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The Wall Street Journal: Oil News Roundup: August 4, 2006 8:50 p.m.

THE WALL STREET JOURNAL ONLINE
August 4, 2006 8:50 p.m.

Oil futures tumbled as Tropical Storm Chris was downgraded to a tropical depression, further calming worries that it could disrupt oil production in the Gulf of Mexico. Here’s Friday’s roundup of energy-related news:

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SPREADING SPILL: Lebanon’s environment minister warned that the oil spill caused when Israeli planes bombed a Lebanese power station nearly three weeks ago — called by some Lebanon’s worst environmental disaster ever — could pollute several Mediterranean shores, including those of Cyprus and Turkey. The oil has already affected about 10 kilometers of Syrian shoreline, according to the United Nations, and about two-thirds of Lebanon’s coast, according to Lebanon’s environment minister.

PROFIT PAIN: Though Big Oil has lately posted booming profits, not all energy companies have benefited. Occidental Petroleum posted a 44% drop in second-quarter earnings as a charge relating to its Ecuador operations in the latest quarter and a big gain from an asset sale a year ago made for a difficult comparison, MarketWatch reports. Occidental shares fell 2%. And Peoples Energy actually lost money in the quarter, saying its gas-distribution business was hurt by “warmer weather and conservation,” along with high costs and other woes. It also cut its full-year outlook, and its shares tumbled 2.5%.

•Split Decision: Jurors convicted two former energy traders — one formerly of Dynegy, the other formerly of El Paso — of a handful of wire-fraud charges, but either acquitted them or couldn’t reach a verdict on all conspiracy and false-reporting counts. The verdict baffled prosecutors and defendants.

•More Trouble in Nigeria: Militants kidnapped three Filipino oil workers in Nigeria’s oil-rich Niger Delta region, the BBC reports, a day after taking a German worker hostage. Kidnappings and other attacks by militants in the region have cut Nigeria’s oil production by 20% this year.

•Uneasy in Alberta: Alberta, the epicenter of Canada’s oil industry, is booming, but residents are wary, still smarting from the last bust, the London Free Press reports.

•Korean Fund in Demand: South Korean asset-management firms are bidding for the right to manage the country’s first government-led oil-exploration fund, worth about $207 million, the Korea Times reports.

•Singh Denies Report: Former Indian foreign minister Natwar Singh denied a leaked government report that accused him and his son of using government positions to take improper advantage of the United Nations oil-for-food program in Iraq, the Middle East Times reports.

•The New Black Gold: Coal is the new oil, Kiplinger’s declares, and the U.S. is to coal what Saudia Arabia is to oil. Kiplinger’s also points out that some U.S. coal-producing companies, such as Peabody Energy, have outperformed Big Oil stocks in the past three years.

•Turning the Tide: The New York Times checks up on the burgeoning field of tidal energy. In its infancy and still far from viable, the technology is attracting a lot of interest and cash.

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