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The Wall Street Journal: Oil News Roundup

THE WALL STREET JOURNAL ONLINE
July 17, 2006 8:46 p.m.

Crude-oil futures fell sharply from record highs, dropping $1.73 a barrel to settle at $76.40 on the New York Mercantile Exchange. Traders reacted to hopes of an end to the flare-up of violence in the Middle East, along with a German television report that Iran had accepted incentives promoted by Western nations to resolve the dispute over its nuclear program. But that report had not been confirmed by the close of trading, and the fighting in Lebanon continued apace. Here’s Monday’s roundup of oil and energy news.

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ROSNEFT RETREATS: Rosneft shares fell 1.7% in their first day of trading in Moscow. Though the performance seemed to offer ammunition to critics who said Rosneft’s IPO was priced too high, most stocks in Moscow were falling, hurt by worries about geopolitical risks to the economy. The sharp decline in oil prices likely didn’t help Russia’s state-owned oil company, either. Still, questions remained about the company’s true value, given the assist its IPO got from big oil companies and Russian oligarchs.

ROSNEFT RETREATS II: Rosneft shares fell 2.5% in their first day of conditional trading in London. Another Russian oil firm, Yukos, asked a court to block the IPO in London, saying much of Rosneft’s assets were taken from Yukos illegally and given to Rosneft. If Yukos’s motion for an injunction prevails, then any trades made in London during the conditional period will be nullified, the London Stock Exchange has said. Unconditional trading in Rosneft shares is scheduled to begin tomorrow.

•Russia, Kazakhstan in Gas Deal: The presidents of Russia and Kazakhstan agreed to create a joint venture to process natural gas from Kazakhstan’s Karachaganak gas field.

•PetroChina Surges: PetroChina, China’s largest integrated oil firm by capacity, said its first-half output of crude oil and gas rose 6.8% from a year earlier on strong Chinese energy demand.

•Santos to Buy Delhi: Australian oil and gas producer Santos Ltd. said it reached a deal with Westpac Banking Corp. to buy Delhi Petroleum Pty. Ltd., a former unit of Exxon Mobil, for about $357 million.

•Savannah Spill: An oil spill shut down a 12-mile stretch of the Savannah River and part of the Intracoastal Waterway, with oil visible from near the city of Savannah to the beaches of Tybee Island.

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