Can things get any worse for BP’s board? Having already lost Sir Tom McKillop, it is again under pressure because of connections with the Royal Bank of Scotland.
Corporate governance advisers Pirc are recommending shareholders vote against Peter Sutherland’s re-election as chairman due to his presence on the RBS board, and in particular on its remuneration committee. That committee approved former RBS chief Sir Fred Goodwin’s controversial £703,000-a-year pension plan.
Sutherland only agreed to stay on until the 2010 AGM when finding a replacement in time for this year’s meeting – which takes place next week – proved difficult.
Uruguay has become one of the first countries to change the terms under which it hopes to attract companies to search for oil in the sediment beneath its waters. So far countries have been reluctant to accept that the tables have turned as the oil price has collapsed. Algeria stuck to its terms, and thus generated less interest than in the past for its round in December. Venezuela is dangling Orinoco contracts in front of companies, but behind the scenes is as ruthless as ever, oil executives say.
One exception is Iraq, which has modified its terms. But it is a special case because there is so much else for oil companies to worry about, including the safety of their staff and infrastructure amid the violence, and the sanctity of any contract they sign given the lack of an oil law.
So Uruguay – better known for beef than oil – is somewhat of a trailblazer. But it’s a trail some analysts expect to become well trodden if the quick rebound the industry hopes for fails to materialise.
Uruguay modifies offshore bidding terms for 2009 (Rigzone)
Iraq eases terms for oil contracts (Financial Times)
On Energy Source today:
State banks help troubled Gazprom with Eni option
Rig counts: no prizes for guessing
Sibir goes to court
Gas: One Qatari project is inaugurated; another is delayed until building costs fall (The National, WSJ)
Energy security: What else is Chavez going to do with his oil if not sell it to the US – drink it? asks Fareed Zakaria (NewsWeek)
Sequestration: Archer Daniels Midland project aims to bury carbon dioxide (LA Times)
Cap and trade: AKA cap-and-auction, cap-and-tax, cap-and-giveaway (Green Inc/NY Times)
Geo-politics: In the post-Machiavellian world, economics, not war, rules – and “Putin intuitively grasps the shift in global affairs”, writes Steve LeVine (BusinessWeek)
Biochar: Under fire from groups that oppose large scale geoengineering projects (CNet)
Corporate news: BG clinches Pure Energy takeover – now has 99.74 per cent of Pure shares (Platts)
Climate change: Huge ice shelf to break from Antarctica (UN Climate Change Conference Copenhagen)
… where the biggest falls have been so far this year:
Source: Baker Hughes
Rig counts (Baker Hughes)
Suncor and Petro-Canada begin oil sands consolidation (FT Energy Source)
By Neil Hume
Sibir Energy is fast shaping up as the worst scandal on record to hit Aim, London’s junior Aim market.
On Tuesday, the company revealed it was suing former directors Henry Cameron and Russian businessman Chalva Tchigirinski, in connection with “unauthorised payments”. The claim currently stands at a mind boggling $328m, although Sibir says that could rise to $400m.
The High Court in London has already granted a worldwide freezing order on Tchigirinski pending a full hearing of Sibir’s claim.
From today’s statement.
Gazprom is in trouble. The Russian gas monopoly is struggling under the weight of the financial crisis, the drop in the rouble and the collapse of oil and gas prices. Its rating was downgraded last week, it has borrowed record sums and it is struggling to slow the decline of its older fields. The situation is a far cry from last year’s boast by Alexei Miller, the CEO, that the company would become the world’s largest by market capitalisation, surpassing $1,000bn; he also predicted oil prices would top $250 this year. But Gazprom has a big, powerful and moneyed friend in the Kremlin for whom the company is a strategic asset in economic and political terms.
Thus Gazprom is expected not to have to delay buying Eni’s 20 per cent share of Gazprom Neft, its oil unit, for $4.2 bn. Gazprom had been given the right to buy the stake when Eni purchased it in 2007 at an auction of assets formerly belonging to Yukos, the company Vladimir Putin dismantled and largely nationalised. So in fact, the stake was Gazprom’s to lose.
It would have been a jaw dropping moment had the gas giant not been able to muster the financing from Russian banks to buy the stake. For Russia, such a negative surprise was clearly unpalatable: Bloomberg reports an Italian official confirming the sale is going ahead, and Vedomosti, the Russian newspaper, reports that state banks will help finance the deal.
Related links from the FT:
Gazprom to buy Eni stake for $4.2bn
Crisis could hit Gazprom’s refinancing aims
Gazprom’s lofty aims
Energy news from elsewhere:
- Eni, Gazprom poised to sign deal (Bloomberg)
- Rio Tinto cuts Australia bauxite output (Reuters)
- Beijing keeps Olympic restrictions on cars after air quality improves (Guardian)
- BA, Air France propose emissions trading for airlines (Bloomberg)
- Mittal to exit Trinidad project with India’s ONGC (Reuters)
- Sinopec chemical plants profitable as prices rebound (Bloomberg)
- Qatar, Exxon delay natural gas project (WSJ)
- Veolia close to deal for Hong Kong Tramways (Reuters)
Energy news from the FT:
- Relentless tide of global hunger engulfs 1bn
Number of undernourished continues to grow
- G8 warns of hunger threat to stability
The world faces a permanent food crisis and global instability, say leaders
- Food assistance soars in US
As US unemployment rate rises, many are forced to seek aid for the first time
- Lex: Food prices
If inflation comes roaring back, food prices will hit people first
- UK ministers urged to act on green investment
CBI calls for an end to environmental rhetoric
- Scrap scarcity hits price of copper
Consumers tap into tight supplies from the mines to replace the loss
- Lex: Uranium
Today’s shake-out could give prudent miners the critical mass for success
- View of the Day: Silver to outperform gold
Strong investment demand compensates for a slump in industrial demand, says Weinberg