September, 2006:

By: Martyn Wingrove, Lloyds List
Published: Sep 28, 2006

SAKHALIN Energy has sold 98% of its liquefied natural gas forward cargoes for Russia’s first LNG project and will consider building a third train.

The Shell-led consortium has to formally approve one more LNG contract and then will have almost all of its gas production booked with international buyers.

But the Sakhalin II project in eastern Russia is still under threat from the state, despite assurances from foreign minister Sergei Lavrov that the production sharing contracts will not be scrapped. read more

Published: Sep 28, 2006

ROYAL Dutch Shell has joined Italian oil firm Eni to build an oil pipeline across Turkey to take Black Sea oil to the Mediterranean, writes Martyn Wingrove.

The Anglo-Dutch oil major is looking to pump its future Kazakhstan oil production from the Black Sea port of Samsun to the tanker terminal at Ceyhan along the $1.5bn line.

‘We have signed an agreement with Eni and Calik Enerji to investigate the possibility of participating in the development of a pipeline between Samsun and Ceyhan,’ said a Shell spokeswoman. read more

By: Opponents claim proposed floating LNG terminal has security and safety shortcomings, writes Rajesh Joshi in New York, Lloyds List
Published: Sep 28, 2006

A US Coast Guard assessment of the proposed Broadwater liquefied natural gas terminal in New York’s Long Island Sound has set off a renewed round of opposition to the controversial project.

Opponents hitching their wagons to the anti-Broadwater cause include several regional Democratic candidates for Congressional elections in November, as well as Connecticut state attorney general Richard Blumenthal. read more

Thursday, Sept. 28, 2006
 
YUZHNO-SAKHALINSK, Russia (Kyodo) Ambassador to Russia Yasuo Saito on Wednesday criticized the order by the Russian Ministry of Natural Resources to suspend part of the Sakhalin-2 oil and natural gas development project as “lacking transparency.”

But Valery Garipov, chairman of the Subcommittee for Development of Oil Industry at the Chamber of Commerce and Industry of the Russian Federation, spoke on behalf of Russian interests, saying Russia’s state-owned Gazprom should be allowed to take part in the project, which is currently being conducted by non-Russian firms. read more

THE WALL STREET JOURNAL ONLINE
September 27, 2006 5:56 p.m.

After falling in early trading, crude-oil futures soared nearly $2 a barrel to settle at about $63 on the New York Mercantile Exchange, in what may have been a technical bounce. Here is Wednesday’s roundup of oil and energy news.

* * *
7-ELEVEN DROPS CITGO: 7-Eleven is dropping Venezuela-backed Citgo as its gasoline supplier after more than 20 years, as part of a previously announced plan by the convenience store operator to launch its own brand of fuel. And 7-Eleven is worried that anti-American comments made by Venezuelan President Hugo Chavez might prompt motorists to fill-up elsewhere. Mr. Chavez has called President Bush the devil and an alcoholic. The U.S. government has warned that Mr. Chavez is a destabilizing force in Latin America. read more

A WALL STREET JOURNAL NEWS ROUNDUP
September 28, 2006

Russia’s foreign minister said the Kremlin didn’t want to scrap the contract for a $20 billion Royal Dutch Shell PLC oil-and-gas venture and wasn’t seeking to push foreigners out of its energy sector.

But as Sergei Lavrov sought to soothe fears over the energy projects, Russia’s environmental watchdog issued another harsh statement, saying Shell’s project might have caused ecological damage of $50 billion. Sakhalin Energy — the consortium led by Shell — has suggested environmental groups are exaggerating the extent of the damage, and insists it is keeping to ecological-safety standards. read more

September 28, 2006
From Tony Halpin in Moscow
 
RUSSIA’S dispute with Shell over the future of the Sakhalin-2 project took an ominous twist last night when President Putin demanded government action against companies that break licensing agreements.

Mr Putin, in a televised meeting with Yuri Trutnev, the Natural Resources Minister, said: “I am counting on the Ministry and the Government as a whole making these decisions, including with regard to those companies that work in bad faith and don’t fulfil licensing agreements.” 
 
The President’s statement appeared to undermine an earlier attempt by Sergei Lavrov, the Foreign Minister, to soothe Western concerns about investigations into the operations of foreign oil companies in Russia. read more

September 28, 2006
Profile

Lisa Lilley tells Sarah Campbell what it’s like being a member of Shell’s support crew to the Ferrari Formula One team 
 
“SINCE the end of January I haven’t eaten any chocolate,” Lisa Lilley says proudly. This is not something that seems immediately relevant to her role as technology manager in Shell’s Formula One team, but it is indicative of the way she works. “The guys” — her team-mates — challenged her to give up one of her two true passions (the other is shopping), and she rose to it. read more

· Foundation chief spoke up for firm at Benn meeting
· Green group says body is ‘a charade and a con’

Rob Evans and Terry Macalister
Thursday September 28, 2006

An attempt by Shell to portray itself as a model of corporate social responsibility was undermined last night after Whitehall documents showed its charitable arm discussing a key commercial project with a British government minister.

The multinational oil company says the charity it funds – the Shell Foundation – is completely independent and contributes nothing towards its profits. But documents released to the Guardian under the Freedom of Information Act show the director of the charity, Kurt Hoffman, and the chairman of Shell UK, James Smith, lobbied the secretary of state for international development, Hilary Benn, in January at a meeting they had asked for. read more

Sep 27th, 2006 with stocks: RDS.A

Hilary Kramer (AOL.com) submits: In 2004, Royal Dutch Shell PLC (RDS.A) suffered some bad news when it had to revise its reserves downwards to a significant degree. Since then the company has been reorganizing to streamline decisions and improve accountability, and it has been working hard to improve its reserves situation.

In a different industry such bad news might have had more of an effect, but size really matters in the oil and gas business, and as the third largest oil company in the world, RDS benefited from its enormous size. read more

Thursday, September 28, 2006. Issue 3507. Page 1.

By Miriam Elder
Staff Writer

YUZHNO-SAKHALINSK — Foreign oil majors and state officials squared off on Sakhalin Island on Wednesday, with Shell and ExxonMobil insisting that work on the island’s prized oil and gas fields was continuing as usual despite increasing state pressure on the multibillion-dollar projects.

President Vladimir Putin also weighed in on the debate, warning in televised remarks that the government would take appropriate measures against any oil firm breaching its license. read more

Agence France-Presse, The Associated Press
Published: September 27, 2006

SOCHI, Russia President Vladimir Putin of Russia warned Wednesday that the authorities would take action against “unconscientious” oil and gas companies that failed to fulfill their license obligations.
 
Putin made his remarks at a meeting with Yury Trutnev, the natural resources minister, amid tensions between the state and Western energy investors, particularly over the Sakhalin-2 oil and gas project in the Russian Far East.
 
“I expect the ministry and the government as a whole to make such decisions, including as regards companies that work unconscientiously or do not fulfill license agreements,” Putin said.
 
Meanwhile, the Russian foreign minister said Wednesday that the environmental checks being conducted at the project would not necessarily lead to the revoking of the project’s license.
 
The minister, Sergey Lavrov, speaking at the first day of an international oil and gas forum on the island, intended his comments to reassure Western governments that have been rattled by a decision to pull a key environmental permit at the project, where liquefied natural gas supplies have already been contracted 20 years ahead.
 
“The checks that are being carried out by no means signify that the licenses for exploration as part of the Sakhalin-2 project will be revoked,” Lavrov said in remarks televised from the oil and gas forum on Sakhalin, an island in Eastern Russia. “The aim of the checks is solely to ensure that all sides abide by the terms of the agreement in good faith.”
 
Last week, the Natural Resources Ministry announced it would revoke the environmental permit at Sakhalin- 2, provoking an international outcry over fears that work could be halted at the $20 billion development.
 
On Tuesday, Trutnev said that the ministry would conduct a monthlong review of the project. If Sakhalin Energy, the consortium led by Shell that includes the Japanese firms Mitsui and Mitsubish, fails to present satisfactory proposals to overcome numerous environmental violations, work would be frozen, Trutnev said.
 
Observers interpreted the move as a means to pressure the company to secure better terms for the state gas monopoly Gazprom, which is seeking to join the project.
 
But Lavrov strongly denied those suggestions.
 
“Statements about some sort of a revision of production-sharing agreements and especially about a squeezing out of foreigners from the Russian fuel and energy sector are groundless,” he said.
 
Ian Craig, the Sakhalin Energy chief executive, expressed confidence Wednesday that the project would not be interrupted. The permit, he said, was “highly unlikely to be revoked.”
 
Sakhalin-2 is one of a handful of so- called production-sharing agreements that were struck in the early 1990s when Russia was desperate for foreign investment to help develop its reserves. The deals offered Western oil companies control in the projects as well as lucrative tax breaks.
 
But now that Russian finances have been transformed thanks to high energy prices and state control in the oil sector is rising, the government appears to be reconsidering the projects. read more

Chris Noon, 09.27.06, 4:20 PM ET

Russia on Wednesday threw a new roadblock in the way of the foreign companies trying to develop the Sakhalin-2 energy site in the eastern part of the country, charging Royal Dutch/Shell, Mitsui and Mitsubishi with violating worker safety rules.

A week ago, a suddenly ecologically minded Kremlin revoked environmental authorization for the $20 billion project.

“There have been quite a lot of violations of industrial safety rules … this worries our inspectors,” said Konstantin Pulikvosky, head of the environmental, engineering and nuclear monitoring agency Rostekhnadzor. The decision has, unsurprisingly, caused international protest. Yasuo Saito, Japan’s ambassador to Moscow, called the Russian government action “one-sided”, and lacking in “procedural transparency”. read more

27 September 2006

From 10 October eight PhD candidates will start working in the joint Shell TU Delft research programme Sustainable Mobility. The research subjects vary from sustainable hydrogen production to traffic regulations models for reducing fine particle emissions. The programme is a four-year joint project, in which Shell will invest 3 million euro and TU Delft 1.5 million euro. Both organisations share the vision that universities and companies working together are the driving forces behind innovation. read more

Vladimir Putin (file photo)

By VOA News
27 September 2006

Russian President Vladimir Putin is warning that Russian authorities will take action against foreign oil companies that fail to meet environmental regulations and other licensing agreements.

Mr. Putin spoke Wednesday in Sochi, at a regional conference of energy ministers from Black Sea countries.

Last week, Moscow revoked environmental approval for the huge Sakhalin-2 project, run by Royal Dutch Shell on Russia’s Pacific coast.  However, Russia’s Natural Resources Ministry later gave Royal Shell and other investors another month to fix any environmental problems at Sakhalin before any action is taken. read more

27.09.2006, 13.43 
 
YUZHNO-SAKHALINSK, September 27 (Itar-Tass) – The Sakhalin Energy Company (operator of the Sakhalin-2 project) has chartered on Wednesday two giant tankers of the Primorye Shipping Company to ship the petroleum obtained on the Sakhalin shelf. A corresponding agreement was signed at the international “Sakhalin Oil and Gas–2006” conference, which is currently under way here.

The “Ostrov Sakhalin” and “Gubernator Farkhutdinov” tankers with a deadweight of 100,000 tons each will be used to ship petroleum from the Prigorodnoye settlement area on the southern part of Sakhalin. read more