December, 2007:

December 28, 2007
Carl Mortished, World Business Editor

Gazprom has renewed its campaign against foreign ownership of Russian gas resources with an attack on ExxonMobil’s Sakhalin-1 project in Eastern Siberia, the last remaining Russian gas venture under foreign control.

ExxonMobil’s plan to sell gas to China was criticised heavily by Alexander Ananenkov, Gazprom’s deputy chairman. He described ExxonMobil’s efforts to export gas from Sakhalin as “attempts to sidestep Russian gas consumers, depriving them of gas which belongs to them by right”. read more

By Russell Hotten, Industry Editor
Last Updated: 10:23pm GMT 28/12/2007

Royal Dutch Shell has again delayed a decision on whether to press ahead with controversial investments in Iran, as Europe’s largest oil and gas company weighs up the increasing costs of the project and political opposition in the United States.

The Anglo-Dutch giant will not now decide on a $10bn (£4.9bn) project to exploit part of Iran’s vast South Pars gas field for at least a year. Shell risks seeing rivals also knocking on Teheran’s door being given first refusal on some of the many lucrative contracts instead. read more

12/28/2007, 10:52 am

News Note: Shell Oil settles pipeline spill case from 1988 for $46 million. Twenty million will go to build new water lines in Limestone Township. Another $26 million will compensate 1,500 residents.

If you follow the timeline, it goes like this. It took Shell six years to begin providing pure water for residents. It took nine years for the state and the county to sue Shell. It took 14 years for the spill to reach Wiley Creek.

One resident remembers buying his Limestone Township home four years after the break, and received no notice at all that 100,000 gallons of gasoline had seeped into the water system. read more

Friday, December 28, 2007. Issue 3815. Page 5.
Combined Reports

Gazprom this year held talks to join ExxonMobil’s Sakhalin-1 oil-and-gas project, an unidentified person close to the gas giant said.

Gazprom, which took control of Shell’s Sakhalin-2 project last year, now wants a stake in Exxon’s venture, Vedomosti reported Thursday. Gazprom held talks with both Exxon and its partner in Sakhalin-1, state-controlled Rosneft, Vedomosti said.

Exxon has only held negotiations with Gazprom regarding sales of gas from Sakahlin-1, Exxon spokeswoman Dilyara Sydykova told the newspaper. Sydykova and other company spokespeople were unavailable to comment. read more

GABRIEL KAHN
December 28, 2007 2:27 p.m.

ROME—The government of Kazakhstan has signaled what could be a breakthrough in its long-running standoff with foreign oil companies developing the massive Kashagan oil field in the northern Caspian Sea.

In a Dec. 26 letter viewed by The Wall Street Journal, Kazakh President Narsultan Nazarbayev, has called the heads of the six foreign oil firms to Astana, the Kazakh capital, for a meeting on Jan 11 with himself and the country’s prime minister.

The presence of Mr. Nazarbayev, who holds a tight grip on power in the oil-rich country and has rarely been involved in talks over the oil field, is a signal that the two sides could be close to a deal. read more

By Dino Mahtani
Published: December 28 2007 02:00 | Last updated: December 28 2007 02:00

BP, Europe’s second-largest oil company, will review its investment plans in the US state of Alaska following legislation to increase taxes on oil producers there.

The move by the state government is a blow to all oil companies doing business in one of the most important oil provinces in the US, the world’s third-largest oil producer.

But it is also another piece of bad news for BP which is still under investigation by state officials for last year’s oil spill in Prudhoe Bay, Alaska, for which the company has already paid $20m in fines. read more

12/27/2007, 3:01 pm

By Jon Krenek
[email protected]
815-937-3370

If you are one of 1,500 Limestone Township property owners, check the mail for an envelope marked with the word “important” in red ink. It may look like junk mail, but it’s not.

Forms were mailed this week, as well as instructions, for claiming the portion of the $26 million Shell Oil agreed to pay to settle a lawsuit over the 1988 gasoline pipeline spill.

“People will have to read them, get receipts for their expenditures and send them to the administrator,” said Joseph Yurgine, the attorney who represented residents in the class action lawsuit against Shell Oil. “In my view, every penny of that settlement should end up in the pockets of Limestone claimants.” read more

Oil Firm’s Investment Aims at Stability
To Offset Less-Reliable Projects
By JOHN M. BIERS
December 28, 2007; Page A8

Italian oil titan Eni SpA, which has benefited from its ability to invest and expand in countries off-limits to American rivals, this year sharply raised its exposure on the home turf of Chevron Corp. and Exxon Mobil Corp.

Eni’s shift toward greater investment in the U.S. reflects a strategic effort to diversify a production portfolio that has relied disproportionately on countries such as Iran and Nigeria, where political instability means a greater chance of a production disruption. read more

By Cristina Jimenez
Published: Friday December 28 2007

Oil from algae, the microscopic plants that produce a green covering on the surfaces of ponds and neglected outdoor swimming pools, may soon be filling diesel pumps.

As crude oil has moved towards $100 (€70, £50) a barrel and sustainable alternatives are sought in a bid to reduce carbon emissions, researchers are investigating “second- generation” biofuels – those not made from food crops such as soya or corn. Scientists have found that, in terms of oil yield, algae could be the most efficient source of biofuel. read more

Thursday December 27, 3:31 pm ET
By John Wilen, AP Business Writer 

Oil Prices Jump After Government Reports Crude and Heating Oil Supplies Fell Last Week

NEW YORK (AP) — Oil futures rose Thursday after the government reported larger-than-expected declines in crude and heating oil inventories.

In its weekly inventory report, the Energy Department’s Energy Information Administration said oil inventories fell by 3.3 million barrels last week, more than double the 1.3 million barrel decline analysts expected. Inventories of distillates, which include heating oil and diesel fuel, fell by 2.8 million barrels, much more than the expected drop of 800,000 barrels. read more

ENRC, the London-listed Kazakh mining and metals group, said that it plans to offer shares on the Kazakh stock exchange in 2008. ENRC is the world’s sixth-biggest iron ore exporter by volume and produces about 16 per cent of Kazakhstan’s electricity.

Regency Mines, which is quoted on London’s junior Alternative Investment Market and focuses on exploring for copper and nickel in Western Australia and Queensland, reported a wider full-year pre-tax loss of £742,265, compared with a loss of £169,453 a year earlier, on lower turnover and increased exploration costs. read more

December 28, 2007
Carl Mortished, World Business Editor

Shell is investing in Chinese coal, buying a controlling stake in a coalbed methane project, an alternative resource that China’s Government is keen to promote as it seeks to diversify its country’s energy supplies.

Shell is buying an interest in a 30-year production-sharing contract that covers 1,015 sq km in Shanxi, a northern province bordering Inner Mongolia. Verona Development Corporation, an American company, is selling 55 per cent of the North Shilou block to Shell for an undisclosed sum. It will retain 5 per cent and China United Coalbed Methane Company will hold the remaining 40 per cent. read more

Thu Dec 27, 2007 12:56pm EST 

MOSCOW, Dec 27 (Reuters) – Russia’s gas export monopoly Gazprom (GAZP.MM: Quote, Profile, Research) will increase capital investment by 43 percent in 2008 to a record level of almost $20 billion as it speeds up development of Arctic fields and new pipelines.

Gazprom has prioritised equity investment over capital expenditures for several years because of massive new asset purchases despite investor criticism over inadequate new -production investment amid stagnant mature-field output in Siberia. On Thursday the world’s largest gas producer said its state-controlled board had approved its capital investments, which will rise to a record of 479.4 billion roubles ($19.41 billion) in 2008 from 335.5 billion roubles in 2007 and 324.9 billion in 2006. read more

The Royal Dutch Shell headquarters in The Hague. Photo: Robin Utrecht/EPA

Terry Macalister , Thursday December 27 2007 

Shell has expanded its interests in China by taking control of a pioneering project to meet some of the country’s burgeoning demand for energy using methane gas from underground coal seams.

The Anglo-Dutch group has bought a 55% equity stake from Verona Development Corporation and will operate the North Shilou project, 150km south-east of Changbei gas field, where Shell is also active in a conventional gas production scheme with PetroChina. read more

27 Dec 2007 

Shell China Exploration and Production Company Limited has acquired a 55% equity interest in a coalbed methane venture in Shanxi Province and will take over as operator.  

China’s Ministry of Commerce recently approved an agreement for Shell to acquire Verona Development Corporation’s majority equity position in a 30-year production sharing contract covering the North Shilou block, an area of 1,015 square kilometres in the eastern part of the Ordos Basin.

Verona maintains a 5% interest in the venture with China United Coalbed Methane Company (CUCBM) holding the remaining 40% equity. read more

Vidya Ram, 12.27.07, 7:45 AM ET

LONDON – If the foreign operators of Russia’s Sakhalin-1 natural gas field weren’t concerned enough after BP was ousted from a major venture over the summer, then Thursday’s comments by a senior Gazprom executive should certainly have them reaching for the vodka.

Gazprom Deputy Chairman Alexander Ananenkov lambasted the operators of Sakhalin-1, arguing that a handover of control to them had led to an “infringement of Russia’s national interests,” and had turned Russian consumers into “poor relations who see their gas siphoned off.” read more