One event measured 2.3 on the Richter scale on April 1 and another on May 27 measured 1.5. Homeowners in the seaside resort of Blackpool called the police after feeling their houses shake, the British Broadcasting Corp. reported.

Protesters from Frack Off, a group protesting against shale drilling, entered one of Cuadrilla;s sites today and stopped operations, a company spokesman said.

Pressure from fluids on a stressed fault zone probably caused the events, the report said. It is unlikely that other wells in the basin will encounter similar faults, the report said.

To contact the reporter on this story: Brian Swint in London at bswint@bloomberg.net

To contact the editor responsible for this story: Will Kennedy at wkennedy3@bloomberg.net

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By Associated Press, Updated: Wednesday, November 2, 10:07 AM

NOVEMBER 2, 2011, 4:52 A.M. ET

By DAVID WINNING And DAVID FICKLING

SYDNEY—Australia’s foreign-investment watchdog has pushed back by up to 90 days a decision on the takeover of coal-seam-gas developer Bow Energy Ltd. by a joint venture of Royal Dutch Shell PLC and PetroChina Co.

In a government notice to parliament, the Foreign Investment Review Board said it needed more time to decide whether to approve the 535 million Australian dollar (US$557 million) deal, which would enable Shell and PetroChina’s Arrow Energy venture to expand its proposed gas-export facility in Queensland state.

Such delays are unusual: Around 95% of FIRB decisions are made within a 30-day period set out in law, and so-called interim orders extending the process by 90 days were made just twice during the year ending June 2010, the latest period for which figures are available.

But Arrow said the decision was procedural, to allow the Australian Competition and Consumer Commission to complete its review of the deal, due Nov. 24.

“This allows FIRB to defer its decision until the ACCC has completed its review of any competition implications of the transaction,” Arrow said in an emailed statement.

Companies facing such procedural hurdles typically withdraw their FIRB applications and resubmit them later, but that would restart the 30-day clock—and so risk the timetable on the takeover deal. It calls for approval by shareholders and an Australian court in mid-to-late December, according to an announcement Monday from Bow.

Bow’s board has unanimously recommended investors vote in favor of the A$1.52-a-share (US$1.58) offer, and Shell said in September that it expected the transaction to be implemented in January.

Coal-seam gas—methane trapped far below the Earth’s surface—is one of the world’s hottest energy plays. More than A$20 billion was spent in 2008 on coal-seam-gas deals in Australia alone, by companies including Shell, ConocoPhillips and BG Group PLC of the U.K.

In August, Arrow Energy awarded preliminary engineering and design contracts for an export facility at Curtis Island, near Gladstone, producing an initial eight million metric tons of liquefied natuaral gas a year. Acquiring Bow Energy would allow the venture potentially to expand the annual output capacity of each of the facility’s two processing units, known as trains, to 4.6 million tons of LNG.

Write to David Winning at david.winning@dowjones.com and David Fickling at david.fickling@dowjones.com

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Devjyot Ghoshal

Energy-hungry Asia will remain the major growth driver for Shell, though the region’s appetite may diminish slightly next year owing to global uncertainties, the Dutch oil and gas major’s chief executive officer, Peter Voser, said on Monday.

“I think Asia-Pacific for us is the key growth region. We see a lot of growth, and, hopefully, enough growth, that can actually drive the worldwide economy coming out of Asia-Pacific,” Voser said on the sidelines of the Singapore International Energy Week.

“That’s where huge parts of our investment actually go; into Asia or into upstream projects, for example, (from) where the gas finally will go to Asia,” he said.

Shell’s major projects in the region include the deep-water Gumusut field in Malaysia and the Shell Eastern Petrochemicals project in Singapore, the company’s largest petrochemicals investment globally. The company also has a presence in Brunei, China, Indonesia, the Philippines, Thailand, Vietnam and Australia.

And, while Shell will look to scale up operations within Asia to meet growing demand here, it will also invest elsewhere, including in state-of-the-art equipment, to ensure the supply-side is well bolstered.

“We have recently taken a final investment decision on new technology called ‘Floating LNG’, which will actually allow us to develop smaller gas fields off-shore, have a smaller footprint, and then deliver the LNG to the hungry Asian markets,” Voser said.

Earlier this year, Shell announced it would build the world’s first floating liquefied natural gas facility that can produce gas from offshore fields and liquefy it onboard by cooling, at an estimated cost of $11.5 billion. It is likely to be moored 200 km off the Australian coast on completion.

“That’s a ship which we are building. It is 485 metres long, 70 metres wide and 600,000 tonnes heavy with a lot of technology from Shell in it. We are the first, and only one, to drive this. We look at this as one of the drivers for our growth aspiration in Asia-Pacific,” he said.

At the same time, Shell will continue to grow its LNG business in India, while also expanding its retail operations in the country. “I think India with its economy and population will be key in the growth of energy demand in the future… For Shell, India is a very important country. We are quite clearly focused on bringing gas into India,” he said.

Shell, in partnership with France’s Total, operates the 3.6-million tonnes per annum LNG terminal at Hazira, which consists of a storage and re-gasification terminal along with port facilities. “We are very pleased with the Hazira terminal that we have, which is our main entry into India and that capacity is used a lot,” he said, adding that the company would push for long-term LNG contracts.

The oil and gas major, which acquired a marketing licence in 2004 to set-up 2,000 fuel retail stations, also expects its retail arms to grow.

“As far as I know, we are still the only IOC (international oil company) with a marketing license and, therefore, we are growing our consumer business in India. The pace of that (growth) will depend on how fast we can acquire land, plots, etc. but also on how the overall energy policy of the Indian government will work. I think I have seen very positive signs in that direction,” he said.

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