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The Wall Street Journal: Oil News Roundup: August 9, 2006 5:56 p.m.

EXTRACT: •BP Now No. 2: Adding insult to BP’s injury, Royal Dutch Shell has surpassed BP as Europe’s largest listed oil company.

THE WALL STREET JOURNAL ONLINE
August 9, 2006 5:56 p.m.

Oil futures rose sharply, topping $77 a barrel, on the New York Mercantile Exchange in reaction to a report of a bigger-than-expected draw in U.S. crude and gasoline inventories last week. But futures gave up their gains in late trading. Here’s Wednesday’s roundup of energy-related news:

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PRUDHOE SHUTDOWN ROILS ALASKA: Alaska Gov. Frank Murkowski instituted a state hiring freeze, citing the millions of dollars the state is losing in tax revenue and royalties due to BP’s Prudhoe Bay oil-field shutdown. Mr. Murkowski also said he would ask the attorney general to investigate the “state’s right to hold BP fully accountable for losses to the state.”

•Report: BP Was Warned: Employees warned BP of corrosion in its Prudhoe Bay pipes two years ago, the Financial Times reports.

•Pipe Problems: BP’s problem of corroding pipes is worsening as the nation’s largest oil field ages and more water and less oil is produced during drilling.

•Boon for Environmentalists: Prudhoe corrosion problems could also weaken support for opening up the Arctic National Wildlife Refuge to exploration.

•BP’s Tanker Spree: Meanwhile, BP is scrambling to bring oil from around the world to replace Prudhoe’s missing supply, reuters reports.

•U.K. Oil Companies Going Green: British oil companies are gearing up to spend hundreds of millions of pounds on biofuel production, the U.K. Herald reports.

•More Nigerian Kidnappings: Militants kidnapped four foreign oil workers off the coast of Nigeria. Kidnappings and other attacks by militants in the region have cut Nigeria’s oil production by 20% this year.

•New Crude in Nigeria: In better Nigerian news, the country’s Minister of Petroleum Resources and the Group Managing Director of the Nigerian National Petroleum Corporation suggested Nigeria may finally find crude oil for the first time in the Chad Basin, a region long ago developed by the country’s neighbors.

•Update on China’s Reserves: China’s government said one of its four new strategic oil-reserve facilities is likely to be ready in October.

•Conoco/Anadarko Project: ConocoPhillips and Anadarko Petroleum announced they had started up a new oilfield on Alaska’s North Slope.

•BP Now No. 2: Adding insult to BP’s injury, Royal Dutch Shell has surpassed BP as Europe’s largest listed oil company.

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