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"The Stone Age came to an end not for a lack of stones and the oil age will end, but not for a lack of oil.'' 

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Editorial
*China-Saudi Arabia oil cooperation is in both countries - People´s Daily - Beijing
*Nigeria Seeking Release of Kidnapped Oil Workers - Voice of America
*Oil Sector 'Just As Vulnerable' to Storms - Houston Chronicle
*Rosneft to invest $4 billion in oil refining to end of decade - Novosti
*Cholera scandal of oil-rich Angola - Scotland on Sunday
*Rising Russian state oil giant casts huge regional shadow - Deutsche Presse-Agentur


David Seaton's Energy Links® Editorial - Globalization takes the field In today’s increasingly deregulated world our repertoire of stereotypes, clichés and official narratives is continually being shredded. Every day we are surprised by new competitors, new winners and new losers in a frantic race of unknown destination whose only certainty is its speed. At this moment we live immersed in an interconnected world’s most universal event, the World Cup, so let’s use football as a simple illustration of this phenomena.

Something strange and wonderful seems to have happened to the Spanish national football team. “With Unusual Resolve and a Surge of Power, Spain Advances” was the headline in the New York Times report on the victory over Tunisia.   “Spain, showed great character as it battled back from a goal behind” they continued.  Dominic Fifield wrote in the Guardian, “Spain will clearly take some stopping. Gone is the psychological brittleness of recent finals, with unfamiliar mental strength now allied with the mouth-watering talent this country has long since boasted.”  Disaster prone Spain’s passage through this competition has always been viewed tragically, with “fate”, mysterious flaws in the national psyche or even separatism having taken the blame. David Hershey in the American Sports blog Deadspin wrote, “Torres slammed home the penalty with such venom you might have thought he was trying to blow away all of Spain’s ghosts.”  What has made the difference this year? Globalization finally has. 

Many thought that the unlimited entry of EU players in Spain's first division would harm the national team. Quite the contrary! Nothing in world football is sweeter than playing in the Spanish first division and before Bosman, any good Spanish player practically had his place guaranteed from foreign competition. The World Cup was merely the marketplace where the small quota of foreign players, the Cruyffs, Maradonas and Ronaldos came to the attention of Spanish fans and clubs.  With “job security” in the world’s best league, why should a Spanish player put his legs and reputation at risk outside his club? The market has opened and now Spanish players are in the same precarious position as the globetrotting Dutch, Argentineans and Brazilians... to play in the top Spanish clubs, they had better shine in the World Cup marketplace. Suddenly exposed to the cold winds of globalization the Spanish selection plays with the same cool, competitive professionalism that Spain’s championship winning clubs always have shown. Winners and losers: globalization is kind to those with special abilities; sadly there is no “World Cup” for the office workers, textile workers and the rest of us who already have our own “Bosmans” too.  David Seaton


David Seaton's Energy Links®

China-Saudi Arabia oil cooperation is in both countries - People´s Daily - Beijing
China and Saudi Arabia, to their mutual benefit, will expand energy cooperation, announced Jiang Yu, Foreign Ministry spokeswoman, on June 20th. She said China attaches great importance to international energy cooperation. China has always adhered to the principle of equality in international energy cooperation. It has tried to develop its own and others' particular advantages for mutual benefit and development. Saudi Arabia is rich in oil resources and China has its own advantages in the field of energy. They can benefit each other. Expanding oil cooperation between these two countries definitely serves their interests, Jiang continued. They will promote cooperation by increasing oil trade and collaborating in the fields of oil-storage, oil refinement, petrochemical production and oil trade She also said that like some other countries, China will gradually build a mature oil conservation system to prepare for the future and avoid oil shortages.
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Nigeria Seeking Release of Kidnapped Oil Workers - Voice of America
The Nigerian police says it is doing everything possible for the release of two Philippine oil workers seized by gunmen Tuesday. Armed men in a speedboat kidnapped the oil workers near Nigeria's oil capital Port Harcourt. Police spokesman Haz Iwendi, who confirmed the incident, said the police have intensified efforts for the release of the kidnapped Philippine oil workers. "Two Filipinos were kidnapped offshore by some men when they were on their oil rig," he said. "No group has claimed responsibility yet; we are still waiting for them. Our men are on their trail." Tuesday's abduction was the latest in a string of kidnappings and attacks on the Nigerian oil industry. Ethnic Ijaw militants fighting for control of the region's resources and the release of their detained leaders have forced the closure of oil fields producing about 500,000 barrels a day since February. But the Niger Delta Volunteer Force, a militant group led by Mujahid Dokubo-Asari, said it had suspended its violent campaigns in the delta. Mohammed Powell, who leads the group in the absence of its jailed leader, told VOA it is considering other options to secure the release of Dokubo-Asari. "We are tired of taking hostages and will not do it again. We are not part of it any longer," he said. "We are saying that we will pray till the day God will release him. What we believe as a people is that we have not done anything wrong to the federal government or Nigerians." Five South Korean gas workers taken hostage in the delta earlier this month were freed after a plea by the jailed militant leader in whose name they were abducted. The Niger Delta Volunteer Force's pledge to abstain from further violence is not likely to ease the security problems in the region. Other groups including the newly formed Joint Revolutionary Council have vowed to continue their violent protests for Dokubo-Asari's release. Several communities in the region are equally angry with oil companies and often resort to violence to push their demands. A total of 31 foreign oil workers, including the two Filipinos, have been kidnapped in the Niger Delta since the beginning of this year. All previous 29 captives have been released without harm, after periods of detention from a few days to several weeks.
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Oil Sector 'Just As Vulnerable' to Storms - Houston Chronicle
Despite nearly a year of rebuilding, the Gulf Coast energy industry is likely as much at the mercy of Mother Nature this year as last _ when the region suffered through the most active hurricane season on record, say analysts. "The fact is, we are just as vulnerable _ even more so _ than we were before the hurricanes hit last year," said Fadel Gheit, an energy analyst with Oppenheimer & Co. At risk is an area that accounts for 30 percent of total U.S. crude oil production and 20 percent of total natural gas production. The region's ports receive about half of all oil and gas imports into the country, according to JPMorgan analyst Soozhana Choi. In its short-term energy outlook for June, the Energy Information Administration said storms could shut down up to 35 million barrels of crude oil production and up to 206 billion cubic feet of natural gas production this year, based on the government's current hurricane forecast. The National Oceanic and Atmospheric Administration predicts eight to 10 hurricanes this season, including four to six major storms. The agency first releases its outlook in May, then updates its forecast in August _ just before the Atlantic typically begins to churn out its most violent storms. Last year, NOAA darkened its forecast substantially in August; the same could happen this year, according to a report by the Energy Information Administration. Hurricane Katrina slammed into the Gulf Coast in late August, followed by Hurricane Rita a month later. "If a similar situation occurs in 2006, EIA estimates of shut-in crude oil and natural gas production due to tropical storm activity would be significantly higher," according to the agency report. Tropical Storm Alberto became the first named storm of the 2006 season when it made landfall on Florida's Gulf Coast earlier this month. The season officially began June 1 and runs through November. The industry has yet to recover from last season's turbulence.
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Rosneft to invest $4 billion in oil refining to end of decade - Novosti
Rosneft, a Russian state-run oil company, said Monday it was set to invest $4 billion in oil refining by 2010. "Rosneft is planning to allocate $4 billion to modernize oil refineries," Chief Financial Officer Peter O'Brien told an international investment conference. He said the company had registered high rates of production and that its subsidiary Yuganskneftegaz was expected to be pumping out some 75 million metric tons of oil (551.25 million bbl) by 2010, meaning it would be more efficient not only to export crude but to develop oil-refining activities as well. O'Brien also said Rosneft would increase its natural gas production from the current 13 billion cubic meters to 40 billion cu m by 2010, and was in talks with energy giant Gazprom and other companies to gain access to transportation facilities.
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Cholera scandal of oil-rich Angola - Scotland on Sunday
N A nation whose multibillion-dollar oil boom should arguably make its people rich enough to drink Evian, the water that many are instead forced to drink has fuelled one of the worst cholera epidemics to strike Africa in nearly a decade. The Bengo River, its waters dark with grit, its banks strewn with rubbish, supplies two dozen pumping stations with 1.3 million gallons of water each day, filling 450 tanker trucks that in turn supply 10,000 vendors across Luanda's endless slums. The vendors then fill the jerry cans and bath tubs of the city's slum dwellers, who buy the water to drink and bathe in. Health experts say this is one reason for a cholera outbreak that has made 43,000 Angolans ill and killed more than 1,600 since it began in February. But it is only one of the causes. Cholera typically spreads through contact with contaminated water or sewage, and in Luanda's slums both filthy water and sewage is everywhere. Neighbourhoods here are ringed by mountains of rubbish, often soaked by rivulets of human waste. Only about half of the slum dwellers even have an outdoor toilet. Children dance through sewage-clogged creeks and slide down garbage dumps on sleds made of sheet metal into excrement-fouled puddles. Much of the city has no drainage system. In heavy rains the filthy water rises hip-high in some of the poorest dwellings. One development group has estimated that it would take 22,000 lorries to clear away the rubbish. That was in 1994, when Luanda was home to half the population of 4.5 million it has now. "I have never seen anything like it," said David Weatherill, a water and sanitation expert for Doctors Without Borders, which is leading the response to the epidemic. "You see conditions like this on a smaller scale. But I have never seen it on such a huge scale. It is quite shocking." Angola is in the midst of a boom in oil revenue, its hotels crammed with oil executives and its harbour filled with tankers carrying away the 1.4 million barrels of crude each day. The economy grew by 18% last year. The government racked up a budget surplus of more than $2bn. This year it is expected to take in $16.8bn in revenue, well over twice the $7.5bn it received in 2004. Next year, revenue is expected to rise by a third again, almost all because of oil. Economists say the government simply has more money than it can spend. Yet it seems powerless to address even the basic issues of clean water and sewers that would make such epidemics entirely preventable - a paradox that critics attribute to corruption, incompetence or the hangover of a 27-year civil war that flooded the capital with refugees. Sebastião Veloso, Angola's health minister, said the scope of the problem defied a quick fix. "We just do our best," he said. "The lack of infrastructure is a very complicated administrative problem." Only one in six Luandan households is lucky enough to have running water, and for many of them, it comes from a community standpipe, according to Development Workshop, a non-profit group in Angola. The often contaminated river water from trucks that roam the slums costs up to 12 cents a gallon - a hefty sum in a nation where two-thirds of the people live on less than $2 a day.

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Rising Russian state oil giant casts huge regional shadow - Deutsche Presse-Agentur
Gubkinsky, northern Russia - With the looming emission of billions of shares in Russia"'s Rosneft state oil company, a new energy giant is emerging from the Siberian swamps to bolster the Kremlin. Rosneft"'s fortunes should theoretically also dovetail with growing national clout in energy supply - a possible replay of the Gazprom story, where the stock market value of the state-controlled gas monopoly soared as exports to Europe swelled, making it a frontline player in Russian foreign policy. Tellingly, Rosneft"'s initial public offering first planned for mid-July would have directly preceded the summit of leaders from the Group of Eight (G8) industrial nations scheduled for July 15 to 17 in St Petersburg. President Vladimir Putin will likely use the summit to convey demands for greater concessions - such as direct access to customers in Europe - in return for guaranteed supplies of Russian oil and gas to the EU. He is also expected to stand up to calls to liberalize the Russian energy market. Due to organizational hitches, however, the Rosneft listing may now be delayed for several weeks, industry sources said. Nonetheless, Rosneft is growing "'faster than any other Russian company at the moment,"' says Vice-President Peter O"'Brien, an American IPO expert who was recently hired as the company moved to internationalize its face. With his help, the listing is expected to raise at least 8 billion US dollars. The fly in the ointment is the way Rosneft managed to move from being merely the seventh-ranked Russian oil producer to the second largest in just two years. Today it is hard on the heels of private company Lukoil for the number one spot. In Rosneft"'s northern Russian heartland, officials are loath to discuss the 2004 dismemberment of the Yukos oil company of jailed billionaire Mikhail Khodorkovsky and the acquisition by the state of its prize assets. "'It was an economic war, one side won, the other lost, that"'s all there is to it,"' said an oil worker who did not wish to be named. "'Two years ago we were all talking about this, now it"'s just boring,"' added another. Rosneft"'s staff includes many specialists who worked for Khodorkovsky. The fallen oligarch is now serving an 8-year jail sentence in Siberia for tax fraud after a trial that many view as having been engineered by the Kremlin to crush an ambitious rival. Some 70 per cent of Rosneft"'s output now comes from Yukos"' former main subsidiary Yuganskneftegaz, which was sold off in December 2004 at compulsory auction for 9.3 billion dollars to cover back taxes. Even Putin"'s chief economic adviser at the time, Andrei Illarionov, called the sale to the state through intermediaries the "'scam of the year"'. Unfazed, the enlarged state company is pressing on with plans to boost production of crude by one third to two million barrels a day by the end of the decade. "'We feel 100 million tonnes (a year) by 2010 is a realistic target,"' said O"'Brien. Production in 2005 was 70 million tonnes. Rosneft"'s history presents investors with a dilemma: how wise is it to buy into a company close to authorities that so ruthlessly dismembered Yukos in a highly politicized case? Will this protect investments in future or render them more vulnerable to changes in the line-up and policies of the leadership? For now though, the reappointment this month of the deputy head of Putin"'s administration, Igor Sechin, as chairman of the Rosneft board of directors is expected to bring marked benefits. And reservations about the IPO will likely be eclipsed by the anticipated dividends. Petrodollars continue to swill around Russia as its oil fetches up to 70 dollars a barrel compared to the 27 dollars per barrel calculated into the state budget. This oil and gas muscle became a major issue in international relations. US Vice President Dick Cheney recently accused Russia of using its energy wealth to intimidate other countries. Ukraine, Moldova and Georgia had their gas cut off by their powerful neighbour last winter amid pricing disputes. And as hopes fade for a unification of Russia with Belarus, subsidized energy prices for Minsk are also expected to be hiked in 2007. While there is much speculation about who will replace Putin when he is due to step down in 2008, the Kremlin boss staunchly defends the renationalizations in the oil and gas sector. These included the state"'s purchase of a controlling stake in Gazprom last year. Nor should Europe expect a U-turn in policy that will clear the way for foreign companies to snap up large swathes of the industry, he indicated at a June meeting with foreign news agency heads. "'I would stress that these are our energy systems, Russian money paid for the transport facilities and the (oil and gas-holding) depths of the earth belong to the Russian people,"' he said. But despite growls by energy officials that Moscow is dissatisfied over supply terms to the West and that resources will gradually be turned east, Putin assures Russia will remain a reliable partner. "'For 40 years Russia has supplied energy resources to Europe,"' he told Deutsche Presse-Agentur dpa. "'Not for one day, not for one hour was there a breakdown,"' he added, noting that shortages experienced in many countries in January were caused by Ukrainian pilfering of gas exports to Europe rather than by Russia failing its customers.
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