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The Wall Street Journal: Oil News Roundup: September 20, 2006 9:30 p.m.

THE WALL STREET JOURNAL ONLINE
September 20, 2006 9:30 p.m.

Crude-oil futures fell sharply for the second straight day on the New York Mercantile Exchange, shedding more than $1 a barrel to settle at less than $60.50, their lowest close since late March, after a government report of higher-than-expected crude-distillate inventories. Here is Wednesday’s roundup of oil and energy news.

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MORE DRAMA IN RUSSIA: Russia’s Ministry of Natural Resources said it is reviewing Total SA’s Kharyaga production-sharing agreement license for possible cancellation, the latest in a series of setbacks for foreign oil companies in Russia. The move comes amid an apparent effort by the Kremlin to reconfigure three pioneering, foreign-owned projects which were negotiated when oil prices were lower and international oil majors were less eager to pile into Russia’s oil sector. The threat to Total’s license could bode ill for Royal Dutch Shell PLC and Exxon Mobil Corp., which have much larger projects on Russia’s Sakhalin Island.

•Shell Warns of Shipment Delays: Shell warned that any substantial delay caused by Russia canceling construction approval for its Sakhalin Island oil and natural-gas project would result in delays of liquefied natural-gas shipments to Japan and Korea scheduled to begin as early as 2008.

•Exxon Halts Sakhalin Loading: Exxon Mobil, meanwhile, stopped filling an oil pipeline at its Sakhalin project to make technical checks, Reuters reported, though the shutdown may not delay scheduled exports.

•Exxon May End Support of Controversial Groups: Exxon Mobil, which has sparked intense political criticism for its funding of groups that challenge the scientific validity of concerns about global warming, is reviewing whether it will continue to fund some of those groups.

•Amaranth Sells Energy Portfolio: Amaranth Advisors, the hedge fund facing billions of losses in bad natural-gas bets, has sold its entire energy portfolio to Citadel Investments and J.P. Morgan Chase & Co. after a lengthy process of trying to offload the investments that began before news of its woes broke on Monday, people familiar with the matter said.

•BP to Invest in Indiana: BP PLC plans to invest $3 billion in its Whiting, Ind., oil refinery so it can process heavy Canadian crude oil, increasing its production of motor fuels by about 15%.

•Fire at Saudi Refinery: A fire erupted at an oil refinery in eastern Saudi Arabia, killing one employee before it was extinguished, said Saudi Aramco, the company that owns the complex.

•Peoples Selling Plants: Natural-gas distributor Peoples Energy Corp. agreed to sell its 50% equity stake in its Elwood Energy electric power plant and 100% interest in COB Energy Facility for $110 million to J-Power USA Development Co.

•Ethanex to Build German Ethanol Plants: Kansas’ Ethanex Energy Inc. said it has signed a deal to help build bio-ethanol facilities in Germany.

•Iraq, Kurdistan in Talks: The Kurdistan Regional Government in the north of Iraq is to sign oil contracts with companies next month, and is in talks with oil majors, its oil minister said.

•Drawn to Fort McMurray: Oil-sands jobs are attracting workers from all over the world to the remote city of Fort McMurray in northeastern Alberta, Canada, NPR reports.

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