July, 2006:

THE WALL STREET JOURNAL ONLINE

Crude-oil futures tumbled by more than $1 a barrel, settling at $73.20 on the New York Mercantile Exchange, on renewed hopes of a resolution of the violence in the Middle East. Here is Friday’s roundup of energy-related news:

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CHEVRON’S MISS: Chevron did its part to dissipate some of the public rage being directed at Big Oil these days, reporting — get this — disappointing quarterly earnings. Not that a $4.35 billion profit, on $53.54 billion in revenue, is anything to sneeze at. But Wall Street analysts, on average, expected a little more from Chevron’s earnings per share, and its stock fell 2.5%. A big expense to repair equipment damaged by last year’s hurricanes hurt results. read more

By Andy Critchlow & Stephen Voss

DUBAI: Royal Dutch Shell, Europe’s second-biggest oil company, yesterday said the Pearl GTL project may cost as much as $18bn, triple earlier estimates.

The project will cost $4 to $6 per barrel of oil equivalent to produce, The Hague-based Shell said yesterday in a statement. The venture is expected to produce the equivalent of 3bn barrels of oil during its lifetime, the company said in a separate statement.

Oil and gas project costs are climbing amid shortages of equipment, labour and raw materials such as steel. A year ago, Shell said costs for its Sakhalin II venture in Russia’s Far East doubled to $20bn. Shell yesterday cut its 2006 output target. read more

Jul. 29, 2006. 01:00 AM

CALGARY—Shell Canada Ltd. aims to proceed with expanding its oil sands mining operation despite surging costs, and has given its partners 90 days to respond to its proposal, it said yesterday.

Shell Canada, which owns 60 per cent of the Athabasca Oil Sands Project, said it believes boosting the production to 255,000 barrels a day from the current 155,000 could cost between $10 billion and $12.8 billion.

That is up from last year’s $7 billion estimate, with the huge increase driven by a squeeze on labour and materials supplies in Alberta’s heavy construction boom. read more

• British Nuclear Fuels, the UK government’s nuclear services company, stopped production at Unit 4 of its Wylfa nuclear plant.

• Interconnector (UK), owner of a natural gas pipeline linking England and Belgium, will export the fuel from mainland Europe into the UK starting tomorrow to meet demand.

• Royal Dutch Shell, Europe’s second largest oil company, may reroute a proposed gas pipeline in western Ireland to end an impasse over a facility that could meet almost two-thirds of the country’s gas needs. read more

Shell said the provision was in connection with the putative shareholder class actions filed in the United States District Court for the District of New Jersey.

A Shell spokeswoman said the class actions were two separate action filed in the U.S. on behalf of foreign and U.S. shareholders.

In January, Stichting Pensioenfonds ABP and 25 other Dutch public pension funds filed a complaint seeking hundreds of millions of dollars in the U.S. from Shell following the reserves restatments.

A separate consolidated class action had already been filed in 2004, led by Pennsylvania State retirement funds. read more

July 28 (Bloomberg) — Shell Canada Ltd., the country’s fourth-largest oil company, said costs to expand an oil-sands venture will rise 75 percent to as much as C$12.8 billion ($11.3 billion) on higher equipment and labor costs.

A boom in oil-sands projects in Alberta has raised all facets of expanding the Athabasca Oil Sands Project, in which the company owns 60 percent, Shell Canada said today in a statement. The revised estimate includes additional spending to boost efficiency and lower operating costs, Chief Executive Officer Clive Mather said today during a conference call. read more

ROYAL Dutch Shell has set aside £269 million in an attempt to settle a massive lawsuit in America.

The class action relates to the reserves scandal that rocked the company two years ago.
A settlement would finally draw a line under the debacle, when the company admitted 3.9 billion barrels of oil had been overbooked.

It would leave all the major legal actions resolved in the United States and only one – a separate European lawsuit – still outstanding.

Profits

Chief executive Jeroen van der Veer said Shell still doesn’t admit liability for overbooking the reserves, and legal talks will have to continue. read more

Rising prices help oil giants pump out massive profits Royal Dutch Shell earnings soar to £3.4bn.

Exxon makes history as revenues exceed $1bn a day

By Gary Parkinson, City Editor
Published: 28 July 2006

Two of the world’s biggest oil companies posted massive profits yesterday on the back of soaring oil prices, making $16bn (£8.6bn) between them in just three months.

At $6.3bn (£3.4bn), Royal Dutch Shell’s underlying profits for the three months to the end of June were 36 per cent higher than over the same period last year, despite serious disruption to production in Nigeria. read more

Fri Jul 28, 2006 2:32 PM GMT
 
ABUJA (Reuters) – The Nigerian arm of Royal Dutch Shell has started work on repairing a pipeline where a leak has forced the shutdown of 210,000 barrels per day (bpd) in oil output, a spokesman said on Friday.

Shell is losing 180,000 bpd because of the leak discovered a week ago in a section of its Nembe Creek trunk line in Rivers state in the Niger Delta, while Chevron is losing 30,000 bpd that should be going through the same pipeline.

“We are going ahead with repairs at this time,” a Shell spokesman said, adding that the firm could not tell how long the repairs might take. read more

A laugh for the weekend…

For adults only

Malcolm Brinded spoof

KEITH FINDLAY

27 July 2006
 
A Union leader yesterday called for a thorough inquiry into the role of the Health and Safety Executive (HSE) on North Sea oil and gas platforms.

Graham Tran, regional officer for Amicus, claimed the HSE had neither the resources nor the independence it needed to improve and police safety offshore.

He was speaking as representatives from the TGWU, RMT and OILC unions met a top HSE official to raise their general concerns about safety following the conclusion last week of a fatal accident inquiry into the deaths of two men on Shell’s Brent Bravo platform almost three years ago. read more

Trade unions have held a meeting with health and safety officials in Aberdeen to discuss concerns about the offshore industry.

The talks followed a report into the deaths of two workers on Shell’s Brent Bravo platform in which a sheriff criticised the company.

The Oil Industry Liaison Committee, Transport and General Workers Union and the National Union of Rail, Maritime and Transport Workers raised a number of issues at the meeting with the Health and Safety Executive.

They called for more independent offshore inspections, a stricter enforcement of improvement orders on install- ations and greater consultation with workers. read more

MENAFN – 28/07/2006  
  
(MENAFN) Qatar Petroleum and Royal Dutch Shell announced they would proceed with the Pearl gas-to-liquids (GTL) project, an integrated development, transport and processing hub for Qatar North Field gas resources, Gulf News reported.

Just months ago the status of the project was cast in doubt amid rising costs worldwide for oil and gas projects, due to shortages of equipment, labour and raw materials such as steel.

The Pearl GTL project may cost as much as $18 billion, triple earlier estimates, based on company-supplied figures. read more

28/07/2006 – 08:34:04 

The man appointed by the Government to mediate between Shell and the Rossport Five has recommended that the Corrib gas pipeline be re-routed.

Former trade union leader Peter Cassells was appointed in an effort to find a solution to the long-running dispute, which saw the five Co Mayo men spend more than 90 days in prison last year for refusing to obey an injunction ordering them not to obstruct work on the pipeline.

Earlier this month, he said his talks had failed to find any common ground between the two sides. read more

28 July 2006

Doing well: The oil giant’s rising fortunes have been prompted by the soaring price of crude

By Brian O’Connor
 
ROYAL Dutch Shell put a £270m price on settling a US legal action over the reserves scandal two years ago.

This is just an accounting provision, but signals its readiness to sort out the last remaining big lawsuit.

The provision is just a week’s profits for the oil giant, which made a record £3.4bn in the quarter to June, up 36pc, though its oil and gas production tumbled 13pc. read more

Jim Armitage,
28 July 2005

SHELL’S profits surged by more than a third in the first half of the year, thanks to record oil prices.

With crude currently hovering around $60 a barrel, the company enjoyed profits of $10.2bn (£5.8bn) – up 39% on the same period last year. Shell is not alone in enjoying a big boost to earnings on the back of rampant oil prices. BP said earlier this week it made £6bn in its half-year.

Shell is attempting to win back investor confidence following the scandal last year when it was found to have been grossly exaggerating the amount of oil it had in reserves, waiting to be pumped out of the ground. Today it stressed it would be spending $1.8bn a year for the next two years in its hunt for new reserves. read more