After finally resolving the dispute over Kashagan (a fair result financially, although not a kind one for corporate reputations), Eni was able to move on to happier news today with its announcement of a $50m investment in to solar energy research at MIT.

Italian business leaders have long resented the fact that cloudy Germany has a much better-developed solar power sector than they do, so it is an obvious interest for a company looking for a future beyond its established strength in oil and gas.

This route is becoming a well-trodden path, with all the oil majors including BP and even ExxonMobil investing in R&D for alternative energy. The question one has to ask, though, is whether they will benefit very much from it in the end. History shows that it is hard to realise the full potential of a new business that competes directly against your traditional core activity. Just look at IBM and Xerox.

We have not yet found the Microsoft and Apple of the energy world, but somewhere, they are probably out there.

As Burma’s ruling junta cracks down on protesters, killing nine yesterday, calls to do more to put pressure on the regime in terms of financial sanctions are growing, and putting the spotlight on the role played by Total and Chevron. They are partners in the Yadana natural gas project, which last year produced almost half of Burma’s gas, and is said to deliver up to $400m a year in government revenues.

Total, which leads the project, has engaged extensively with its critics, but this week again rejected the idea of pulling out.

By a quirk of history, France’s foreign minister, Bernard Kouchner, wrote a report on Burma for Total back in 2003. It commissioned him to give an independent view of its involvement when he was a human rights consultant. The report is available at the extensive section of Total’s corporate website detailing the company’s position on Burma.

Chevron, meanwhile, has been keeping a low profile. It acquired its stake somewhat accidentally, when it bought Unocal in 2005. Texaco, later bought by Chevron, pulled out of Burma in 1997. Total seems rather more  accustomed to  dealing with controversial regimes.

Burma’s gas resources - not massive but not insignificant either, as the BP review of energy shows - are certainly a complicating factor in dealing with the regime. Thailand is the biggest buyer of its gas exports, and China and to a lesser extent India have been moving in, too, and their companies are a lot less susceptible to public opinion than Total or Chevron. When it argues that things would be worse if it pulled out, Total may well be right.

Kazakhstan is stepping up the pressure on foreign oil companies, with the parliament approving a bill that would give the state the power to strike out contracts for oil, gas and other resources. Politics in Kazakhstan being what they are, the bill seems certain to become law. (FT stories may require subscription.)

It raises the pressure on Eni and its partners at Kashagan, which are facing an October 22 deadline to settle the dispute over the projects’s costs and the distribution of revenues.

David Thomas of Citigroup, in a recent note, suggested the threat to kick out the Eni-led consortium was hollow.

"While the new law, if passed, would theoretically allow the Kazakh government to cancel the existing Kashagan production sharing agreement, we believe this would be highly unlikely since there are no viable options available to accelerate the technically complex and capitally intensive development of the giant Kashagan field," he wrote.

All the same, the mere possibility, however remote the threat is, will certainly concentrate minds at Eni and its partners.

The Wall Street Journal has a colourful story about MangistauMunaiGaz, or MMG, Kazakhstan’s fifth-largest oil producer. The company is worth $4bn-plus, the story suggests. But with the poltical climate worsening, and MMG’s ownership opaque, it would be a brave western company that took the plunge. The Chinese companies seem more likely bidders.

Meanwhile, the signs from neighbouring Turkmenistan are rather more positive, although it is still early days for most western majors.

Hubris and nemesis department. On Tuesday, I sat in a hall at the Offshore Europe conference hearing Xavier Preel of Total waxing lyrical about the French oil major’s superior project execution and host country relationships; on Wednesday morning, his boss Christophe de Margerie was admitting that Total’s production growth projections have been over-optimistic.

As the FT story explains, it is not all Total’s own fault. Higher oil prices mean more oil goes to Total’s partners in production sharing contracts, which accounts for about half the cut in projected output. And a slowdown from 5 per cent to 4 per cent average annual volume growth during 2006-10 is hardly devastating: Total will still comfortably beat BP and Royal Dutch Shell over that period, and perhaps even ExxonMobil. (FT stories may require subscription.)

And yet, Total’s admission is an important piece of news. It is yet more evidence of the severity challenge facing the oil majors, and shows how difficult it is to buck the trend, however good you may think you are. It is also another reason why there will be a few barrels more missing from forecasts of oil supply out to the end of the decade, and another reason why - barring a global economic downturn - prices are likely to stay high.   

UPDATE: Total has some good documentation and a webcast presentation on its website.

At Offshore Europe in Aberdeen, the biggest oil and gas trade show outside the US, the dominent theme has been the struggle for international oil companies to find a role for themselves in a world where governments and national oil companies control the resources, and services companies very often control the skills and the technology.

Malcolm Brinded, Royal Dutch Shell’s executive director of exploration and production, and Robert Olsen, chairman of ExxonMobil International, came up with very similar answers: the IOCs need to offer the most advanced technology and the most sophisticatred skills, especially in project management, or they are dispensible. As Mr Brinded put it, the oil majors are not needed by resource-rich countries any more, so they have to make themselves wanted.

The most interesting take, though, came from Xavier Preel of Total, who talked about his company’s vision of "a new relationship with governments and national oil companies" based on "mutual understanding and respect". He made it very clear that that as far as Total was concerned, there was no argument over who had the upper hand in that relationship.

It is all a long way from John D Rockefeller. Still, in the case of the recent Shtokman deal with Gazprom, for example, it appears to work. (FT stories require subscription.)

If anyone needed a reminder of the way things are going, Algeria helpfully gave Repsol a slap in the face on Monday. And in remarks the FT reported back in June, its government has made very clear the way it believes the industry is going.

However, one of the crucial issues in Algeria’s decision on the Repsol gas project seems to have been the cost overruns and delays that have hit it. An IOC might have the silkiest diplomatic skills in the world, but if it cannot deliver projects on time and on budget and delivering the returns that its partner expected, it will be in trouble.

Once again, there has been a flurry on the web in several places, some of them unexpected, about a possible BP merger with Shell. The FT has long reported that the idea of a merger was kicked around by BP in 2005, when its management was one of the most respected in the world. (FT story may require subscription.) Then, BP was riding high, and Shell was weakened by the scandal over reserves misreporting that broke in 2004.

Now, the positions are reversed. The logic of merger still applies, however, and so do the arguments against. On the pro side, there would be a lot of duplicated costs that could be saved, and perhaps a way to unlock the hidden value that some analysts have found in Shell and BP. One the con side, there are the terrifying regulatory issues in the dozens of different jurisdictions in which the two countries operate. The management challenge of integrating the two companies would also  be horrendous, and a dangerous distraction from what should be their real focus now: getting their operations right and finding more oil and gas.

But perhaps even more than that, there is the quiestion of personalities. Who would end up running the company created by this supposed "friendly" merger? At BP, Tony Hayward has only just climbed to the top of the greasy pole to become chief executive. At Shell, Jeroen Van der Veer deserves longer to enjoy the rewards of having steered the company into calmer waters, and the board has given him just that. Why on earth would either of them choose to play second fiddle?

Shares in Royal Dutch Shell continued to rise on Friday after climing 2.5 per cent on Thursday, helped by a note from Neil Perry at Morgan Stanley that has been attracting some attention. The argument is that after four years of "relentless" de-rating for the oil super-majors, "the large cap now represents the cheapest access to energy in the world."

That goes for BP and Total, but it is particularly true of Shell, which is sitting on a hidden $120bn in shareholder value, if only someone could find out a way to unlock it, say Mr Perry and his team. If you put sensible valuations on Shell’s downstream businesses such as refining and chemicals, at the current share price investors in the company get 8.4bn barrels of oil equivalent for free.

Well, maybe. If assets appear to be persistently mis-priced, there is generally a reason for it. It is hard to see any of the usual liberators of hidden value, such as private equity or activist investment funds, wanting to walk into the political and operational minefield of the big oil business. A merger between two majors, such as the BP / Shell tie-up kicked around a couple of years ago, would seem similarly likely to founder on the rocks of regulation, as BP concluded at the time.

That’s not to say that financial engineering is pointless. As Morgan Stanley suggests, some smarter management of Shell’s assets and liabilities could improve  its performance. But the fundamental challenge facing the majors - the ever more arduous quest for resources - cannot be magicked away. As this story demonstrates all too clearly.

Chevron, the US’s second largest energy group, is close to admitting it should have known kickbacks were being paid to Saddam Hussein, during Iraq’s oil-for-food programme with the United Nations, Claudio Gatti of Il Sole 24 Ore, the Italian newspaper, reports. For an English version, picked up by the New York Times, go here. Chevron will pay $25m-30m in fines, about how much it earned in half a day’s work last year. But if the settlement with US attorneys goes ahead, it sets a precedent for other major oil companies, almost all of which, were accused in a report by Paul Volcker, former chairman of the Federal Reserves, of having bought Iraqi oil through middlemen who paid kickbacks on their behalf.

In the latest sign of the pressure on the international oil companies, all but one of the foreign majors operating in Venezuela’s Orinoco belt have signed new contacts with the government (AP story in the Houston Chronicle), to begin the process of the state taking control of the project. The Reuters version here.

Chevron, BP, Total, Statoil and even ExxonMobil, which traditionally plays hardball in these cases, have signed Hugo Chavez’s new terms for continuing to operating in the vast heavy oil resource region. Only ConocoPhillips, which has two projects in the area, is still holding out.

Mr Chavez, of course, has hailed the agreements as a victory for his brand of socialism. But for the IOCs, things could be worse. They have still got substantial equity stakes in projects in one of the biggest oil reserves in the world, bigger perhaps even than Saudi Arabia’s. The way things are going these days, they should probably be grateful for small mercies.

The World National Oil Companies Congress has been a relatively diplomatic affair so far, save for one very frank paper, submitted by Helmut Langanger, executive vp of exploration and production for OMV. Mr Langanger said what international oil company executives rarely admit: "IOCs will more and more change from operator to a service provider with pre-agreed reimbursement figures hereby substantially diminishing rates of return. Reduced profitability will lead to IOCs not delivering on major performance indicators, such as annual production growth, 100 per cent reserve replacement rates and moderate finding and development costs. " In fact Mr Langanger has no soothing words for investors in OMV or any other IOC. Perhaps that is why he submitted a paper and then nonetheless ended up sending a rather charming deputy who gave a far more humorous, less pessimistic point of view at the panel discussion.