Shell News - 2006

News summaries from company press releases and from unaffiliated news agencies are provided below. The summaries are sorted by month and are further categorized as upstream news, downstream news, and business/finance news. makes no claim as to the authenticity of the information posted here, but provides it as a courtesy to our visitors. The information provided on this page was obtained from company-provided press releases and the New York Times and the Los Angeles Times, and is believed to be reliable, but we do not guarantee its accuracy. Neither the information, nor any opinion expressed, constitutes a solicitation of the purchase or sale of any stock or option or any claim of authenticity. You are encouraged to contact the relevant corporations and news agencies for the most accurate information.


• Upstream news:

- Shell Development (Australia) Pty Ltd (Shell) has been awarded exploration rights to a block in the Browse Basin offshore Western Australia, in which Shell will have a 100 percent interest. The permit area, WA-371-P, is located in the Caswell Sub-basin in the northern Browse Basin, approximately 450-km west northwest of Broome. This block lies in relatively shallow water depths that range between 200m and 300m and is adjacent to the giant Ichthys/Brewster gas field. For the first three years, Shell has committed to seismic studies, which will include the reprocessing of a large 3D seismic grid and in-depth reservoir analysis; field development planning; and the drilling of 12 wells. There is also significant potential for a further three-year programme.

- Shell Malaysia (Shell) announced that a Shell - Petronas Carigali - ConocoPhillips joint venture has made its fourth oil and gas discovery with their recent Pisagan-1A exploration well, located in Deepwater Block G, in waters offshore northwest Sabah, Malaysia. The Pisagan-1A exploration well encountered both oil and gas in the reservoir objective. The discovery well was drilled in a water depth of 1465 metres. The joint venturers in Block G are Shell Malaysia (35%), ConocoPhillips (East Malaysia) (35%) and Petronas Carigali (30%). Shell Malaysia is the operator of the Block on behalf of the joint venturers.

• Downstream news:

- Shell Nigeria Exploration and Production Company announced the first crude oil shipment from the Bonga deepwater oil and gas field offshore Nigeria. The landmark shipment from Nigeria’s first deepwater oil discovery involved the pressurized transfer of crude from the Bonga Floating Production Storage and Offloading (FPSO) vessel via a nearly two and a half kilometer long dynamic flexible pipe, to the offshore loading buoy and onto the ocean going tanker. Some 200,000 barrels of crude were loaded onboard the vessel ARION, which completed off take at about 13:30 hours on December 29 2005 before departing the field. Oil production at the Bonga facility is expected to ramp up to some 200,000 barrels per day in 2006.

- Volkswagen, Shell and Iogen Corporation announced that they will conduct a joint study to assess the economic feasibility of producing cellulose ethanol in Germany. This advanced biofuel produced by Iogen can be used in today’s cars and can cut CO2 emissions by 90% compared with conventional fuels. Iogen’s cellulose ethanol is a fully renewable advanced biofuel made from the non-food portion of agriculture residue such as cereal straws and corn stover, and is one of the most cost-effective ways to reduce greenhouse gas emissions in road transport. All automotive manufacturers warrant the use of cellulose ethanol blends: 10% (E10) in North America and 5% (E5) in Europe. In 2003, the European Union issued a biofuel directive in response to anticipated shortages and rising costs of fossil fuels. The directive targets 5.75% biofuels by 2010. The US Energy Policy Act of 2005 introduced a nationwide renewable fuels standard (RFS) that will double the use of ethanol and biodiesel by 2012.

- The first liquefied natural gas (LNG) cargo from Nigeria LNG's Train 4 left Bonny Island on Saturday January 7th bound for the Lake Charles Terminal in the United States. The shipment marks the beginning of the Initial Supply Period (ISP) to Trains 4 & 5 buyers: BG, ENI, Iberdrola, Shell, Total and Transgas. Together, Trains 4 & 5 form the NLNGPlus Project, which will supply LNG to European and North American destinations. NLNG's Train 4 produced its first LNG in fourth quarter 2005 and Train 5 is currently being prepared for start up. These two trains will increase the company's LNG production capacity to over 17 million metric tonnes per annum (MTPA).

- Brunei Shell Petroleum Co Sdn Bhd (BSP) announced the start of crude oil production from Phase III of its Champion West field located 90 kilometres offshore. Early signs have confirmed that this well is a record production well for BSP flowing oil at an initial rate of 16,700 b/d (2,650 m3/d). Champion West is also producing gas and by 2010, almost a quarter of BSP’s gas production will come from this field.

• Business/Finance news:

- Niger River delta communities in Nigeria have fought for months for right to control potentially vast field of crude oil underneath village of Obioku; conflict has left dozens dead and highlighted struggle of impoverished communities to win benefits from oil boom; Nigeria sends 13 percent of its oil revenues back to states, but corrupt local officials siphon off much of that money; Royal Dutch Shell signed agreement with local villagers to develop Obioku, but agreement has sparked conflict with town of Odioma, which also claims area

- Oil and Natural Gas Corporation Ltd. (ONGC) and Shell Exploration Company B.V. (Shell) signed a Memorandum of Understanding (MoU) to examine significant opportunities for future co-operation both in India and other regions across the world. The MoU covers possible areas of co-operation across the full range of upstream and downstream activities, including exploration and production, coal gasification, natural gas, oil products and refining and petrochemicals.


• Upstream news:

- Movement for Emancipation of Niger Delta has managed to shut down nearly fifth of Nigeria's vast oil production, briefly push global crude oil prices up more than $1.50 barrel and throw Nigeria's government into crisis over group's demand that oil-rich but squalid region be given greater share of wealth it creates.

• Downstream news:

- The CNOOC and Shell Petrochemicals Company Limited (CSPC) announced it successfully produced on-specification ethylene and propylene on 29 January, 2006, at its petrochemicals complex in Daya Bay in Huizhou, Guangdong Province, China, following the completion of start-up and commissioning activities. The Daya Bay project is fundamental to the Shell strategic objective to grow a significant presence in China, where demand for plastics and packaging is expected to make up 30% of world consumption by 2010.

- Shunned across much of eastern Long Island and hardly winning popularity contests farther west and in Connecticut, Broadwater Energy has found a friend in the North Fork Village of Greenport for its plans for a floating natural gas plant in Long Island Sound.

• Business/Finance news:

- The Hague, 2nd February, 2006 - Royal Dutch Shell plc provided an update of its activities in alternative energy including Biofuels, Wind, Solar and Hydrogen. Shell has now invested over US$1 billion in alternative energies, making it one of the world’s leading companies in the sector. In partnership with Iogen of Canada, cellulose ethanol Biofuels are being successfully produced from plant waste. By producing Biofuels from plant waste instead of food crops, the potential stress on the food chain is alleviated. The Iogen process produces a fuel which can be used in today's cars, cutting CO2 lifecycle emissions by 90% compared with conventional fuels. Shell recently announced a Memorandum of Understanding with Volkswagen and Iogen to explore the economic feasibility of producing cellulose ethanol in Germany. Shell Canada has been working with Iogen to develop a viable commercial framework for a facility in Canada. Wind is currently one of the most promising sources of renewable energy. Shell’s share of wind energy capacity is currently greater than 350MW, and is expected to reach approximately 500MW in 2007. Included in this growth is the first Dutch offshore wind project, the 108MW Offshore Windpark Egmond aan Zee (Shell share: 50%). Progress has also been made with the development of the London Array offshore project in the UK (Shell share: 33.3%). This project has a potential capacity of 1,000MW, making it one of the world’s largest planned wind farms. In the United States, Shell is already one of the largest wind energy developers, and is actively progressing projects in Texas, Wyoming, Idaho, West Virginia, California, and Hawaii. Shell recently acquired the development rights to Mount Storm, a 300MW wind park (Shell share: 50%) in West Virginia – potentially one of the largest new projects in the USA. Progress has also been made in permitting the 200MW Cotterel Mountain wind project (Shell share: 50%) in Idaho. Shell also announced a Memorandum of Understanding today outlining plans to explore the potential for wind energy developments in China in partnership with Guohua Energy Investment Corporation of the China Shenhua Group, a leading national energy supplier. In the area of Solar energy, Shell has been progressing the next generation of technologies, including CIS ‘thin-film’. Shell believes that non-silicon based technologies such as CIS are more likely to become competitive with retail electricity in the coming years. Shell today announced the signing of a Memorandum of Understanding with Saint-Gobain, one of the world’s leading producers of glass and other building materials, to further explore the Shell CIS technology and consider joint development. In light of this focus on CIS ‘thin film’ technology, Shell decided to divest its crystalline silicon solar business activities to SolarWorld AG. Shell’s silicon-based business has an annual production of approximately 80MW. Manufacturing facilities, sales and marketing, and silicon research and development activities in Germany and the United States (Washington state and California) will transfer to SolarWorld, including all 579 staff currently involved in silicon PV. Finally, Shell announced that it will be opening at least two new Hydrogen stations in the U.S.A. in 2006, supporting continued efforts to demonstrate the viability of a future Hydrogen economy. Shell is also active in this area in Asia, and is supporting the recently announced Hydrogen station at Tongji University in Shanghai. Shell Hydrogen continues to take a leading role in joint government/industry discussions and partnerships to plan and develop hydrogen and fuel cell activities, including the EU Hydrogen & Fuel Cell Technology Platform, the California Fuel Cell Partnership and the Japan Hydrogen and Fuel Cell Demonstration Project.

- Royal Dutch Shell plc released its 4th quarter and full year results and 4th quarter interim dividend announcement for 2005 at 07:00 GMT (08:00 CET and 02:00 EST) on Thursday February 2nd, 2006. Delivering good results in the quarter; building the future. Record full year results with basic earnings per share of $3.79 for 2005 and $0.67 for the fourth quarter • Solid Upstream performance in the quarter captures oil and gas price increases • Good Oil Products earnings in the quarter reflect operational delivery and favourable market conditions • 3.52 million barrels of oil equivalent (boe) per day production 2005 in line with guidance • Fourth quarter dividend of €0.23 per share equivalent to some $1.9 billion (subject to exchange rates) • $2.6 billion or 1.2% of Royal Dutch Shell shares bought back for cancellation in the fourth quarter and $1.7 billion paid for Royal Dutch shares

- Shell announced that Bangalore would be the location for its latest technology centre, Shell Technology India (STI). The centre will deliver high-end technical studies, projects and technical services for Shell across the globe, as well as supporting interests in India. Currently, Shell has major research and development facilities in the USA and The Netherlands, and Bangalore will take its place with these. The services will span upstream exploration and production activities as well as downstream refinery and chemical operations. STI will also provide access to cutting-edge Indian talent.

- Oil prices rose sharply after a series of attacks in the Niger Delta that shut down nearly a fifth of Nigeria's oil production. Brent crude oil for April delivery jumped $1.57 a barrel, to $61.46, on London's ICE Futures exchange.

- Royal Dutch Shell announced that it had received notification that the Federal High Court in Port Harcourt, in Nigeria gave judgement in a case between the Shell Petroleum Development Company of Nigeria Limited operated joint venture ("SPDC") , of which Shell owns 30%, and a group called "Ijaw Aborigines of Bayelsa State". The Ijaw Aborigines group is demanding that SPDC complies with a Resolution of the Nigerian National Assembly which required SPDC to pay $1.5 bn (Shell share $450m) to the Ijaw communities for alleged environmental damages arising from SPDC's operations. The High Court has entered a judgement in favour of the Ijaw Aborigines group. SPDC believes that its appeal, which it has filed, has strong grounds as independent expert advice demonstrates that there is no evidence to support the underlying claims. SPDC remains strongly committed to dialogue with the Ijaw people and all its other stakeholders.


• Upstream news:

- Shell and Statoil have signed an agreement to work towards developing the world's largest project using carbon dioxide (CO2) for enhanced oil recovery (EOR) offshore. The concept involves capturing CO2 from power generation and utilizing it to enhance oil recovery, resulting in increased energy production with lower CO2 impact. The project consists of a gas-fired power plant and methanol production facility at Tjeldbergodden in Mid-Norway, providing CO2 to the Draugen and Heidrun offshore oil and gas fields. Power from the plant will also be provided to the offshore fields, enabling near zero CO2 and nitrogen oxide (Nox) emissions from these installations. The project is in line with international and national climate aspirations and responds to the important challenges of increasing energy supplies and addressing the related CO2 emissions. The project will contribute to long-term power balance in Mid-Norway. At the same time it secures stable power delivery to industry producing vital hydrocarbons for Europe. The project could potentially store approximately 2- 2.5 million tonnes of CO2 annually in two different fields.

- Shell Exploration & Production in the Americas (Shell EP Americas) announced that it has established SURE Northern Energy Ltd. (SURE Northern), a Canadian corporation, to evaluate and potentially develop heavy oil resources secured in the February 8, 2006 Alberta Department of Energy Oil Sands Public Offering. SURE Northern submitted the successful bid of C$465 million (around $400 million) for 10 parcels of land through a land agent.

• Downstream news:

- Shell China Holdings B.V. announced that it has signed an agreement to acquire Koch Materials China (Hong Kong) Limited (KMC), which is involved in the manufacture and marketing of bitumen in China. The deal will more than double the size of Shell's bitumen business in the country. KMC has interests in companies operating six bitumen manufacturing plants in Tianjin, Xi'an, Foshan, Zhenjiang, Ezhou and Luzhou, with a total production capacity of about 4,200 tons per day, two mobile plants and a supporting technical laboratory in Beijing.

- Royal Dutch Shell plc (Shell) announced that it had completed the review of its global LPG marketing and distribution business and had taken the decision to retain this business within its downstream portfolio. Shell had previously announced in September 2004 that, following an unsolicited offer from an interested buyer; it had decided to review its options with regard to its LPG business. Some parts of Shell’s LPG business have meanwhile been sold, including Portugal, parts of the Caribbean, Brazil, Paraguay and Italy, for around US$350mln, as part of our downstream portfolio rationalisation in those markets. The remainder will remain within Shell’s global downstream portfolio.

- The CNOOC and Shell Petrochemicals Company Limited (CSPC), 50 per cent owned by Shell Nanhai BV, a member of the Shell Group, marked the successful start of operations of its new $4.3 billion petrochemicals complex with a ceremony in Guangdong today. Construction of the complex, 50 per cent owned by the CNOOC Petrochemicals Investment Company Limited, was completed at the end of December 2005 and the ethylene plant started operations on 29 January. The new plant will produce 2.3 million tonnes of products per year to primarily supply Guangdong and the high consumption areas of China’s southeast coastal economic zones.

• Business/Finance news:

- A militant group in the oil-producing delta region that has been demanding a greater share of the oil wealth said in an e-mail message that it had released an American hostage, Macon Hawkins, 68, from Kosciusko, Tex., an employee of a company hired by Royal Dutch Shell.

- At a conference to be held in Brussels and attended by European Commissioners Günter Verheugen and Andris Piebalgs and Austrian Minister for Environment Josef Pröll, leading automotive manufacturers and fuel supply companies will lay out their common vision of sustainable mobility in Europe.

- The Board of Royal Dutch Shell plc (NYSE: RDS.A, NYSE: RDS.B) announce the intended election of Mr Nick Land, currently Chairman of Ernst & Young LLP to replace Sir Peter Burt, who will be retiring as a non-executive director of the Company following the Annual General Meeting of Shareholders on 16 May 2006.

- Royal Dutch Shell plc filed its Annual Report on Form 20-F for the year ended 31 December 2005 with the U.S. Securities and Exchange Commission (SEC).

- Motorsport history was made , as the Audi R10 TDI, powered by Shell V Power Diesel fuel technology, took an awe-inspiring victory in the 12 Hours of Sebring – the first time a diesel-powered sports car has won a world-class endurance motor race.

- Shell UK Limited (“Shell”) announced its support for the National Institute of Energy Technologies as outlined in the 2006 Budget report speech. The National Institute of Energy Technologies will be a public and private partnership aimed at making the UK a world leader in energy technologies.


• Upstream news:

- Shell U.K. Limited (‘Shell’), on behalf of itself and co-venturer Esso Exploration and Production UK Limited (an ExxonMobil subsidiary) announce an increase in gas supply to the UK with the commencement of gas production from the Cutter field in the southern North Sea. The Cutter development will use wind and solar technologies in the production of natural gas. The design of the Cutter field Trident Monotower installation is based on the construction of offshore wind turbines and therefore rests on a single leg. The lower construction and maintenance costs - the fabrication cost alone is around 40% of that of traditional platforms - of the unmanned Monotower platform, compared to conventional designs, enables the access and recovery of small pockets of resources that previously would have been deemed uneconomical.

- Dedicated team accomplishes “industry-firsts” to bring largest producing platform affected by Hurricane Katrina online by end of May. Shell Exploration & Production Company (Shell) is ahead of schedule to restart production from its Mars Tension Leg Platform (TLP). To signal resumption, Shell began to notify the appropriate Gulf of Mexico mid-stream transportation, marketing businesses and downstream customers to secure sales for initial, post-Katrina, oil and gas production. Mars is the largest producing platform in the Gulf of Mexico that was affected by Hurricane Katrina, representing about 5 percent of current Gulf of Mexico daily production. Based on progress to date, Shell expects that construction activity necessary for initial production at Mars will be complete by the end of April. A brief re-commissioning and start-up process will follow, and partial production is expected to resume in the second half of May. Mars production is expected to be restored to pre-Katrina rates by the end of June.

- Shell Brasil Exploration & Production (Shell) and Petrobras confirm that Shell has exercised its pre-emption option for an additional 30% participating interest in the Shell operated BC-10 block located offshore Brazil. Further, Shell and Petrobras have agreed, through Petrobras waiving its pre-emption rights, to the on-sale of 15%, half of Shell’s additional stake acquired through this pre-emption, to the Indian National Oil Company, ONGC Videsh Ltd (OVL). Shell is a leading international player in offshore Brazil, with production from the Shell-operated Bijipurá and Salema fields and interests in 14 exploration blocks. Technical and commercial studies are underway for the development of resources in BC-10, which would be Shell’s second operated development in Brazil, with the potential for production of around 100,000 barrels of oil per day.

• Downstream news:

- Sakhalin Energy Investment Company Ltd. signed a full Sales and Purchase Agreement (SPA) to supply Hiroshima Gas Co. Ltd. with 0.21 million tonnes of liquefied natural gas (LNG) per annum for 20 years. This SPA follows an earlier Heads of Agreement that was signed in May 2005, and completes the full terms and conditions of the LNG sales and purchase agreement. This deal is the first one involving use of a small LNG carrier to Sakhalin, and indicates the flexibility that can be offered at the Sakhalin Energy LNG plant marine loading facilities. Hiroshima Gas is planning to use its newly built ice class LNG vessel with a capacity of approximately 20,000 cu m to transport the LNG to its own receiving terminal in Hatsukaichi.

- Royal Dutch Shell plc welcomed the below announcement by Motiva Enterprises LLC that it has made significant progress toward expanding refining capacity in the United States. A Final investment decision has not yet been taken on this project: 325,000-barrel-per-day expansion would enhance supplies of gasoline, diesel and aviation fuel in United States The potential expansion would bring much needed supplies of transportation fuels to the U.S. market – particularly the Eastern and Southern regions of the country where Motiva facilities are located. The new capacity would be projected to come online in 2010.

• Business/Finance news:

- Royal Dutch Shell plc announced the appointment of four university partners for its global Project Academy, which has been established to support its capital projects programme. The four universities, who will work together with Shell as a consortium, are: Cranfield School of Management (UK); Delft University of Technology (Netherlands); The University of Texas at Austin/McCombs School of Business (USA) and Queensland University of Technology (Australia).


• Upstream news:

- Shell Nigeria Exploration and Production Company Ltd (SNEPCo) welcomes the start-up of production from the Erha deepwater development located approximately 60 miles (97 kilometers) offshore Nigeria in 3,900 feet (1,200 meters) of water. SNEPCo has a non-operated interest of 43.73 percent in the Erha developments. The first phase of the Erha and Erha North Development will create a nameplate capacity of about 210,000 barrels of oil a day, and about 300 million cubic feet of gas a day.

• Downstream news:

- The Shell Petroleum Company Limited, a subsidiary of Royal Dutch Shell plc (Shell), announced that it had signed an agreement relating to the acquisition of BP’s shareholding in the Shell-BP 50/50 oil products marketing joint venture companies in Kenya, subject to regulatory approval. The JV companies include Kenya Shell Limited, BP Kenya Limited and Shell & BP (Malindi) Kenya Limited. The specific commercial details of this transaction are confidential. The JV companies are engaged in the marketing, sale and distribution of retail, commercial and aviation fuels and lubricants, LPG and bitumen, and are supported by 2 main distribution terminals and a network of some 130 retail service stations geographically spread throughout Kenya.

- Anglo American plc (“Anglo American”) and Shell Gas & Power International B.V. (“Shell”) announced the formation of an Alliance in the field of coal conversion to clean energy. The two leading companies aim to maximise the benefits from the emerging field of clean coal energy by taking selective equity positions in coal conversion projects. These projects will utilise the extensive coal reserves of Anglo American and combine its mining capabilities with Shell’s leading-edge technologies. The objective is to extract, gasify and then convert coal into chemicals, hydrogen, power, liquid hydrocarbons and other uses.

• Business/Finance news:

- An agreement was signed on 3 May 2006 with Rob Routs, Executive Director responsible for Downstream stipulating that, subject to re-election at the Annual General Meeting on 16 May, Mr. Routs will continue in his present roles, including as Executive Director of Royal Dutch Shell plc and Executive Director Downstream, until 31 December, 2008.

- Royal Dutch Shell plc updated public on its strategy. Chief Executive Jeroen van der Veer commented “our strategy of ‘more upstream, profitable downstream’ is on track”. “Upstream, we are committed to increase our production to 3.8-4.0 million barrels of oil equivalent in 2009, and we have record investments for our future in hand. Downstream, we are making selective growth investments, after a period dominated by disposals. Competitive cost performance and operational excellence are embedded in our strategy. Our downstream businesses should generate over $1.0 billion of further improvements by the end of this decade.”

- Royal Dutch Shell plc released its 1st quarter results and 1st quarter interim dividend announcements for 2006 at 07:00 BST (08:00 CEST and 02:00 EDT) on Thursday 4 May, 2006. • CCS earnings of $6,088 million, up 12% • First quarter results of $0.94 basic CCS earnings per share, up 15% versus first quarter 2005 • Upstream performance satisfactory, underpinned by oil and gas price increases, LNG earnings and production of 3,746 thousand barrels of oil equivalent (boe) per day, up 1% excluding hurricane and pricing effects • Downstream earnings robust against moderated market conditions versus first quarter 2005; Chemicals earnings impacted by lower margins • First quarter dividend of €0.25 per share increased by 9% • $1.5 billion or 0.7% of Royal Dutch Shell shares bought back for cancellation during the first quarter

- Royal Dutch Shell plc welcomes Shell Canada Limited's bid to acquire of BlackRock Ventures Inc: Calgary, Alberta - Shell Canada Limited (TSX:SHC) and BlackRock Ventures Inc. (TSX-BVI) announced that they have entered into an agreement whereby Shell Canada will make an all-cash offer to acquire all of the issued and outstanding shares of BlackRock by way of a take-over bid

- Royal Dutch Shell released its ninth annual report on its environmental and social performance. The report underlines the company's commitment to help meet the world's current and future energy needs in environmentally and socially responsible ways. The Shell Sustainability Report 2005 discusses at length the energy challenge facing the world over the next half-century, which will require governments, energy users and producers to do three things simultaneously: meet the increasing demand for energy; keep supplies secure; and reduce energy's environmental and social impacts.


• Upstream news:

- Ukrgazvydobuvannya (UGV) and Shell Exploration and Production (Shell) signed a wide-ranging oil and gas exploration Joint Activity Agreement (JAA) at a special ceremony attended by Ukraine President Viktor Yuschenko. UGV is a subsidiary of NAK and this JAA represents a further important milestone in cooperation between NAK and Shell following an agreement in May 2005 to carry out joint studies in the Dniepr Donets Basin, in central-eastern Ukraine. The agreement covers an area of more than 31,000 km sq, and is thought to contain potentially significant resources of natural gas. Under the terms of the JAA, Shell has farmed-into eight UGV held licenses in the Dniepr Donets Basin with access to deep potential reservoirs, which partly lie beneath large scale shallower fields already in production.

- Facing angry lawmakers from both political parties, executives from three major oil companies -- Royal Dutch Shell, Chevron and ConocoPhillips -- indicated that they might be willing to give up sizable taxpayer subsidies for drilling in the Gulf of Mexico.

- Sakhalin Energy has successfully completed the installation of the Lunskoye-A gas production platform Topsides, in a record-breaking operation in the Sea of Okhotsk, northeast of Sakhalin Island. The successful ‘mating’ of the installation’s Topsides to the four legs of the concrete gravity base placed on the seabed last summer, follows the 11 day tow of the Topsides from its fabrication yard in South Korea. The Topsides arrived on location on Sunday 18th June. The Topsides settled comfortably onto its final resting place on top of the CGBS at 09:30 a.m., in a process that took several days to prepare since its arrival off the Sakhalin coast. The preparation included the mooring of the installation barge and Topsides in front of the CGBS, the testing of the barge ballasting equipment and the cutting of the sea fastenings.

• Downstream news:

- A new strategic alliance was announced between Shell Singapore and 7-Eleven (Singapore) aimed at providing customers greater convenience. The Alliance, when fully rolled-out, will see 7-Eleven become the operator of Shell Singapore’s retail network of 65 service stations which Shell owns across Singapore* Customers will not only be able to enjoy the ease and convenient access to Shell’s competitively priced quality fuels as before, but now with the alliance, they can have a wider and more comprehensive range of products and services at the 7-Eleven convenience stores.

- Royal Dutch Shell plc (Shell) announced that a Share Purchase Agreement was signed with Sol Investments Limited (Sol), an affiliate of Interamericana Trading Corp. (ITC), for the divestment of its shares in The Shell Company (Puerto Rico) Ltd. The transaction relates to Shell’s Retail and Lubricants businesses and includes a network of 163 retail service stations. Shell’s Commercial and Bitumen businesses and Lubricants Warehousing are excluded from this agreement . The petrochemical plant Shell Chemical Yabucoa Inc. (SCYI), as a separate legal entity is not included in this deal and will continue under Shell management.

• Business/Finance news:

- Shell Canada Limited (TSX:SHC) announced that as of 1:01 a.m. on June 16, 2006, approximately 99,778,511 common shares of BlackRock Ventures Inc. (TSX:BVI) have been validly deposited to the offer by BR Oil Sands Corporation, a wholly-owned subsidiary of Shell Canada, to acquire all of the common shares of BlackRock (including common shares issuable upon the exercise or surrender of any options or conversion of any convertible debentures). BR Oil Sands Corporation has taken up all such shares, which represent approximately 92.8% of the common shares of BlackRock on a fully-diluted basis, and will pay for such shares on June 21, 2006.

- Shell Canada Limited (TSX:SHC) announced that as of 1:01 a.m. on June 27, 2006, approximately 4,319,949 additional common shares of BlackRock Ventures Inc. (TSX:BVI) have been validly deposited to the offer by BR Oil Sands Corporation, a wholly-owned subsidiary of Shell Canada, to acquire all of the common shares of BlackRock (including common shares issuable upon the exercise or surrender of any options or conversion of any convertible debentures). BR Oil Sands Corporation has taken up these additional shares, which, together with those shares previously taken up, represent approximately 98% of the common shares of BlackRock on a fully-diluted basis. BR Oil Sands Corporation will pay for these additional shares today by providing the depositary with sufficient funds for transmittal to the holders of these shares. On June 16, 2006, Shell Canada, through its wholly-owned subsidiary BR Oil Sands Corporation, declared its offer to acquire the common shares of BlackRock to be wholly unconditional.

- Shell Hydrogen B.V., in partnership with Connexxion Holding N.V. and MAN Truck & Bus Company N.V., announced plans to work towards creating the world’s largest hydrogen-fuelled public transport operation in Rotterdam, The Netherlands. The project aims to have the largest hydrogen bus fleet operational in a single region before the end of the decade. Under the proposed scheme more than 20 hydrogen internal combustions engine buses manufactured by the bus builder MAN Nutzfahrzeuge and its subsidiary NEOMAN Bus, will be operated by Connexxion, one of the main Dutch public transport companies. Buses will be fuelled from a Shell combined gasoline-hydrogen service station – the first in the Netherlands. The station is expected to be built and the buses operational by 2009. The same service station will also sell traditional fuels to ordinary motorists. The five-year project will evaluate public reaction as well as the reliability and economics of using hydrogen to fuel public transport in major urban areas. It will also help to establish technical standards for operating hydrogen fuel outlets.

- As previously announced, Shell Company Turkey (Shell) and Turcas Petrol A.S. (Turcas) have signed an agreement dealing with the ownership, operation and management of a joint venture which they are proposing to establish. The joint venture will be engaged in retail, commercial fuels and lubricants marketing and distribution activities in Turkey.


• Upstream news:

- Shell Canada Limited provided an update of its overall in situ oil sands portfolio following the completion of the BlackRock Ventures acquisition, and also outlined its longer-term upgrading strategy. As part of Shell Canada’s continuing review of the BlackRock assets following the acquisition, the company estimates that its total in situ oil-in-place is more than 25 billion barrels. This estimate includes the resources in the BlackRock leases of the Peace River, Cold Lake and Athabasca oil sands regions, along with approximately seven billion barrels of oil-in-place in Shell Canada’s Peace River leases. Over the next two years, Shell Canada intends to build on the existing momentum and grow in situ production to nearly 50,000 barrels per day (bpd) predominately from the base operations at Peace River, the newly acquired Seal and Chipmunk assets, and the initial phase of the Orion SAGD project in the Cold Lake region. This will provide a longer term in situ production potential of 150,000 bpd.

- Qatar Petroleum and Royal Dutch Shell plc announced the launch of the world-scale integrated Pearl Gas to Liquids (GTL) project in Qatar. The Pearl GTL project includes the development of offshore natural gas resources in Qatar’s North Field, transporting and processing the gas to extract natural gas liquids and ethane, and the conversion of the remaining gas into clean liquid hydrocarbon products through the construction of the world’s largest integrated GTL complex in Ras Laffan Industrial City. Upstream, some 1.6 billion cubic feet per day of wellhead gas will be produced from the North Field and transported and processed to produce approximately 120,000 barrels of oil equivalent per day of condensate, liquefied petroleum gas and ethane. The North Field is considered to be the largest single non-associated gas reservoir in the world with estimated recoverable resources in excess of 900 trillion cubic feet. Over its lifetime the integrated project will produce upstream resources of approximately 3 billion barrels of oil equivalent. Downstream, dry gas will be used as feedstock for a new onshore integrated GTL complex which will manufacture an additional 140,000 barrels per day of liquid hydrocarbon products. The Pearl GTL complex will consist of two 70,000 b/d GTL trains and associated facilities. The plant will produce a range of clean liquid products and fuels, comprising naphtha, GTL fuel, normal paraffins, kerosene and lubricant base oils. GTL fuel is the largest component of the product slate and can be used in existing light and heavy-duty diesel engines

- Shell Canada Limited announced that it has issued a formal proposal to proceed with Expansion 1 to the other Athabasca Oil Sands Project (AOSP) joint venture owners. They have 90 days to respond. "We have received our Board's support to take the next step on this important growth project," said Clive Mather, President and CEO, Shell Canada Limited. "Issuing this proposal to the other owners is a key milestone in our strategy to grow mining production from the Athabasca region to 550,000 barrels per day (bpd)." (330,000 bpd Shell share). Expansion 1 is a fully integrated expansion of the existing AOSP facilities, with both new oil sands mining operations on Lease 13 and associated additional bitumen upgrading at Scotford. It also includes construction of common infrastructure that will be sized to support future expansions. The previously announced solvent de-asphalting plant is not included in Expansion 1 because the technology is not yet ready for integration into the upgrading process. It is expected that the Expansion 1 expenditures will be similar between the mine and the upgrader. Shell Canada intends to make a final investment decision for this project in the fourth quarter of 2006 pending regulatory approvals. First bitumen production is expected in late 2009 followed by upgrader production in late 2010.

• Downstream news:

- Royal Dutch Shell plc (Shell) announced that it has signed Sale and Purchase agreements for the sale of its Downstream sales and marketing businesses in the following Pacific Islands: Shell's businesses in Fiji and Tonga will be purchased by Total France SA. Shell's businesses in New Caledonia, Vanuatu and French Polynesia will be purchased by Albert Moux and Partners, a consortium whose Principal is Shell's current co-venturer in French Polynesia, Albert Moux. Shell's businesses in the Cook Islands and Solomon Islands will be the subject of a further announcement. The agreements relate to Shell's Aviation, Marine, Lubricants, Commercial Fuels, Distribution and Retail businesses and include a network of 65 retail service stations and 12 storage and distribution depots.

- Sakhalin Energy, operator of the Sakhalin II Project, has signed a new Heads of Agreement (HoA) for the sale and purchase of liquefied natural gas (LNG) with Japan’s Chubu Electric Power Co., Inc. The Chubu Electric HoA calls for the supply of approximately 0.5 million tonnes per annum (mtpa) of LNG for a period of 15 years, with deliveries to commence in April 2011. Sakhalin Energy and Chubu Electric will now continue discussions to finalise a full Sales and Purchase Agreement. The signing of today’s agreement further enhances Sakhalin’s role as a new strategic supplier of natural gas for Japan, and confirms the wider Asia Pacific Region as a major new market for Russian gas supplies. The LNG will be supplied from Sakhalin Energy’s 9.6 mtpa LNG plant, being built as part of the enormous Sakhalin II Phase 2 project at Prigorodnoye at Aniva Bay on the southern tip of Sakhalin. The plant will have two gas liquefaction process trains, each with a capacity of 4.8 mtpa. Overall design, procurement and construction work of the Phase 2 project is about 75% complete.

- Shell Eastern Petroleum (Pte) Ltd (“SEPL) announced that it has taken a final investment decision to proceed with the construction of a new world-scale ethylene cracker on Bukom Island, Singapore. Named Shell Eastern Petrochemicals Complex* (SEPC), the integrated refinery and petrochemicals project will also include modifications and additions to the Bukom refinery and a new world-scale Mono-Ethylene Glycol (MEG) plant utilising Shell’s proprietary technology on Jurong Island. The cracker and the new MEG plant will create an advantaged site through full integration with the Bukom refinery enabling feedstock and operating benefits. The 800,000 tonnes per annum-cracker will be ideally positioned to supply cracker products to the new 750,000 tonnes per annum MEG plant, planned and existing joint venture derivatives plants and to major customers on Jurong Island via existing undersea pipelines.

- The first Shell-branded automotive retail fuels station in Ukraine has been officially opened 31 July 2006, in Kiev. The retail station, in Bratislavskaya Street, was upgraded and prepared for operation under the leading international retail brand on the basis of a Licence Agreement signed by Shell Brands International AG and LLC “NC“Alliance-Ukraina” (Alliance-Ukraine). It is expected that in the near future a few more Alliance-Ukraine retail stations in the capital will start working under the Shell brand.

• Business/Finance news:

- Royal Dutch Shell plc released its 2nd quarter results and 2nd quarter interim dividend announcements for 2006 at 07.00 B.S.T. (08.00 C.E.S.T. and 02.00 E.D.T.) on Thursday July 27, 2006. All information relating to the release is available below. • Royal Dutch Shell’s second quarter 2006 CCS earnings were $6.3 billion, an increase of 36% versus a year ago and an increase of 42% on a basic CCS earnings per share basis versus a year ago. • Second quarter 2006 cashflow from operating activities was $7.8 billion compared to $6.3 billion a year ago. Excluding working capital movements and taxation effects, cashflow from operating activities was $11.9 billion compared to $8.7 billion a year ago. • Royal Dutch Shell’s second quarter dividend has been announced at €0.25 per share, an increase of 9% from year-ago levels. • $2.5 billion, or 1.1% of Royal Dutch Shell shares were bought back for cancellation during the quarter.


• Upstream news:

- Shell Malaysia has achieved another exploration and production milestone with the first delivery of natural gas from the E8 field off the coast of Sarawak, Malaysia. Operated by Sarawak Shell Berhad, the E8 field is a key component of the E11 Hub Integrated Gas project, one of Shell’s largest ongoing projects in the Asia Pacific region. Under the hub integration project, gas production from surrounding fields is channelled to the E11 complex for processing before being delivered on-shore via pipeline to the PETRONAS Liquefied Natural Gas Complex at Bintulu. The coming on stream of E8 is a major milestone in the overall E11 project. The project go-ahead for E8 was granted in September 2003. After three years and 5,500,000 man-hours, the project delivered first gas on schedule on 24th July. During the peak of fabrication activity, some 1,200 people were working on this project in five different locations.

- Shell Exploration & Production (Shell) welcomed the delivery of first gas from its Pohokura Project in Taranaki, New Zealand.Gas began flowing from the three completed onshore wells through the production station at Motonui, near New Plymouth earlier this month. The field, which is the second largest in New Zealand, is expected to produce around 40,000 barrels of oil equivalent a day at its peak.

• Downstream news:

- Royal Dutch Shell plc welcomes arrival of Mexico’s first-ever Liquefied Natural Gas (LNG) cargo at Altamira’s regasification terminal. The LNG cargo’s arrival marks the start of Altamira’s commissioning phase. Terminal de LNG de Altamira, a joint venture between Royal Dutch Shell plc (50 percent), Total and Mitsui (each 25 percent), today announced the arrival of the first LNG cargo ever to be delivered to Mexico. The 138,000-cubic-meter, Shell-owned LNG cargo was delivered to Mexico’s first LNG regasification terminal near Tampico, Tamaulipas, on the country’s Northeast coast, by the Shell-operated vessel SS Gracilis, after a 14-day, 6,257-nautical miles journey from the Nigeria LNG plant in Africa.

• Business/Finance news:

- Nokia's chairman and chief executive, will succeed Aad Jacobs in the non-executive role at The Hague-based Shell on June 1, Shell said. Ollila, 54, who turned Nokia into the world's biggest mobile phone company, this week said he would step down as CEO the same day.

- The Securities and Exchange Commission has decided to take no action against Sir Philip Watts, the former chief executive of Royal Dutch Shell, over the 2004 scandal involving the overbooking of oil reserves, the law firm representing him said yesterday.


• Upstream news:

- Shell Exploration & Production Company announced that the Mars Tension Leg Platform (TLP), which was heavily damaged during Hurricane Katrina in 2005, is currently producing 190,000 barrels (gross) of oil equivalent per day, which is a 20 percent increase over pre-Katrina rates. As announced on May 22, the Mars TLP resumed production ahead of schedule and was producing slightly above its pre-Katrina rates in July. Estimates placed the Mars platform in Katrina’s eye for about four hours, absorbing 80-foot waves and wind gusts exceeding 200 mph. The Mars TLP floating structure and wells survived the extreme Katrina weather conditions, but the platform drilling rig and some major elements of the topsides production equipment were heavily damaged.

- SURE Northern Energy Ltd. (SURE Northern), a wholly owned subsidiary of Royal Dutch Shell plc. welcomed the announcement by the Alberta Department of Energy that it was successful in securing 5 parcels of land in the latest Oil Sands Public Offering. SURE Northern, a Canadian corporation headquartered in Calgary, submitted the successful bid of C$101.2 million (around $91.5 million). In the February 8, 2006 Alberta Department of Energy Oil Sands Public Offering, SURE Northern secured 10 parcels of land. The acreage secured is adjacent and to the west of those parcels and the appraisal underway on those resources will be extended to include this additional position. SURE Northern also successfully acquired one parcel of land via a land agent, adjacent and to the east of the February parcels in the July 12 lease sale for C$5.1 million (around $4.6 million).

- Energy Investments Australia Pty Ltd (Shell) and Anglo American announced the signing of a joint development agreement (JDA) for the two companies to further advance the Monash Energy clean coal-to-liquids project in the state of Victoria, Australia. This agreement is the first under a clean coal energy alliance formed by Shell and Anglo American in May 2006. The JDA covers a number of project development phases. In the initial concept phase, which is expected to conclude during 2007, Monash Energy in conjunction with technical advisers from Anglo American and Shell, will carry out a study of the commercial and technical aspects, including carbon capture and storage. If successfully concluded, the study would form the basis for the feasibility phase and demonstration activities.

• Downstream news:

- Citing damage to salmon rivers on the Sakhalin Island, the Russian government on Monday withdrew environmental approval for the largest private energy investment in the country, the Royal Dutch Shell-operated Sakhalin-2 liquefied natural gas project.

- Shell China Holdings BV (Shell) has acquired a 75% share in Beijing Tongyi Petroleum Chemical Company Limited and Xianyang Tongyi Petroleum Chemical Company Limited, which produce and market China’s leading independent lubricant brand. Shell China Holdings BV (Shell) has acquired a 75% share in Beijing Tongyi Petroleum Chemical Company Limited and Xianyang Tongyi Petroleum Chemical Company Limited, which produce and market China’s leading independent lubricant brand. The transaction makes Shell the leading international energy company marketing lubricants in China and gives it the third largest share of China’s rapidly growing lubricants market, currently estimated at over six billion litres a year. It also increases Shell’s global finished lubricants volume by 8% giving it approximately 16% of the global branded finished lubricants market.

• Business/Finance news:

- In a sharp face-off involving Russian energy policy, Japan, Britain and the European Union expressed worries on Tuesday about a dispute between the Russian government and a consortium led by Royal Dutch Shell that is developing one of the world's largest oil and natural gas deposits on Sakhalin Island.

- Gazprom, the natural gas operator, has benefited handsomely from its position as the monopoly supplier of Russian natural gas to Europe. Now the Kremlin-backed energy company may get a similar role in Asia. This year Gazprom surpassed BP and Shell to become the second-largest energy company in the world.


• Upstream news:

- Shell Offshore Inc. (Shell) announced that it will develop the Great White, Tobago and Silvertip Fields via a Perdido Regional Development host, located in Alaminos Canyon, offshore Gulf of Mexico, approximately 200 miles south of Freeport, TX. Moored in about 8,000 feet of water, the regional DVA (direct vertical access) spar will be the deepest spar production facility in the world. First production from Perdido is expected around the turn of the decade, with the facility capable of handling 130,000 boe/d. The concept for regional development includes a common processing hub in Alaminos Canyon Block 857 near the Great White discovery that incorporates drilling capability and functionality to gather, process and export production within a 30-mile radius of the facility.

- A Russian official threatened criminal prosecutions against employees of Royal Dutch Shell, ratcheting up pressure on the company's $22 billion oil and gas project on Sakhalin Island on Wednesday. The remarks suggested a further unraveling of the relationship between Western energy companies and the Russian government.

• Downstream news:

• Business/Finance news:

- New research shows tackling climate change for UK affordable at less than 0.5% of the economy. New research released by Shell Springboard shows that the challenge of tackling climate change could create a market of up to £30bn for British business over the next ten years. The findings include: • A market in the UK created by the government climate change programme which could be worth over £30bn cumulatively over the next ten years. By 2010 the market will be double the current size; • The cost of tackling climate change in the UK in 2010 will be affordable at 0.3% of the economy; • Concerted international action to avert climate change could create a global market worth $1 trillion in the first five years alone; Clearly identified opportunities for small and medium sized enterprises (SMEs) across all climate change markets, with case studies of nine SMEs in the UK with leading edge products.

- Royal Dutch Shell plc will release its 3rd quarter 2006 results at 07.00 B.S.T. (08.00 C.E.S.T. and 02.00 E.D.T.) on Thursday October 26, 2006. The results will be available on at 07:00 B.S.T.

- Royal Dutch Shell plc (the ‘Group’) announced that it has approached the Board of Directors of Shell Canada Limited to indicate its intention to offer to acquire the minority interests in Shell Canada Limited (Toronto Stock Exchange, ticker symbol SHC), for a cash price of C$40/share. This proposal would value Shell Canada Limited’s fully diluted minority share capital at approximately C$7.7 billion. The Group owns a 78% stake in Shell Canada Limited. The proposed acquisition follows the successful unification of the Group in 2005 and is a further step in simplifying the Group structure. Once Shell Canada Limited is fully combined with the Group, the business will benefit from a simplified organization, additional economies of scale and portfolio development in the context of the Group’s global strategy.

- Royal Dutch Shell plc released its 3rd quarter results and 3rd quarter interim dividend announcements for 2006 at 07.00 B.S.T. (08.00 C.E.S.T. and 02.00 E.D.T.) on Thursday October 26, 2006.


• Upstream news:

- Shell Brasil Ltda (Shell) announced the first contracts for the development of the Ostra, Abalone and Argonauta fields of the BC-10 deepwater block offshore of Espirito Santo state, Brazil. BC-10 is located in the Campos Basin, approximately 120 km southeast from the city of Vitoria, in water depths of 1500 to 2000 metres. The BC-10 development plans call for a phased development approach with the first phase developing three fields, and a second phase for a fourth field. The initial contracts being awarded include the leased 'Floating Production, Storage and Offloading' (FPSO) vessel with 100,000 bbl/day of oil processing capacity, and a 10-well commitment. The National Petroleum Agency approved the phased development plans in early October. The design calls for a development with subsea wells and manifolds, with each field tied back to a centrally located FPSO moored in 1780 metres of water, placing it in some of the deepest waters for FPSOs in the world. First production is expected around the turn of the decade.

• Downstream news:

- Gazprom Neft and Shell Global Solutions completed the implementation of the joint Navigator.55 Programme aimed at Omsk Refinery improvement. The parties have met the mutual commitments under the Programme. Shell Global Solutions and Omsk Refinery specialists have jointly prepared 28 scenarios of Omsk Refinery development, and 4 of them have been selected. Shell Global Solutions and Omsk Refinery specialists have also shared their experience, and consultancy services have been provided during the Omsk Refinery Improvement Programme. At present, the parties consider the Navigator.55 Project completed. However, the License Agreement for the software and model purchase and use at Omsk Refinery signed by the companies continues to be valid. Gazprom Neft and Shell Global Solutions are looking forward to future cooperation within new projects and programmes.

- Qatar Gas Transport Company Limited (Nakilat) has appointed Shell International Trading and Shipping Company Limited (Shell) to manage its fleet of at least 27 new LNG carriers. Under this 25 year deal, it is expected that operational management will be transferred to Nakilat within 12 years. The agreement will involve Shell providing a range of shipping services to Nakilat including ship management as well as the transfer of know how and expertise to allow Nakilat to develop its own LNG Ship Management Company in Qatar.

• Business/Finance news:

• Shell Erneuerbare Energien GmbH ('Shell') and Saint-Gobain Glass Deutschland GmbH, announce their joint venture to begin solar power panel manufacturing based on advanced CIS (copper indium di-selenide) technology. The joint venture was recently approved by the European Commission. The new entity AVANCIS KG will commence construction of the production facilities with operations likely to commence in 2008 in line with current notification procedure. The initial annual capacity of the plant will be 20 MW with options for rapid expansion. When built, the plant will manufacture solar panels, which when installed would power an equivalent of around 6,000 European households additional per year with clean energy. Generating the same amount of electricity from a coal-fired power plant would release about 14,000 tonnes of CO2 per year.


• Upstream news:

- The Sakhalin II project shareholders (Royal Dutch Shell plc, Mitsui and Mitsubishi) have today reached agreement with the Ministry of Industry and Energy as the authorized state body for the supervision of Production Sharing Agreements of the Government of the Russian Federation, regarding the amended budget of Sakhalin II and cost recovery.

- On December 21, 2006 OAO Gazprom (Gazprom), Royal Dutch Shell plc (Shell), Mitsui &Co., Ltd (Mitsui) and Mitsubishi Corporation (Mitsubishi) have signed a protocol to bring Gazprom into the Sakhalin Energy Investment Company Ltd. (SEIC) as a leading shareholder. Under the terms of the protocol, Gazprom will acquire a 50% stake plus one share in SEIC for a total cash purchase price of $7.45 billion. The current SEIC partners will each dilute their stakes by 50% to accommodate this transaction, with a proportionate share of the purchase price. Shell will retain a 27.5% stake, with Mitsui and Mitsubishi holding 12.5% and 10% stakes, respectively. SEIC will remain the operator of the Sakhalin II project. Gazprom will play a leading role as majority shareholder while Shell will continue to significantly contribute to SEIC management and remain as Technical Advisor. The key focus for SEIC is to complete the project on schedule allowing LNG to be delivered to existing customers in Japan, Korea and the North American West Coast. All existing LNG sales contracts will remain in force and will be honored. Gazprom and existing SEIC shareholders will enter into an Area of Mutual Interest arrangement, which will cover both future Sakhalin oil and gas exploration and production opportunities, and building of Sakhalin II into a regional oil and LNG hub. The shareholders now look forward to implementing the project in line with the current schedule including obtaining all necessary permits and approvals granted in accordance with applicable Russian legislation and the PSA.

- Gazprom will buy a stake in Royal Dutch Shell's $22 billion Sakhalin Island energy project for cash, a Russian deputy minister said Wednesday. Shell had considered a swap for another Siberian gas field as payment for a 25 percent share of the Sakhalin 2 project.

- Russia's Gazprom acquires controlling share of Sakhalin 2, vast energy project in Russia's remote Far East, after highly publicized campaign of pressure on its foreign operator Royal Dutch Shell; Gazprom will pay $7.45 billion; critics of sale call it first effective nationalization of large foreign oil or gas project in Russia, which this year surpassed Saudi Arabia on oil production; Pres Vladimir V Putin announces deal at Kremlin meeting with executives from Gazprom, Shell and Japanese trading houses Mitsui and Mitsubishi, which also own part of project; says Russia remains open to energy investment.

- Russia's state-controlled natural gas monopoly wrested control of the country's largest foreign investment from Shell on Thursday, taking a majority stake in the Sakhalin-2 project for $7.45 billion in a deal that consolidates the Kremlin's command over national energy resources. The agreement, announced at a Kremlin meeting between President Vladimir V. Putin, executives from OAO Gazprom and Royal Dutch Shell as well as top executives from Japanese shareholders, comes after months of mounting pressure from Russian regulators. Under the deal, Gazprom will pay cash for a 50% stake plus one share in the $22-billion development on the Pacific island of Sakhalin, and Shell, Mitsui & Co. and Mitsubishi Corp. will halve their stakes in the project. That puts Gazprom in the driver's seat of Russia's first liquefied natural gas development, which is poised to be a key supplier to growing markets in Asia and North America. At the Kremlin, Putin said environmental concerns about the project had been essentially resolved. Officials had accused Shell of damaging the fragile environment on the island and had threatened to revoke key licenses. Shell infuriated the government last year when it announced that the cost of the project would double to $22 billion — significantly delaying the point at which Russia sees a profit from the fields because the terms of Shell's original agreement allow the company to recover costs first.

• Downstream news:

• Business/Finance news:

- Royal Dutch Shell's chief executive criticized Washington for spurning the United Nations' Kyoto agreement on global warming, saying U.S. backing for a global regulatory framework would create incentives for oil companies to reduce carbon dioxide emissions."For us as a company, the debate about CO2 is over. We've entered a debate about what we can do about it," Shell CEO Jeroen van der Veer said at the Arab Strategy Forum, which was attended by hundreds of political and business leaders from the Middle East and elsewhere.

- The consortium planning to build the world’s largest wind farm off the Kent coast, today welcomed the Government’s decision to grant consent for its offshore planning applications. The consent gives the go ahead for the offshore sections of the 1,000MW wind farm which, if built, will displace nearly 2 million tonnes of CO2 a year. The wind farm would also generate enough electricity to power 750,000 homes, equivalent to a quarter of Greater London’s households or every home in Kent and East Sussex. The consent for the onshore substation, necessary to connect London Array into the national grid, remains outstanding and will now be subject to a Public Inquiry.

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