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Venezuela settles with oil firms

The Venezuelan government has paid $1.8bn (£900m) in compensation to French, Norwegian and Italian oil firms after it nationalised key oil fields.

The move isolates US oil firm Exxon Mobil in its dispute with the country.

Exxon is seeking $12bn in compensation from Venezuela’s state energy group, PDVSA, after its interests were nationalised last year.

Venezuela has accused the US oil giant of exaggerating the value of the firm’s former investments in the country.

It said that Exxon’s former interests were worth just $1.2bn.

France’s Total, Norway’s Statoil and Italy’s ENI agreed to the settlement after accepting the book price for the assets that PDVSA took over.
(21 February 2008)

Russia’s oil industry threatened by high taxes, maturing fields

Uchenna Izundu, Oil & Gas Journal
High taxes are threatening the future development of Russia’s oil and gas industry as production growth stagnates from mature fields, speakers warned at International Petroleum Week in London.

“There is no clarity until the new government comes into power,” said Tony Considine, TNK-BP downstream executive vice-president.

Russia’s prospective fields in Siberia and offshore in the Arctic require huge investments and pose major development and financial risks.
(20 February 2008)
Suggested by Jeffrey Brown.

BP goes back to petroleum
The shift to renewables has been ditched for a carbon intensive future

Terry Macalister, Guardian
The Armani-style beige suits worn by security staff at BP headquarters in London and introduced under the reign of former boss, Lord (John) Browne, are to be quietly dropped in favour of more traditional grey ones. It is a small change but one dripping with symbolism that the flamboyant days of the “sun king” are definitely over and the company is going back to basics and a bit of no-nonsense austerity.

New chief executive, Tony Hayward, has embarked on a cost-cutting programme that will see the removal of 14,500 jobs and slice £500m off the company’s overheads as part of a wider plan to streamline the business.

The biggest change at the oil major is associated with none of these initiatives: it is the decision to accept that high crude prices of between $60 and $90 per barrel are here to stay, which will affect the whole strategy of BP. This “seismic shift,” as one veteran analyst described it, promises to hasten in an era of higher dividends, more capital expenditure and investments in high-cost areas such as the oil sands of Canada that were previously considered too costly – and environmentally unfriendly.

BP appears to be dropping a central plank of Browne’s strategy, the green promise to go “beyond petroleum”, in favour of going back to petroleum – a move which many believe has riled the former boss. In what some saw as a thinly veiled criticism, Browne argued at a recent conference that some energy groups were “in denial” over the need to clean up their carbon output.
(21 February 2008)

Shell’s Hofmeister urges lawmakers to mandate emissions cap, expand U.S. oil and gas drilling
With oil prices surpassing the $100 mark this week, the spotlight remains on oil companies, their record profits, and how the United States can become more energy independent.

During today’s E&ETV Event Coverage, Shell Oil Co. President John Hofmeister discusses Shell’s “National Dialogue on Energy Security” report, which gives recommendations to policymakers on how to shape the United States’ energy future. Hofmeister also reacts to the new biofuels mandate established in last year’s energy law and explains why he believes the United States should expand production of non-corn biofuels.
(21 February 2008)

Shell says cheap renewable energy still far off

Mark Trevelyan, Reuters
The world faces a doubling of energy demand by 2050 but renewable sources are still too expensive and will take decades to make a big impact, Royal Dutch Shell CEO Jeroen van der Veer said on Thursday.

In a speech on “Shell scenarios for the 21st century,” van der Veer said one of the three hard truths facing the world was a big rise in demand as the global population rose from around six billion to nine billion by mid-century.

He told the EastWest Institute think-tank in Brussels that Shell saw “about 50 percent more demand for energy in the world in the coming 25 years, and a doubling of energy (demand) by 2050.”

The second hard truth was that most renewable energy sources were still far too expensive, even compared with higher prices for oil, gas and coal.
(21 February 2008)