November, 2006:

EXTRACT: In mid-November, government environmental inspectors vowed to revoke the licenses of oil giant Royal Dutch Shell Plc to continue work on a Far East oil exploration venture called Sakhalin 2, in which Shell has a 55 percent stake. Iskyan says the government’s motive is to win a controlling stake in the project for itself.

Browder doesn’t think any amount of scandal will deter investors so long as Russia’s oil billions keep flowing. “People will ignore my visa, people will ignore Kozlov’s assassination, people will ignore Shell’s problems as long as the money supply is going up, as long as asset prices are going up,” Browder says. read more

(Leon Aron, resident scholar at AEI.)
  
EXTRACT: Putin’s statist ideology has also been felt by the main foreign investors in Russia’s oil sector. This past fall, the Kremlin halted or threatened to halt operations by Royal Dutch Shell, ExxonMobil, France’s Total, and the Russian-British TNK-BP. Notwithstanding official explanations for this move–from environmental violations to cost overruns to disappointing output–it is an open secret in Moscow that the government’s prime motive is to pressure the companies into either surrendering a share of production to the state or handing back their development licenses.
 
By Leon Aron
Publication Date: November 29, 2006
Leon Aron is a resident scholar at AEI.
 
“Is Russia Going Backward?” That was the question posed by the title of an article that I completed in late August 2004 and published in the October 2004 Commentary. My qualified answer was no. Having supported Russia’s democratic, free-market revolution at every critical juncture during more than a decade of upheaval–from the election of Boris Yeltsin as president of what was still Soviet Russia in June 1991 and the rejection of the hard-line coup two months later, to the referendum in March 1993, Yeltsin’s re-election in 1996, and the toppling of the Communist-led plurality in the Duma in 1999–the Russian people, I argued, were not turning their backs on the reforms they had stoically sustained. They were simply ready at last for the new Russian state to be strong enough to help them. read more

Thu, Nov. 30, 2006

FLORIDA BUSINESS BRIEFS
From Miami Herald Staff and Wire Services

The European Commission fined five oil refiners and chemical producers about $682 million, saying they fixed the price of synthetic rubber used to make tires. A sixth company that had alerted authorities escaped a fine.

It was the second-largest fine ever in an EU cartel case. Italy’s Eni was ordered to pay the largest fine — $357.6 million — while Royal Dutch Shell was fined $211 million. Their fines were hiked by half for it being a repeat offense. read more

Last Word

Published: Nov 30, 2006

SAKHALIN Energy has tightened its own security, apparently in a bid to prevent Russian secret services from infiltrating the organisation that is developing oil and gas fields off the nation’s east coast.

The Shell-led consortium has added new computer technology by installing spyware to protect laptops and office computers from the Big Brother state services.

Sources told Last Word that Sakhalin Energy employees fear they are being followed. Considering the government’s environmental agency is stepping up its investigation into the Sakhalin II project, many believe their concerns are not too far from the truth. read more

By: Conor Lally, Irish Times
Published: Nov 30, 2006

The senior Garda officer in charge of policing the protest at Shell’s Corrib gas pipeline has said some protesters had established checkpoints on roadways in parts of Mayo at which they “interrogated” local people for up to 45 minutes before refusing passage to some.

Supt Joe Gannon also said gardaI have been assaulted by protesters and filmed on cameras while they have been out socialising with friends and family.

A “co-ordinated campaign of intimidation” had in many cases been directed at people with no involvement in the Shell project. read more

Published: November 30 2006 02:00 | Last updated: November 30 2006 02:00

Nov 27 2006ASM International: Break-up vote by rebel shareholders is defeated.

Nov 14 2006 Stork refuses to implement shareholder-backed break-up of company.

Nov 6 2006 Ahold unveils own growth strategy, having spurned rebel investors’ break-up plan.

Sept 29 2006 Philips spins off semi-conductor unit after investor pressure.

Aug 23 2006 TNT sells logistics business after investor pressure. Nov 17 2005 VNU’s takeover of IMS Health foiled by investors, CEO goes. read more

EXTRACT: …Royal Dutch Shell, the Anglo-Dutch energy group, acknowledged that investor unrest was key to its decision to unwind its cumbersome century-old dual-headed governance structure.

THE ARTICLE

By Ian Bickerton in Amsterdam: Published: November 30 2006 02:00 | Last updated: November 30 2006 02:00

Activist investors have chalked up more than their share of triumphs in forcing change at Dutch companies in recent times. But now there are clues that the clog may be on the other foot.

The defeat this week of a shareholder motion to break up ASM International, a semiconductor group, came as management at both Stork, the industrial conglomerate, and Ahold, the food retailer, continued to dig their heels in to resist similar investor demands. read more

By Tobias Buck in Brussels: Published: November 30 2006 02:00 | Last updated: November 30 2006 02:00

Chemical and energy groups including Shell, Dow, Eni and Bayer were yesterday punished for operating a price-fixing cartel in the market for synthetic rubber, a ruling that triggered the second highest fine yet imposed by the European Commission.

The six members of the cartel were fined a total of €519.1m ($682.4m), a sum bettered only by the €790.5m fine imposed on a vitamins cartel more than five years ago. Yesterday’s decision means 2006 will be a record year for cartel fines imposed by the Brussels regulator, taking the total to €1.84bn. read more

By Rebecca Bream in London and Arkady Ostrovsky in Moscow: Published: November 30 2006 02:00 | Last updated: November 30 2006 02:00

Shares in Peter Hambro Mining, the London-listed, Russia-based gold producer, fell 14 per cent yesterday after a Russian government environmental watchdog threatened to revoke some of its mining licences.

Oleg Mitvol, deputy head of Rosprirodnadzor, the Russian natural resources ministry’s environmental watchdog, said he would check PHM’s gold production against its declared resources, as part of a crackdown on companies that do not develop projects fast enough. read more

By James Politi in New York Published: November 30 2006 02:00 | Last updated: November 30 2006 02:00

Western Oil Sands, the Canadian energy company, may be looking for a downstream partner to help it better exploit its main asset, a 20 per cent stake in the $5bn Athabasca oil-sands venture.

Western said it had hired engineering advisers and bankers at TD Securities and Goldman Sachs to help weigh “various initiatives and options, including downstream integration of Western’s oil sands resources”. read more

11.30.2006, 02:35 AM

AMSTERDAM (AFX) – Royal Dutch Shell is planning ‘considerable’ investments in the Bolivian gas sector, Dutch daily Het Financieele Dagblad reported, citing Bolivian energy minister Carlos Villegas Quiroga.

The oil major also intends to sell part of its 25 pct stake in Bolivian gas transport company Transredes back to the Bolivian state, the paper said, noting Shell officials will next week start negotiations with the Bolivian government on that issue.

It added that on Monday, Shell chief executive Jeroen van der Veer met Bolivian president Evo Morales, who was on a state visit to the Netherlands. read more

By Andrew Osborn in Moscow
Published: 30 November 2006

Shares in the AIM-listed Peter Hambro Mining plunged 14 per cent yesterday after a senior Russian government official questioned the legality and efficiency of the company’s activities in its sole area of operations.

Oleg Mitvol, the deputy head of Russia’s state environmental watchdog, said he had asked the government to strip Peter Hambro of two important exploration licences in north-eastern Russia.

He accused it of a litany of corporate and environmental failings, alleging that it was failing to exploit the opportunities it had been given. Shares of Peter Hambro fell 165p to 1,025p on his comments, prompting the company to rush out a statement dismissing what it called “media speculation”. Mr Mitvol’s criticism appeared to have taken the company and investors by surprise and comes at a time when British companies are facing more and more regulatory problems in Russia. read more

November 30, 2006
 
More than £130 million was wiped off the value of Peter Hambro Mining after an official at Russia’s environment watchdog indicated that it may revoke five of the goldminer’s licences.
 
Oleg Mitvol, deputy head of the agency, said that Hambro had either violated environmental rules or done nothing to develop sites. “This is one of those companies that simply take licences to keep them on their balance [sheet], thus increasing capitalisation, but in reality they do not develop the deposits,” he told Mosnews, a Russian news website. 
 
Hambro said it was seeking clarification and was not aware of any environmental breach. read more

November 30, 2006
Rory Watson in Brussels

Five groups pay €519m penalty

Whistle-blower Bayer is spared fine
 
The European Commission has taken a record €1.843 billion (£1.24 billion) in antitrust fines so far this year after imposing a €519 million penalty yesterday on five groups of companies for operating a synthetic rubber cartel.

With at least one more major anti-competition decision to be taken this year, the Commission’s clampdown on illegal cartels looks set to top € 2 billion for 2006, overtaking the previous record of €1.837 billion set in 2001. The total does not include separate action for abuses of dominant position — the Commission’s charge against Microsoft over its Windows operating system. 
 
The penalties, which are paid into the European Union budget, demonstrate the determination of Neelie Kroes, the Competition Commissioner, to tackle illegal behaviour. read more

Decision Illustrates
Perils of Cooperating
In Price-Fixing Cases
By MARY JACOBY and ANNE JOLIS
November 30, 2006; Page A12

BRUSSELS — European regulators, in slapping five chemical companies that had fixed prices on synthetic rubber with the EU’s second-highest-ever group-cartel fine, also exposed what defense lawyers call an increasing problem: the inability in Europe to plea-bargain with cooperating antitrust offenders.

The European Union yesterday fined five companies a total of €519 million ($685 million) for fixing prices in Europe on synthetic rubber used to produce tires, shoe soles, floor coverings and golf balls. read more

Crude-oil futures rallied for a third straight session, climbing above $62 on the New York Mercantile Exchange on unexpected declines in inventories and forecasts of chilly weather heading toward the East Coast. Here is Wednesday’s roundup of oil and energy news:

* * *
WAGONER’S PROMISE: The Greater Los Angeles Auto Show began with two days of media previews before opening to the public. General Motors CEO Rick Wagoner said the U.S. needs to reduce dependence on foreign energy and insisted the No. 1 auto maker is accelerating its efforts to meet the challenge by being the first to offer a plug-in hybrid and by expanding its production of biofuel vehicles. read more