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BP Pays $7 Billion for Offshore Assets

BP PLC's $7 billion deal with Devon Energy Corp should help dispel some of the misgivings that have weighed on the British oil major's stock in recent years—particularly doubts about its ability to keep pumping more and more oil.

Essar still in Talks With Shell to Buy Refineries

THE WALL STREET JOURNAL

By ERIC YEP

MUMBAI — India’s Essar Oil Ltd. Wednesday said it is still in talks with Royal Dutch Shell PLC to buy three refineries in Europe, dismissing a local media report that the two companies had put the negotiations on the back burner.

“Shell and Essar can confirm that they are still in negotiations around the possible sale and purchase of Shell’s three refineries at Stanlow in the U.K., and Heide and Harburg in Germany,” Essar spokesman Manish Kedia told Dow Jones Newswires. read more

BP Looks to Boost Refining Profits

LONDON—BP PLC on Tuesday said it is pushing through the biggest shake-up of its oil-production business since it acquired Amoco 12 years ago, as it seeks to increase annual profits by more than $3 billion over the next two to three years.

Shell’s Pension Fund Shies Away from Active Management

THE WALL STREET JOURNAL

By MARK COBLEY and PHIL CRAIG

The £10.5 billion ($14.3 billion) pension fund for Royal Dutch Shell PLC has become the latest big investor retreat from active fund management, in a further blow to managers already suffering from reduced market values and a poor economic outlook.

In documents posted on the pension plan’s Web site, the fund’s trustees wrote that they had placed an upper limit on the amount they would entrust to stockpickers: 40% of its equities holdings. The fund didn’t say what percentage it previously had under active management, but it didn’t previously have an upper limit. It has also upped the percentage of its investments that go to passive bond investments such as those tracking bond indexes. read more

Indian Energy Firms Pursue Assets Abroad

Following on its international acquisitions in steel and outsourcing in recent years, Essar is in talks with Shell to pay as much as $1 billion for three oil refineries in the U.K. and Germany, people close to the situation say. Last year, the company bought out the 50% stake that Shell, BP PLC and Chevron Corp. owned in a major refinery in Kenya.

Shell Moves to Cut Executive Pay

THE WALL STREET JOURNAL

FEBRUARY 16, 2010

By JAMES HERRON

LONDON—Royal Dutch Shell PLC on Tuesday proposed changes to the way it pays its executive directors in an attempt to assuage concerns that led shareholders to reject its remuneration package last year.

The proposals constitute a significant step toward greater pay restraint at one of the world’s largest companies at a time when excessive awards to executives, particularly at banks, are a political hot potato.

The salaries of Shell Chief Executive Peter Voser and Finance Chief Simon Henry will be 20% lower than those paid to their predecessors and will be frozen from July 2009 until January next year, according to proposals outlined in a letter from the chairman of Shell’s remuneration committee, Hans Wijers. read more

Vandals Disrupt Shell Pipeline in Nigeria

LAGOS, Nigeria—Vandals over the weekend punctured an oil pipeline operated by Royal Dutch Shell PLC, say Nigerian military and security officials, highlighting how an illicit oil-theft industry in the creeks of the Niger Delta continues unchecked.

Gazprom raking it in at the expense of Shell

Below an extract from a Wall Street Journal article published today reporting on the profits of Gazprom and Sakhalin Energy, the company in which Shell was forced to surrender its majority stake. read more

Shell & Big Oil’s Exploration Challenge

THE WALL STREET JOURNAL

JANUARY 25, 2010, 9.32 A.M. ET

By MATTHEW CURTIN

These days, you have to corral an army of engineers in the desert to build an enormous factory to transform natural gas into a liquid to be used like oil. The capital cost of Royal Dutch Shell’s Pearl gas-to-liquids plant in Qatar is a cool $18 billion or more—10% of its market capitalization. Like Chevron’s Gorgon liquefied-natural-gas project offshore Australia, it shows what big integrated oil companies are capable of.

[shellherd0125] Associated PressShell has bumped up its exploration budget to $3 billion.

But have they neglected bread-and-butter exploration for lower-risk, lower-return engineering projects? Certainly, investors are unimpressed. A decade ago, the international oil companies, or IOCs, accounted for 79% of energy-sector market capitalization and nearly all its net income. Today the figures are 53% and 62%, according to Sanford C. Bernstein. Shell trades at a discount of 13% and 36% respectively to the 2010 forward price-to-earnings multiples at Petroleo Brasileiro and BG Group. But their estimated five-year average output growth is 5% and 9% compared with Shell’s 3%, around the IOC average. read more

Refining Squeezes Oil Profits

THE WALL STREET JOURNAL

January 14, 2010 6:01 P.M. ET

Depressed Demand for Fuel Causes Headaches Even as Crude Prices Firm

By GUY CHAZAN

The global refining industry is turning into a major headache for big Western oil companies, putting a drag on earnings even as rising oil prices improve the prospects for other parts of the oil business.

Refining has been hit as the global recession depressed demand for industrial and transportation fuels, especially in Europe, just as additional capacity is coming onstream in China, India and the Middle East.

Meanwhile, prices for oil products like gasoline and diesel have failed to keep pace with the rising price of crude, putting intense pressure on profit margins for refining—the difference in value between the products a refinery makes and the crude oil used to produce them. read more

Dutch Court to Decide on Shell Lawsuits

THE WALL STREET JOURNAL

JANUARY 9, 2010

By SPENCER SWARTZ

LONDON — A Dutch civil court in The Hague is expected to decide Wednesday whether to hear two lawsuits accusing Royal Dutch Shell PLC of failing to properly maintain pipelines.

According to the suits, Shell’s lax maintenance led to spills in late 2005 that eventually ruined some Nigerian fishing areas and farmland.

Last month, the same Dutch court ruled that a similar case against Shell will go to trial starting Feb. 10. The three cases against Shell seek unspecified financial damages and were filed by the U.K. advocacy group, Friends of the Earth, on behalf of Nigerian farmers. read more

Shell Plans to Grow Aggressively in India

NEW DELHI -- Shell India Ltd. plans to expand "aggressively" as it keeps pace with accelerating fuel consumption in the world's second-fastest-growing economy, Shell India Chairman Vikram Singh Mehta said Friday.

Nigerian President’s Absence Stymies Foreign Firms

The government of President Umaru Yar'Adua said this week that Nigeria's leader, undergoing treatment for a heart condition in Saudi Arabia, was responding to treatment, addressing weeks of speculation about his health. "It is only his doctor that can determine or say when he will come back," Information Minister Dora Akunyili told reporters. The news left many foreign firms here, including U.S. oil company Chevron Corp. and Royal Dutch Shell PLC, in limbo as key oil licenses are set to expire.

Big Oil Jumps for Licenses in Iraq

Foreign oil executives are flocking to Iraq as it prepares to open some of its untapped oil assets to Western oil companies, undeterred by a string of attacks Tuesday that killed more than 120 people.

Global Oil Glut Roils an English Tourist Village

Mr. Kennard is worried about a fleet of oil tankers -- almost 40 in all, each packing hundreds of thousands of barrels of crude and oil-derived products -- that have anchored several miles off the coast of southeast England in recent months. The heavy traffic stems from a near-record excess oil supply, a byproduct of the recession, that is prompting producers to stash oil offshore until they can find customers. The excess supply hasn't stopped oil prices from surging almost 80% this year and padding the pockets of big oil producers like Royal Dutch Shell PLC and the Organization of Petroleum Exporting Countries.

Shell Expects Big Boost From Qatar Gas Projects

However, Shell also said it was delaying the launch of Qatargas 4 by as much as 10 months, from the start of 2010 until the end of the year. Mr. Voser said the timetable had been disrupted by delays at other LNG projects in Qatar involving other big oil companies, such as Exxon Mobil Corp, Total SA and ConocoPhillips.

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