The 3 Week Diet System

Monday, November 30, 2009

CNPC (Hong Kong) raises $480 million of new capital

By Anette Jönsson | 1 December 2009

Investors flock to the deal believing it is a precursor to asset injections from controlling shareholder PetroChina.

CNPC (Hong Kong) last night raised HK$3.72 billion ($480 million) from a top-up placement that was very well received by investors who viewed the fundraising as the first concrete sign that a long-anticipated asset injection story may be about to unravel.

According to a source, the offering was fully covered within 30 minutes and attracted more than $1 billion of demand, predominantly from long-only funds. Almost 100 investors submitted orders.

CNPC (HK), a Hong Kong-listed red-chip which is active in the exploration and production of crude oil and natural gas in China, Kazakhstan, Oman, Peru, Thailand, Azerbaijan and Indonesia, has been majority-owned by Hong Kong-listed PetroChina since August last year when PetroChina acquired the shares from their mutual Chinese parent, China National Petroleum Corp. At the time, the companies said that the change of the shareholding structure would allow PetroChina and CNPC (HK) to jointly "exploit the the huge and rapidly growing natural gas end-user market in China", with PetroChina focusing on the upstream and midstream supply of gas, and CNPC (HK) being responsible for the distribution to the end-user.

Natural gas as a clean and efficient source of energy has drawn increasing attention and interest from the Chinese government and has become one of the most rapidly growing sectors in China's energy industry. The government is seeking to double the use of natural gas to 5.3% of the country's total energy consumption by 2010.

Since the takeover, it has been expected that CNPC (HK) would buy PetroChina's existing downstream gas distribution assets, and with the company now actually raising money, it isn't too far-fetched to believe such an acquisition is getting closer. CNPC (HK) told investors last night that the proceeds were intended to be used for future acquisitions as well as for working capital and other general corporate purposes.

Another reason why the placement may have attracted such a strong response was that it offered a good opportunity for investors to buy the stock in size. Based on the average daily trading volume in the past three months, the placement accounted for 18.5 days' worth of trading. It also represented about 10% of the issued share capital.

The company offered 450 million shares at a price between HK$8.01 and HK$8.41, which equalled a discount of between 3.4% and 8% versus yesterday's closing price of HK$8.71. The share price has had a strong run this year as oil and gas prices have recovered and in anticipation of the potential asset injection and is currently up about 287% year-to-date. After a 3.7% rally yesterday, it closed only 2.8% below the year high of HK$8.96 that it reached a week-and-a-half ago.

Thus it wasn't too surprising that the placement price was fixed off the top of the range at HK$8.27, resulting in a discount of 5%.

Because this was a top-up placement, the shares on sale were secondary shares (sold by PetroChina). However, PetroChina will subscribe to the same number of new shares at the placement price to ensure the money ends up with CNPC (HK). Although the transaction will result in a slight dilution of PetroChina's holding in CNPC (HK), a top-up placement is the most efficient way for a Hong Kong-listed company to do a follow-on sale. After the two transactions, PetroChina's stake will fall to about 51% from 56% previously.

About 70% of the demand came from Asia, with European investors responsible for the remaining 30%.

The placement, which was arranged by Bank of America Merrill Lynch, was the largest follow-on offering by a Hong Kong-listed company since underground mall operator and developer Renhe Commercial Holdings raised $720 million in mid-July. However, only two-thirds of the Renhe transaction was made up of new shares, meaning that Renhe too raised about $480 million of new capital. The only other Hong Kong follow-on that has been larger this year is China Resources Land's $555 million offering in May. That deal was arranged by Credit Suisse, while UBS led the Renhe trade.

CNPC (HK) currently has 14 oil and gas projects in seven different countries, but continues to develop its gas distribution business. In September it bought a 49% stake in Zhongyou Zhongtai for Rmb615.5 million ($90 million) from its ultimate parent, CNPC, following a tender process. Zhongyou Zhongtai is principally engaged in the construction, operation and management of city gas pipeline networks and ancillary facilities, as well as the development and sale of liquefied petroleum gas and the provision of safety testing, maintenance and emergency repair of city gas transportation and distribution equipment.

© Haymarket Media Limited. All rights reserved.


Stocks to watch: Air NZ, Infratil, Methven, SKC

Tuesday, 1 December 2009, 9:13 am
Article: Businesswire

Stocks to watch: Air NZ, Infratil, Methven, Sky City

Dec. 1 (BusinessWire) – The following stocks may be active on the New Zealand exchange after developments since the close of trading yesterday. All prices are in New Zealand dollars unless specified.

Themes of the day: Stocks weakened on Wall Street, paced by retailers, after disappointing consumer spending over so-called Black Friday. The kiwi dollar weakened amid concern Dubai World is still at risk of default. The kiwi recently traded at 71.40 U.S. cents. The economy still faces significant risks as it climbs out of recession, according to a report today from the New Zealand Institute of Economic Research. Economist Shamubeel Eaqub cited “renewed over-valuation in the housing market, rising unemployment, persistent external imbalances, rising oil prices and eventual withdrawal of monetary and fiscal stimulus."


Korean Builders to Feel Little From Dubai Shock

DECEMBER 01, 2009 08:24

Despite the debt moratorium declared by Dubai World, most Korean brokerages say Korean builders have a positive business outlook for next year.

Daewoo Securities and Hyundai Securities said before the Dubai shock that construction is a promising industry for investment next year, and appear to stick to that opinion despite the Dubai shock.

Shares of Korean construction companies including Hyundai Construction, GS Construction, Samsung C&T Corp. and Samsung Engineering rose more than three percent yesterday, after plummeting for two consecutive days.

Just a few Korean builders have large projects with high risk in progress in Dubai. Chief researcher Park Yeong-do of LIG Investment & Securities said, “The activities of large Korean construction companies in the Middle East mostly involve plant construction rather than real estate development. Therefore, exposure to the Dubai shock is low.”

In addition, other factors are expected to lead to more plant orders in the Middle East for Korean construction companies.

MEED Project, a think tank on construction and economy in the Middle East, said plant orders in six Gulf Cooperation Council nations including Saudi Arabia, the United Arab Emirates, Kuwait and Qatar will exceed 200 trillion won (172 billion U.S. dollars). Of that amount, Korean companies are expected to secure plant orders worth at least 142.1 trillion won (122 billion dollars) next year.

Song Heung-ik, chief researcher at Daewoo Securities, said, “The number of orders for plants for oil refining, gas and petrochemicals will continue to rise primarily because of consistently high oil prices. Second, the number of plants for generating green energy such as electricity, combined cycle power and nuclear energy will increase in riding the global trend of green growth.”

“As long as the price of oil stays at 50 dollars a barrel, Korean construction companies will continue to receive many overseas orders.”

The possibility of higher diversification of overseas orders is another factor backing the optimistic outlook for Korean builders despite the Dubai shock.

For example, projections say Southeast Asian nations that suffered a sharp decline in orders this year will place more orders next year. In addition, large construction projects are expected in Brazil, which will host the 2014 World Cup and 2016 Summer Olympics.

Kang Seung-min of NH Investment and Securities said, “If demand for orders increases in oil-rich Southeast Asian nations from next year, it will help diversify the overseas orders of Korean construction companies.”

Daeshin Securities and LIG even advised investors to buy construction stocks when their prices are revised in the aftermath of the Dubai crisis.


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Newfoundland challenges Churchill Falls hydro deal

Lynn Moore, Canwest News Service

Published: Monday, November 30, 2009

MONTREAL -- Newfoundland and Labrador has formally requested a new deal with Hydro-Quebec on the controversial 1969 Churchill Falls power contract in what could be the opening salvo of a new court challenge.

This time, it is using provisions of Quebec's unique Civil Code to buttress its long-held argument that Quebec has - and wants to continue - shortchanging the economically stressed province on the power agreement.

"The gross inequity of this agreement cannot be denied," Newfoundland Premier Danny Williams said in a statement Monday to the province's House of Assembly.

"For example, last year it is estimated that Hydro-Quebec reaped profits from the Upper Churchill contract of approximately $1.7-billion, while Newfoundland and Labrador received a mere $63-million," Mr. Williams said.

"Power which is bought from our province for a quarter of a cent per kilowatt hour is then resold by Hydro-Quebec for up to 36 times the price they pay for it."

After oil prices soared in the 1970s, adding to the value of hydroelectric power, Newfoundland repeatedly contested the contract before the courts. Although the matter has twice travelled to the Supreme Court of Canada, the 65-year deal, negotiated between the governments of Newfoundland's Joey Smallwood and Quebec's Jean Lesage, remains intact.

On Monday, Mr. Williams told his legislature that "a very legitimate and compelling legal argument that has not yet been tested" forms the basis of the fresh offensive. It revolves around a Civil Code provision requiring parties to a contract to act in good faith in all legal relationships, including the negotiation and ongoing performance of contracts, Mr. Williams said.

Legal opinions from "some of the most eminent and brilliant legal minds in Quebec" support the argument, said Mr. Williams who has strongly denounced the proposed purchase of New Brunswick's provincial utility by Hydro-Quebec.

Changes to Quebec Civil Code in 1994 set the stage for Monday's renewed challenge to the contract, Ed Martin, head of Churchill Falls (Labrador) Corp. and of Crown utility Nalcor Energy, told reporters.

Mr. Martin said he sent a letter to Hydro-Quebec CEO Thierry Vandal requesting that his company renegotiate the pricing terms for the remainder of the contract "to establish a fair and equitable return to both CF(L)Co. and Hydro-Quebec for the future."

The letter, sent Monday, asked Hydro-Quebec to commence negotiations by Jan. 15, 2010.

Hydro-Quebec would not comment on the matter Monday and would not say if it received Martin's letter.

Montreal Gazette


Thames Water chief resigns

By William MacNamara

Published: December 1 2009 02:00 | Last updated: December 1 2009 02:00

David Owens, chief executive of Thames Water, resigned yesterday, less than a week after the water regulator delivered a verdict on five-year pricing that appeared unwelcome to the country's biggest, London-centred, water company.

Thames, privately owned by a Macquarie-led consortium of investors, said in a statement that Mr Owens decided to step down after reaching the "important milestone of receiving Ofwat's final determination".

Last week, Ofwat, regulator of the UK's privatised water sector, set prices for the next five years that were broadly flat and even marginally declining on average after inflation. While the ruling, good news for water bill payers, was not as bad for water companies as many of them suspected, it still put pressure on them to work to the same standards on lower profits and manage the debt load they took on during years of easy credit for utility companies.

Thames had asked for a 3.4 per cent average annual rise in water and sewerage pricing to 2015. But Ofwat decided it would only get a 1.4 per cent rise. Coupled with the regulator's decision to assume a cost of capital for the water companies of 4.5 per cent, this puts Thames under more strain than most peers to deliver satisfactory returns to its shareholders.

Mr Owens, a member of the Macquarie team that took over Thames, liked to point out that Thames was different from other water utilities. Tasked with maintaining a leaking network of pipes hundreds of miles long and buried under busy London streets, it deserved the sort of price hikes it asked for, the company said in the lead-up to the Ofwat determination.

Even before the ruling, Thames officials were suggesting the company would appeal against Ofwat's decision to the UK's Competition Commission, an option for any water utility.

Now the decision will be made under the interim chief executive, Martin Baggs. He is a Thames board member and former managing director of South East Water.

Copyright The Financial Times Limited 2009. You may share using our article tools. Please don't cut articles from and redistribute by email or post to the web.


Cellulosic Ethanol Faces Obstacles

By Pork news source | Monday, November 30, 2009

Several factors continue to hamper advancement of the cellulosic ethanol industry, according to Cole Gustafson, North Dakota State University biofuels economist. Obtaining capital to finance the commercialization of new technologies required for production is the first obstacle says Gustafson.

Problems on Wall Street following the collapse of the financial markets also hold back development of the new biofuel development. In addition, federal loan programs for cellulosic biofuel producers are not tailored to the size and scope of next-generation biofuel plants, according to Gustafson.

On Oct. 29, the U.S. House Committee on Agriculture conducted hearings to evaluate the usefulness of federal loan programs and stimulus money targeted toward cellulosic ethanol. Mascoma, a company at the forefront of cellulosic ethanol development, recounted that it had contacted nearly 200 lenders in an effort to obtain financing, but found only two who would work with it. The company eventually ended up without any federal loan funds due to technical difficulties in the program.

The Coskata Company presented a list of 12 diverse technologies to produce cellulosic biofuel. It argued that a wide range of feedstocks should be considered viable for conversion to biofuel. The company said this would broaden geographic opportunities and reduce market pressure on a single commodity. As it is, the productivity of different feedstock and technology combinations are difficult to discern and create anxiety on the part of lenders searching for production benchmarks.

Several companies were critical of federal loan provisions that were too narrow or favored specific types of technologies. There is a wide array of potential feedstocks being researched for cellulosic ethanol, but most federal loan programs prioritize feedstocks that qualify. This limits the development of alternative technologies.


Wind energy helps boost Australia’s grid

Mon, November 30, 2009

Three new wind projects have helped drive a recent boost to Australia’s electricity grid, which saw 1,582 MW of capacity added in a period of six months.

The completion of four other electricity projects also contributed to the boom, including a coal seam gas plant, two natural gas plants and a coal fired power plant.

The finding was released in the October 2009 listing of the Australian Bureau of Agricultural and Resource Economics’ (ABARE) report, Electricity generation: major development projects, which details electricity generation projects at various stages of development.

The report found that nine of the 18 projects listed as being in an advanced stage used renewable electricity, including eight wind projects and one hydro project.

Wind projects accounted for 733 MW, or 84 per cent of advanced renewable additions.

All eight wind projects are expected to be in operation by 2011.

“The number of wind projects at advanced and less advanced stages of development demonstrates the potential of wind energy to add significant renewable electricity generation capacity to the electricity grid,” said ABARE Deputy Executive Director Terry Sheales.


Suntech vs. Sanyo - The Solar Panel Battle For Japan


Suntech and Sanyo, two leading manufacturers of solar panels, have been beating the corporate drums recently over their plans to increase market share in Japan.

Sanyo last week announced a goal of becoming the top manufacturer in the expanding Japanese solar panel market by 2013 by winning a 40% slice (in megawatts).

Aside from its Japanese roots and reputation for quality, Sanyo is pinning its hopes on its HIT solar panel technology to give it an edge in the local market. The Heterojunction with Intrinsic Thin-layer (HIT) solar cell is a hybrid model that combines a crystalline silicon substrate and an amorphous silicon thin film. According to the company, it offers the world’s highest power generation level per installation area due to superior energy conversion efficiency and temperature characteristics.

On the same day as Sanyo's announcement, Suntech Power Japan Corp, a unit of Suntech Power Holdings Co., announced it will begin selling solar power generation systems for new homes early next year.

Suntech Japan has inked deals with around 10 midsize home builders and will have them install solar power systems when they build custom and ready-built homes. Suntech Power Holdings, based in China, is the world's third largest solar panel manufacturer in terms of production volume. Suntech solar panels are a popular choice in Australia for residential solar power systems.

The coming year is considered to be the Japanese solar market's salad days due to government subsidies and the New Purchase System for Solar Power-Generated Electricity, which started on November 1, 2009. The program is essentially a net feed in tariff; paying generators of electricity from solar power systems a premium rate of approximately 60c Australian per kilowatt hour for surplus electricity fed into the main grid.

According to statistics from SolarBuzz, Japan was the sixth largest country market for solar photovoltaics in 2008. While the non-residential solar panel market in Japan has been growing it still only represents just over 10% of the Japanese domestic PV market.


Iran plans 10 more large nuclear plants

Tehran's declaration that it will expand its nuclear program comes days after a rebuke by the U.N. nuclear watchdog. Experts say Iran lacks the ability or material to build the plants any time soon.

By Borzou Daragahi and Ramin Mostaghim

November 30, 2009

Reporting from Tehran and New York - Two days after the world's atomic energy watchdog rebuked Iran over its nuclear program, the Islamic Republic's Cabinet on Sunday ordered a dramatic expansion of the program that would include 10 more nuclear plants.

If completed, the plan would provide Iran with enough enriched uranium to produce 20,000 megawatts of electricity within six years, President Mahmoud Ahmadinejad said, according to the semiofficial Mehr news agency.

But Iran's stated plans often don't square with its capabilities. The oil- and gas-rich Middle East nation of 70 million would need to overcome big economic and technical hurdles to mount so ambitious an expansion of its nuclear program. Currently, Iran has installed about 8,000 centrifuges, of which only about half are producing reactor-grade uranium.

Experts predicted Iran would have a tough time following through with the plan.

"If they actually mean it, given the pace of their production and installation of working centrifuges, we are looking at an extremely costly 20- or 30-year program, at best," said Gary Sick, a professor of Middle East studies at Columbia University who served on the National Security Council during Iran's 1979 revolution. "Words are easy. Implementation is hard."

The plan calls for 10 plants on the scale of a current, industrial-sized facility in Natanz that holds 50,000 centrifuges.

Ahmad Shirzad, a Tehran nuclear scientist and frequent critic of the government, said Iran had neither the industrial ability to create 500,000 centrifuges nor the basic ingredients to operate them. He characterized the announcement as a "political decision to make an impression" on the international community.

"Viewing the industrial development in Iran for the time being, it is not feasible," he said. "Apart from that, we need lots and lots of raw materials, including uranium, many kinds of alloys and so on to be imported from abroad."

Such items could be very difficult for Iran to procure, given the sanctions in place to prevent it from obtaining so-called dual-use materials, which can be used for peaceful purposes, or to build weapons.

Ahmadinejad said the new facilities would incorporate new, more efficient centrifuges, which Iran has not yet employed.

"New high-capacity centrifuges have been designed by the Islamic Republic of Iran that can carry out the task in fewer numbers," he said. "We will use these new centrifuges as soon as they become operational."

The U.S. and its allies criticized Iran's announcement.

"If true, this would be yet another serious violation of Iran's clear obligations under multiple U.N. Security Council resolutions, and another example of Iran choosing to isolate itself," said White House Press Secretary Robert Gibbs.

British Foreign Secretary David Miliband said that the international community recognizes Iran's right to a civilian nuclear program. "Instead of engaging with us, Iran chooses to provoke and dissemble," he said.

Iran says its nuclear program is for peaceful purposes; the U.S. and its allies fear that Iran is intent on building atomic weapons.

On Friday, the International Atomic Energy Agency's board of governors voted 25-3, with seven abstentions, to condemn Iran's nuclear program. The resolution called on Tehran to halt enrichment, resolve lingering questions about its nuclear activities, open its facilities to further inspection and provide assurances that it is not operating secret nuclear research and development sites.

Iran's parliament issued a statement Sunday asking the government to reduce its cooperation with the IAEA following the censure vote. But Ali Akbar Salehi, head of Iran's Atomic Energy Organization, said the country would not pull out of its treaty obligations, which bar it from pursuing nuclear weapons.

"We pursue our rights and international obligations in equal measures," he said on the sidelines of the Cabinet meeting, according to Mehr.

Iran's assertion that the IAEA censure was politically motivated was bolstered by Egypt, which called the resolution "unbalanced" because it did not address Israel's undeclared nuclear weapons program.

"The resolution did not take into consideration the regional dimension in dealing with the Iranian nuclear dossier, as the resolution should [have] included a clear remark on the importance of dealing with the Israeli nuclear abilities and freeing the Middle East from nuclear weapons," said a statement from Egypt's Foreign Ministry. Cairo abstained from the board of governors' vote.

Uranium enriched to low levels can be used for producing electricity; it must be enriched to much higher levels to provide fuel for a weapon. The 500,000 centrifuges Iran envisions could theoretically produce enough fuel for a bomb every two days.

A U.S.-backed proposal calls on Iran to swap much of its current supply of 5% enriched uranium for 20% enriched fuel rods to operate a Tehran medical research plant. But Iranian officials have not given a definitive response, saying they want a guarantee that they will receive the fuel rods.

Ahmadinejad also said the government would begin studying the possibility of producing its own medical-grade fuel. Iran contends that the world powers are obliged to sell it the medical fuel rods as signatories to the Nuclear Nonproliferation Treaty.

"We treat the entire world with kindness and friendship," Ahmadinejad said. "However, we are not joking around with anyone, and we do not allow the rights of the Iranian nation to be violated even by one iota."

Mostaghim is a special correspondent.

Copyright © 2009, The Los Angeles Times


Russia Remains Committed to Iranian Nuclear Program

November 30, 2009

Russia’s energy minister, quoted by an Iranian news agency, vowed to do everything possible towards the earliest possible completion of the nuclear plant in Bushehr. Earlier this month, Russian experts blamed “technical issues” for delays that will prevent powering up the facility by year’s end as first expected.

The Russian minister, Sergei Shmatko, was quoted as making the statements following talks with Iran’s oil minister in Tehran, expressing his country’s commitment to advancing the Iranian nuclear mission.

Russia continues playing both sides of the fence, while profiting handsomely by furnishing members of the “Evil Axis” with nuclear technology and advanced weaponry, in addition to serving as a member of the United Nations Quartet forum, as well as being among the Western nations releasing a strong condemnatory statement and warning against Tehran, which on Sunday announced defiantly it plans to move ahead with ten additional nuclear facilities, of course in cooperation with Russia.

Israel has during the past year held high-level talks with Russian leaders in the hope of preventing the sale of advanced S-300 anti-aircraft systems and other weaponry to Syria, weapons that are intended for Hizbullah and Hamas, to be used against Israel.

(Yechiel Spira – YWN Israel)


Thermal coal demand driving market, new report claims

30 November 2009

GLOBAL industrialisation and high prices of alternative energy sources have driven demand for thermal coal, which in turn has bolstered the worldwide market for coal mining, according to a new report from BizAcumen detailing the global explosives market.

Explosives such as ammonium nitrate and dynamite are scaling new heights in the mining industry, the report claims. In addition to coal mining, other end-use sectors include metal mining, quarrying operations and industrial minerals.

In the construction industry, growth in infrastructure and non-residential sector is projected to propel consumption of explosives, particularly specialised and high-margin products.

These and other market data and trends are presented in "Explosives: World Market Review" released by BizAcumen Inc.


China coal apparent consumption to exceed 3 billion tonnes

Tuesday, 01 Dec 2009

Statistics issued on November 26th by China National Development and Reform Commission indicated that China raw coal output remained at 2.41 billion tonnes in January to October up by 11.4% YoY and the figure in Oct stood at 273 million tonnes plus the growing imports of coal all along, the apparent consumption of coal is expected to exceed 3 billion tonnes in the year.

China coal output stood at 260 million tonnes in September 5% lower than in October. Even if coal output remained the same as in October in November and December which used to be peak period of coal output, the figure for the whole could still reach 3 billion tonnes. Taking imported coal into account, the apparent consumption of coal will probably stay between 3 billion tonnes and 3.1 billion tonnes.

It's worth noticing that China coal exports dropped 50.6% YoY in the first ten months to 18.9 million tonnes while the imports doubled by 1.7 times to 96.87 million tonnes. Thus the net import volume remained at 77.97 million tonnes compared with the 2.36 million tonnes in the same period of last year.

An expert from China Coal Transport and Distribution Association said it is out of question for China's coal imports to surpass 100 million tonnes. Analysts expect the total exports of coal of the year to be around 23 million tonnes. This way China's net imports volume would reach 87 million tonnes.

According to market insiders the long existed gap between domestic and foreign coal prices remains to be the cause for the reversed situation of coal imports and exports of the year and changes in domestic market pattern the fundamental reason. As known to all, the drastic and deep-going coal mine integration in Shanxi province this year has great curbed coal supply, leading to the largely balanced coal market at home and small-than-abroad coal drop.

Mr Huangteng an expert on coal trade said "As the winter peak season comes, domestic and foreign coal prices are both expected to be on the upside till next April. He expressed that there were signs that the price gap between domestic and foreign coal were dwindling, which may erase the advantages of importing foreign coal next year and in due time, China coal imports would drop.”

(Sourced from

Visit for real time access to China steel news


Iran to invest $750m in 3 gas plants

November 30, 2009

Iran plans to increase its natural gas output by investing about 750 million dollars in three gas refineries.

Alireza Gharibi, managing director of the Iran Gas Engineering and Development Company, says a total of $250 million will be spent to develop both phase two of the Ilam gas refinery, and phase three of the Shahid Hasheminejad gas refinery (Khangiran).

A total of 11.2 million cubic meters (mcm) per day will be added to Iran's output capacity on completion of the two plants, he said.

Gharibi added that a new plant will also be set up at the Parsian gas refinery, at cost of about $500 million, to produce ethane gas.

Iran has the second largest gas reserves after Russia and the third largest petroleum reserves in the world.

(Source: Press TV)


Dubai Crisis Affecting LNG Export to Asia

Senin, 30 November 2009, 11:51 WIB

VIVAnews - The Dubai World crisis may affect the liquid natural gas (LNG) export markets in Japan, Taiwan and South Korea.

Deputy Head of Upstream Oil and Gas Regulator (BP Migas) Hadi Purnomo said the agency prefers setting up evaluation due to the situation.

"We will evaluate how much the Dubai World crisis affect the demand in LPG," he said on Monday, Nov 30, in Jakarta.

However, he said, the decreasing demand has in fact benefited domestic consumers because the LNG can be allocated for the domestic market.

Earlier, the monetary crisis in the United States caused the LNG consumers from Japan, South Korea and Taiwan cut demand due to halted industries.

The similar statement was said by Chief of Standing Committee at the Indonesian Chamber of Commerce, Ali Herman Ibrahim. According to him, the Dubai crisis will lead to lesser energy demand from Indonesia.

In the meantime, coal and mineral sales will only slightly be affected.


UPDATE 1-Iran sees lower Q1 demand for OPEC oil-news agency

Mon Nov 30, 2009 6:51am GMT

TEHRAN, Nov 30 (Reuters) - Demand for OPEC crude in the first quarter of 2010 is expected to fall below the producer group's current output, the semi-official Mehr News Agency quoted a senior Iranian official as saying on Monday.

"Demand in the last quarter of 2009 is about 29.3 million barrels per day (bpd) ... it is expected to fall to 28.1 million bpd in the first quarter of next year," said Mohammad Ali Khatibi, Iran's representative to the Organization of the Petroleum Exporting Countries.

"Global demand for OPEC oil (in the first quarter of 2010) will be lower than current output," Khatibi said, without elaborating.

Khatibi also said output by countries outside the OPEC was expected to increase by 200,000 bpd during the same period.

On Saturday, Khatibi was quoted as saying that there was no need to change OPEC's crude output ceiling because the oil market was in balance. [ID:nSP376169]

The OPEC will meet in Angola on Dec. 22 to decide on its oil production policy. A rise in prices has prompted some voices within OPEC to raise the prospect of an output rise at the December meeting, if the rally continues.

Even though oil has rallied in 2009, it is far below its record high of more than $147 a barrel reached in July 2008. (Reporting by Reza Derakhshi; writing by Fredrik Dahl; Editing by Himani Sarkar)


New projects and peace to determine oil output in Africa

Posted Monday, November 30 2009 at 00:00

African oil output will rise sharply in the coming years if new projects start up as expected and tension continue to ease in heavyweight supplier Nigeria.

The outlook raises the continent’s already high profile on the global market, dangles the prospect of increased development in some of the world’s poorest nations, and promises to intensify a race for control of African reserves.

“Over the medium to long term we’ll see the importance of African oil grow significantly,” said Thomas Pearmain, analyst for IHS Global Insights in London.

“The recent big finds have created a lot of excitement and we’re already seeing majors and national oil companies, including China, compete to lock it up,” he said.

Oil output across the continent is expected to rise 6 per cent by 2011, according to a Reuters poll of analysts, company reports, and government statements, with the bulk coming from sub-Sahara’s top producer Nigeria where a rebel armistice is expected to reduce attacks on infrastructure.

“If the rabbit can be pulled out of the hat in Nigeria, we’ll be looking at a fairly rapid uptick,” said John Marks, director of consultancy Africa Energy in London.

Attacks on the oil industry in Nigeria’s restive Niger Delta, where rebels have complained of unequal distribution of oil wealth, regularly knocked out 700,000 barrels per day of crude production prior to the government’s offer in October of amnesty to fighters who laid down their arms.

Analysts are also looking at ambitious projects in Angola that could add between 0.5 and 1.0 million barrels to the nation’s current 1.8 million barrels of daily output over the next five years.


India's ONGC finds new oil reserve-report

Sun Nov 29, 2009 11:01pm EST

MUMBAI, Nov 30 (Reuters) - India's Oil and Natural Gas Corp (ONGC.BO) has found traces of a new oil reserve in Gujarat in western India that could raise its onshore oil production by 20 percent, the Business Standard reported on Monday, citing anonymous company sources.

The new hydrocarbon structure is likely to produce at least 1 million tonnes per annum (mmtpa) of oil, the paper said.

This is just under half the oil production of 2.2 mmtpa from the company's existing field located in the same area, it said.

"This could be the largest onshore oil find for ONGC in the last one decade. The area has the potential of producing 1 mmtpa oil and can possibly even go up to 2 mmtpa,' the report quoted an unidentified ONGC official as saying.

ONGC officials were not immediately available for comment. (Reporting by Janaki Krishnan & Nidhi Verma; Editing by John Mair) ((, +91-22 66369138; Reuters Messaging: ((if you have a query or comment on this story, send an email to


UPDATE 1-Chevron says restarting El Segundo refinery HCU

Tue Dec 1, 2009 12:48am GMT

HOUSTON, Nov 30 (Reuters) - Chevron Corp (CVX.N) said a 59,500 barrel per day (bpd) hydrocracking complex was restarting on Monday at its 279,000 bpd Los Angeles-area refinery in El Segundo, California, after completing a planned overhaul.

Chevron began the hydrocracking complex overhaul on Oct 14 following a power outage on the unit. The overhaul was scheduled to begin within hours of the outage.

The restart of the hydrocracker could last through Dec 8, according to notices filed California pollution regulators. (Reporting by Erwin Seba, editing by Leslie Gevirtz) ((; +1 713 210 8508; Reuters Messaging: ((For help: Click "Contact Us" in your desk top, click here [HELP] or call 1-800-738-8377 for Reuters Products and 1-888-463-3383 for Thomson products; For client training:; +1 646-223-5546))


Thursday, November 26, 2009

IEA: China growth not seen leading to oil price rally

Thu Nov 26, 2009 12:22am EST

TOKYO (Reuters) - The International Energy Agency (IEA) does not think rapid growth in Chinese oil demand will lead to a rally in crude oil prices next year, the agency's executive director said on Thursday.

That is partly because demand for oil from industrial nations in the Organization for Economic Cooperation and Development (OECD) will fall, Nobuo Tanaka told Reuters in an interview.

"Our projection for supply for next year is fairly well," he said.

"We don't see much concern that an increase (in oil demand) in the non-OECD countries may create a problem for market situation for next year."

The agency's annual World Energy Outlook released earlier this month said if government policies stay as they are, Chinese demand will rise by 3.5 percent annually until 2030.

Chinese oil demand is expected to more than double to 16.3 million barrels per day (bpd) by 2030 from 7.7 million bpd in 2008.

The IEA thinks oil supply and demand next year will be largely in balance, he said.

Next year world oil demand is expected to average 86.2 million bpd, following stronger-than-expected preliminary data in North America and buoyant demand in non-OECD Asia and the Middle East, the IEA has said.

(Reporting by Osamu Tsukimori; Editing by Michael Watson)

© Thomson Reuters 2009 All rights reserved


Nigeria crude exports to hit 6-month high in Jan

Wed Nov 25, 2009 6:34pm GMT

LONDON (Reuters) - Nigeria's crude oil exports are expected to hit a six-month high in January, according to preliminary loading programmes, as respite from attacks on oil facilities allows oil companies to ramp up production.

Nigeria's crude oil output is set to average 2.01 million barrels per day (bpd) in January, up from a revised 2.00 million bpd in December and the highest volume since July, trade sources said on Wednesday.

Nigeria has the capacity to produce more than 3 million bpd of crude oil but militant attacks on oil facilities have reduced production by more than 20 percent, or around 700,000 bpd.

For a FACTBOX on Nigeria's production outages click here

A gun amnesty, which expired on October 4, has brought an end to sabotage attacks, at least for now, boosting Nigeria's oil production potential.

January's export volumes will keep Nigeria's oil output well above its target set by the Organization of the Petroleum Exporting Countries. OPEC has given Nigeria an implied production quota of 1.67 million bpd.

Nigeria's oil minister, Rilwanu Lukman, said on Tuesday Nigeria could produce 500,000 bpd more oil by the end of next year if OPEC decided to increase production levels.

The 15 main Nigerian crude oil streams are set to load 70 full or part-cargoes in January, down from 71 in December.

Oil drops below $77 on slow demand, financial markets

Thu Nov 26, 2009 12:48pm EST

By Ikuko Kurahone

LONDON (Reuters) - Oil fell below $77 on Thursday in line with falls across financial markets and as weak demand for fuel offset potential support from a weak dollar.

Global stock markets fell after Dubai asked creditors of two of its flagship firms for a standstill on debt worth billions of dollars as part of restructuring Dubai World, the conglomerate that spearheaded the emirate's growth.

Oil traders said this was not directly affecting oil prices.

U.S. crude oil futures were $1.79 down at $76.17 a barrel by 1745 GMT. London Brent crude was down $1.42 at $77.02.

The dollar hit a 14-year low against the Japanese yen earlier but failed to push up oil prices, which succumbed to weak fundamentals with inventories swelling in the United States and Asia.

Markets slid, pressuring oil prices, in relatively thin trade ahead of the Thanksgiving holiday in the United States on Thursday, Christopher Bellew with Beche Commodities said.

"Everything is a bit weaker today. No chance of much fund buying with the U.S. on holiday," he said.

Gold eased from a record high hit earlier on Thursday as the dollar moved from its lows, although the currency's recovery may be temporary.

Oil has risen from below $33 in December, but weak demand has kept prices way below its record high of $147 hit in July last year.

Data and a survey from Asia showed oil fundamentals remained slack in many countries.

The head of the International Energy Agency (IEA) said signs of rising Chinese demand for oil may not be enough to offset weak demand in developed nations and trigger a price rally.

Oil refiners in Japan and South Korea continued to run at about 75-80 percent of capacity to curb fuel output to much sluggish demand.

The levels roughly match refinery runs in the United States, where oil inventories have remained much above a year earlier levels due to slack demand as the government data showed on Wednesday.

Singapore's oil product supplies also remained ample.

The New York Mercantile Exchange floor trading is closed on Thursday for the Thanksgiving Day holiday and will have an abbreviated session on Friday. But electronic trading will continue.

(Additional reporting by Jennifer Tan in Singapore; editing by James Jukwey)

© Thomson Reuters 2009 All rights reserved


Wednesday, November 25, 2009

Rosneft posts EBITDA of USD 3.7 bln, crude oil production growth of 4.1% in Q3 2009

On November 25, 2009 Rosneft reported its consolidated financial results under US GAAP for Q3 and 9M 2009.

In Q3 2009 Rosneft’s revenues increased by 19.2% quarter-on-quarter, to USD 13,048 mln. The increase was due to higher crude oil and petroleum product prices, growth of crude oil production volumes and refinery throughput. In 9M 2009 revenues amounted to USD 32,259 mln, a decrease of 44.6% year-on-year. The decrease was primarily attributable to a drop in average crude oil and product prices.

Rosneft’s EBITDA amounted to USD 3,659 mln in Q3 2009, a 2.4% increase quarter-on-quarter. Moderate EBITDA growth in spite of the strong increase in revenues and steady cost control resulted from growth of the export customs duty, mineral extraction tax and transport tariffs, which together increased by USD 2,050 mln quarter-on-quarter while revenues grew by USD 2,101 mln. Continuing RUB appreciation against the USD was another negative factor for Q3 results. EBITDA was USD 9,551 mln in 9M 2009, 44.1% below the level of 9M 2008.

Net income was USD 1,168 mln in Q3 2009, 27.5% lower quarter-on-quarter. The decline was primarily a result of the effective income tax rate growth from 20% to 37% following the continuing nominal appreciation of the RUB against the USD (the rate for Q3 includes the adjustment for the difference between 20% and effective rate of 12% applied in 1H 2009, as the estimated rate for 2009 grew from 12% to 20%). Increased depreciation, depletion and amortization due to the launch of the Vankor field, growth of interest expense due to the decrease in capitalized interests and creation of reserve for the Russian Federal Antimonopoly Service claims were other main factors of decreased net income.

In 9M 2009 Rosneft continued to decrease its net debt. As of the end of September 2009 net debt was USD 18,862 mln, a decrease of USD 2.4 bln compared to December 31, 2008. The decrease reflects strong free cash flow generation which amounted to USD 2.2 bln in 9M 2009.

In Q3 2009 Rosneft’s daily crude oil output (including production by subsidiaries and share in production by affiliates) increased by 4.1%, to 2,214 th. barrels per day (bpd), from 2,127 th. bpd in Q2 2009. The growth was driven by the launch of commercial production at the Vankor field in July 2009, contributing 104 th. bpd during Q3 2009. Crude oil production at Vankor averaged 148 th. bpd in September and reached 160 th. bpd in October. In Q3 2009 Rosneft produced 12.01 mln tonnes of petroleum products, up 3.1% quarter-on-quarter.

In Q3 2009 Rosneft continued its successful implementation of cost optimization measures. Upstream operating expenses were USD 2.62 per barrel compared with USD 2.51 per barrel in Q2 2009. The increase resulted from the real appreciation of the RUB of 4.6% and launch of commercial production at the Vankor field. Per barrel costs at Vankor were higher than Rosneft's average as production volumes were low compared to the target capacity of the project. Rosneft management expects these costs to decrease to a level significantly below the average for the Company’s portfolio as Vankor production continues to grow in the next few quarters. Operating expenses of the Company’s refineries were USD 14.6 per tonne in Q3 2009, a decrease of 6.1% quarter-on-quarter, which resulted from decreased volume of turnaround works and optimization of headcount. General and administrative expenses were USD 348 million, 4.9% lower than in Q2 despite appreciation of the RUB against the USD. The decrease resulted from the reduced expenses related to construction activities at Vankor following the launch of Vankor - Purpe pipeline, as well as from reduction in compensation payments and reversal of bad debt allowance.

Commenting on the results, Rosneft’s President Sergey Bogdanchikov said: «Commercial production launch at the Vankor field in Eastern Siberia, Rosneft’s key investment project, was our greatest achievement in Q3 2009. The field was launched on schedule and is performing above expectations allowing us to confirm with confidence our production target for the year. We are also pleased with our success in maintaining industry low operating and SG&A costs. As of today, Q4 also looks to be a strong quarter and we are on track to exceed our plan on all key financial and operating metrics».

Rosneft’s US GAAP financial statements and Management’s Discussion and Analysis (MD&A) for Q3 and 9M 2009 and a related investor presentation are available on the Company’s website at

Rosneft Information Division
Tel.: +7 (495) 221-31-07
Fax: +7 (495) 411-54-21

November 25, 2009


Gas shortage lingers in cities

08:45, November 25, 2009

Chinese cities are grappling for a second week with the most serious natural gas shortage in nearly a decade, triggered by unusually early winter weather, and the nation's top economic planner is urging suppliers to meet maximum distribution rates to meet the demand.

Energy analysts, while giving various explanations for the squeeze, including low gas prices, an insufficient storage system and a monopolistic market, are split over whether a price adjustment would serve as a viable solution.

The shortfalls began this month when early, heavy snow hit northern China, sending heating demand up and forcing supplies in southern China to be diverted north. The cold spell then hit the south, compounding the demand problem and slowing supplies.

The surging demand for gas has subsequently caused a gas shortage in China's central and eastern regions, and the government is taking emergency measures to tackle the issue, Zhang Guobao, vice minister of the National Development and Reform Commission (NDRC) and director of the energy bureau, said Monday.

"The gas suppliers should try their best to extend the production potential, use storage resources and increase imports to ensure the supply," he said.

An additional 1 billion cubic meters of gas is needed, despite the west-to-east transmission of 17 billion cubic meters of natural gas, Zhang said, adding that tight gas supplies had started to gradually ease across the country. But some say the situation could get worse.

As demand peaks in December and January, daily gas shortages are expected to reach 8 million cubic meters in northern China and up to 6 million cubic meters in the south, China Petroleum Daily, an in-house newspaper of China National Petroleum Cooperation (CNPC), said Tuesday, sending a different message than that of the government.

The gas shortage for buses reached 30,000 cubic meters per day in Zhengzhou, capital city of Henan Province, and sometimes more than a hundred buses could be seen in long lines at gas stations, Zhengzhou's Orient Today reported Monday.

"It took half an hour to wait for a bus recently; normally it's 10 minutes at most," a local man surnamed Ma was quoted by the paper as saying.

The government decided to cut supplies to taxis from Monday to ensure the operation of gas-fueled buses, which

account for nearly a half of 4,300 buses in the city. Zhengzhou Gas Group said the city is facing a shortage of 50 million cubic meters of natural gas this year.

The normal gas supply in downtown Hangzhou, Zhejiang Province, can be maintained until today after it resumed Sunday, local authorities said, though future supply remains uncertain.

In order to ensure household usage, 44 industrial plants were cut off from their gas supply, and six had been limited in consumption by last week, forcing many of them to shut down.

Some cities in central and southern China, including Jiangsu, Shandong and Shanxi, are also facing severe gas shortages this winter.

According to the BP Statistical Review 2009, China's natural gas output in 2008 was 76.1 billion cubic meters, as compared with its consumption of 80.7 billion cubic meters in the same year. It said the country's natural gas consumption has been rising at over 20 percent annually in the past few years.

Gas shortages began to haunt southern cities in 2004.

Dong Xiucheng of the China University of Petroleum attributed the gas shortage to the lack of a gas-reserve mechanism, noting that China doesn't have any major gas storages in case of emergencies.

"Only several major oil suppliers dominate the production and transportation. The gas-supply pipelines are scattered around the nation without necessarily overlapping. Mobilization of resources therefore becomes very difficult," Dong said.

The thinking was echoed by Han Xiaoping, chief executive officer of, a professional energy website. He suggested that a monopolized gas market comprising PetroChina, Sinopec and CNOOC should bear the blame.

"Without competition, these sole players lack inner impetus to invest in exportation and technology development, as the price is controlled by the State," he said. "China is not short of natural gas resources, but it lacks sufficient exploration and utilization."

Change the price?

Xu Kai, a CCTV commentator, suspected that the oil giants were curtailing the market supply to obtain a higher price, but they have denied such accusations and said they are at full capacity.

Daily gas output of PetroChina, the country's largest oil and gas producer, reached 182 million cubic meters from November 1-20, up 22 percent over the same time last year.

Sinopec, China's second-largest oil and gas producer, has beefed up natural gas production and cut its own consumption to meet residential needs amid a national supply shortage, the China Petrochemical News reported Tuesday.

Cao Changqing, head of the pricing department of the NDRC, said that the price of natural gas won't change by the end of this year. He did not elaborate.

Liu Ming, a deputy researcher of world industrial structures at the Chinese Academy of Social Sciences, noted that authorities are focusing on energy conservation, as it keeps on diversifying and increasing energy production, and the pricing mechanism is one of the most significant measures under the circumstances to ensure an energy balance.

"People seem to have gotten used to cheap energy consumption," Liu said. "But they have to understand that the price of natural gas is bound to grow."

Han Xiaoping, the energy expert, however, said that the gas price should not be under the control of the State.

"In an open market with many competitors, the gas price adjusts itself to a level according to market demand," Han said.

China last revamped its gas pricing at the end of 2005, linking the clean fuel with alternative fuels such as coal and crude, but the government has only raised prices twice since.

It remains to be seen whether it will happen again soon.

Source: Global Times


Myanmar ready for gas bonanza

Top story from 25 November 2009, Week 47 Issue 202

The Shwe and Zawtika projects offshore Myanmar are expected to produce over 22 million cubic metres per day of natural gas when they come onstream in 2013.

The forecast was made by state-run Myanmar Oil and Gas Enterprise (MOGE), which is a partner in both projects.

Two blocks are located in the Shwe field in the Bay of Bengal, which is being developed by a consortium led by South Korea’s Daewoo International. The Zawtika block, which is on the other side of Myanmar in Gulf of Martaban, is being developed by Thailand’s PTTEP.

The Shwe blocks are estimated to produce just over 14 mcm per day of gas, whilst the Zawtika block is forecast to yield 8.5 mcm per day.

A maximum of 4.5 mcm per day of gas will be kept for use in Myanmar, according to MOGE, with the rest of the production to be sold to China and Thailand.

The production figures were disclosed at an oil and gas forum in Bangkok last week, which brought together the 10 countries of the Association of Southeast Asian Nations (ASEAN).

The Shwe blocks have proven reserves of about 200 billion cubic metres of gas. Most of these have been bought by China.

China National Petroleum Corp. (CNPC) is about to launch construction of a pipeline to move the gas through Myanmar into southwest China’s Yunnan province.

Zawtika is part of the multiple M-9 concession held by PTTEP, where new drills earlier this year yielded promising results.

PTTEP has not given a final overall reserve figure for the M-9 project, but industry reports suggest the concession could hold as much as 50 bcm of gas. The Thai firm has said it might need to invest up to US$1 billion to exploit M-9 fully.

Myanmar’s gas exports earned the country US$1.2 billion in the first five months of the current financial year, which began in April, the Myanmar Times reported last week.


Statoil awards seismic deal for Mozambique, Tanzania

Top story from 24 November 2009, Week 47 Issue 316

Statoil has awarded Bergen Oilfield Services (BOS) two large frontier seismic surveys offshore East Africa.

BOS announced the award on November 20, describing the work off Mozambique and Tanzania to be “large frontier 3-D surveys.”

BOS’ vice president of marketing and sales, Jan Sovik, said the award was a “strong confirmation of the excellence of BOS and our services … this double award from Statoil reflects our strong reputation of excellent geophysical services.”

The Norwegian seismic contractor said the BOS Arctic, following the completion of work in West Africa, would carry out the work. Before working in West Africa, the ship was in the Gulf of Mexico.

BOS Arctic is working offshore Guinea for Hyperdynamics and, as of November 13, had gathered 1,200 km of seismic. This is being partially processed onshore and completed in Norway. The work began at the end of October and is scheduled to finish in mid-January 2010.

Hyperdynamics CEO, Ray Leonard, described the quality of the data from BOS Arctic as “excellent.”

Statoil has a number of offshore interests in Mozambique and Tanzania. The state-owned Norwegian company has Block 2 in Tanzania, in water depths of 400 metres to 3,000 metres. The first exploration period, which began in 2007, runs for four years and includes a 2-D seismic commitment. The second and third phases require one well per period.

The company said it had acquired 6,200 km of 2-D seismic in the first quarter of 2008 and the processed data was delivered in January. First drilling could occur in 2011.

Statoil also has 90% stakes in Areas 2 and 5 in Mozambique, which have water depths ranging from 300 metres to more than 2,000 metres.

Anadarko Petroleum is set to spud a well on its Windjammer prospect, in Mozambique’s Area 1, in December with the Belford Dolphin drillship.


Nigeria buys helicopters for oil missions

November 26 2009 at 12:36AM

Abuja - Nigeria has agreed to purchase five used Super Puma helicopters from France to assist security forces in the oil-producing Niger Delta and on foreign peacekeeping missions, a government minister said on Wednesday.

Nigeria's cabinet approved the defence ministry's request to purchase the five helicopters from France for 68-million euros.

"The five Super Puma helicopters will be deployed in the areas of air support for Nigerian troops in peacekeeping operations as well as air support for surveillance and reconnaissance in the Niger Delta," Information Minister Dora Akunyili said.

Attacks by militants and criminal gangs in the impoverished Niger Delta have battered Africa's biggest energy industry over the past three years, preventing Nigeria from pumping much above two-thirds of its oil production capacity.

But strikes against oil facilities have subsided after thousands of former gunmen disarmed and accepted President Umaru Yar'Adua's amnesty offer, which expired in early October.

Security experts warn the peace is fragile and that the gunmen may return to violence if they are not quickly retrained and found work.

The Movement for the Emancipation of the Niger Delta, the main militant group behind attacks on the oil industry in recent years, has called for a demilitarisation of the region as the next step but has accused the military of instead rearming.

A military spokesperson last week denied the security forces were building up arms or increasing troop numbers, saying they were simply in the region to maintain law and order. - Reuters


Sinopec, TPG considering joint bid for LyondellBasell

(China Daily/Agencies)

Updated: 2009-11-26 07:58

NEW YORK: China Petroleum & Chemical Corp (Sinopec), the nation's biggest oil refiner, and US buyout firm TPG have weighed a bid for bankrupt chemicals company LyondellBasell Industries AF that could challenge Reliance Industries Ltd's offer of about $12 billion, said two people familiar with the matter.

Sinopec and TPG reviewed LyondellBasell's finances and discussed making a joint bid, said the people, who asked not to be identified because the negotiations are private. It was unclear whether one or both of the parties will proceed with an offer, and the sale process remains fluid, the people said.

A buyer would gain US chemical assets that use natural gas as a raw material, which is cheaper than the oil-based ingredients mainly used in Europe and Asia, said Mark W. Connelly, an analyst at Sterne Agee & Leach Inc in New York. LyondellBasell collapsed less than two years after it was created in a $12.7 billion buyout led by billionaire Len Blavatnik's Access Industries Holdings.

"It's a good company that had a bad balance sheet at the wrong part of the business cycle," Carl Blake, a Washington-based analyst at Gimme Credit LLC, said in a telephone interview. "It was over-leveraged and got caught in a commodity cycle that went to hell in a hand basket."

Bonds of LyondellBasell's Arco Chemical Co unit climbed to an 18-month high on the news. Arco's $225 million of 9.8 percent senior secured bonds due in 2020 rose 2.5 cents to 83.5 cents on the dollar as of 4:23 pm yesterday, the highest since May 21, 2008, after gaining 8.875 cents the previous day, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority.

Any bids for Rotterdam-based LyondellBasell, which filed for bankruptcy in April, may compete against a reorganization plan including a rights offering backstopped by Access, Apollo Management LP and Los Angeles-based Ares Management LLC, the people said. TPG, the Fort Worth, Texas-based buyout firm founded by David Bonderman, made an earlier bid to backstop the offering that was rejected, the people said.

Representatives at TPG, Access and Apollo declined to comment. Sinopec's Beijing-based spokesman Huang Wensheng also declined to comment. Bill Mendel, an Ares spokesman, confirmed the investment firm is part of a group backstopping the rights offering.

LyondellBasell is being advised by Evercore Partners Inc, according to a person familiar with the matter. An Evercore representative declined to comment.

Reliance, the oil refiner and explorer controlled by Indian billionaire Mukesh Ambani, on Nov 21 said it offered an undisclosed amount of cash for a controlling stake in the company. Perella Weinberg Partners is advising Reliance on its bid and JPMorgan Chase & Co is helping arrange financing, according to people familiar with the matter.

Officials at Perella Weinberg and JPMorgan declined to comment. Reliance spokesman Manoj Warrier declined to comment on its advisors or the value of its bid.

LyondellBasell was formed in December 2007 when Basell AF bought Houston-based Lyondell Chemical Co. About 55 percent of sales last year were in North America and 38 percent in Europe.

The company has $7.06 billion in bonds and loans maturing next year and an additional $20 billion due through 2027, data compiled by Bloomberg show. It is asking creditors to forgo about $18 billion of that under the reorganization plan filed with a US court, Somshankar Sinha and Vikash Jain, analysts at CLSA Asia-Pacific Markets, said in a note.


Investors agree to split EnCana

By Christopher Mason in Ottawa

Published: November 26 2009 02:00 | Last updated: November 26 2009 02:00

Shareholders in EnCanayesterday voted to split the Canadian energy group into two publicly traded companies, one focused on natural gas, the other on the Alberta oilsands.

Once the move receives court approval, EnCana will focus exclusively on gas, while oil and refinery assets will be spun off into a separate company, Cenovus Energy, valued at C$21bn (US$19.8bn).

The company had planned the move last year until the world recession saw it halt the proposed split in October, citing uncertainty in the global debt and equity markets.

When the plan was first announced in early 2008, the company's shares were trading above C$85. On Tuesday, it stood at C$55.95.

The move was revived in September when EnCana, one of North America's largest independent energy producers, saw global markets begin to stabilise.

Since its formation in 2002, EnCana has struggled to differentiate its two core assets because of divergent oil and natural gas prices, and differing risks in the two businesses. That struggle has especially hurt its oilsands interests, and has resulted in a share price that underperformed rivals.

The division is designed to boost the market value of EnCana's oilsands assets while forming two definable profiles divided by oil and natural gas.

Critics say the split makes both companies vulnerable to takeover, especially the natural gas assets. Some investors expressed concerns over the prospect of a foreign takeover, though 99 per cent voted for the deal.

Foreign takeovers have long been an issue in Canada, and fears of takeover risks may stem from the fact EnCana emerged as a result of the 2001 split of Canadian Pacific Railway into several companies. One of those, CPR's oil-and-gas unit, became part of the newly formed EnCana the following year.

EnCana estimates the combined value of the two companies could be worth 15 per cent more than if they remained together.

David O'Brien, EnCana chairman, said the split "should over time result in a much better share price for each of the constituent parts . . . And if that is indeed the case, there's no better protection against a takeover than a fully valued share".

Under the plan, owners of each EnCana share will receive one share in each of the two companies. If court approved, the deal is expected to close on Monday and the companies will begin operating a day later.

Cenovus will be headed by Brian Ferguson, EnCana's current chief financial officer. The natural gas assets will be run by Randy Eresman, EnCana chief executive.

Natural gas makes up the bulk of EnCana's output, and Mr Eresman hopes to increase production by as much as 10 per cent annually.

Cenovus has an estimated 40 billion barrels of oil in the Canadian oilsands.

EnCana shares closed up 2.5 per cent at C$57.36 in Toronto.

Copyright The Financial Times Limited 2009. You may share using our article tools. Please don't cut articles from and redistribute by email or post to the web.


Tight rein on prices expected from Ofwat

By William MacNamara

Published: November 26 2009 02:00 | Last updated: November 26 2009 02:00

UK water companies have braced themselves today for a pricing ruling they say could undermine the investment case for the whole sector, which may struggle for years with high fixed costs and stagnant revenues.

Ofwat, the regulator, will today reveal the prices that the UK's 22 water and sewerage companies will charge their customers for water over the period from 2010 to 2015.

The companies had requested price rises to cope with maintenance and expansion. But they were all told in July to expect either lower-than-requested price increases or price declines. For example, Thames Water, the privately owned company that runs London's water infrastructure, asked Ofwat for a 3.9 per rise over the period. It was told to expect a 0.8 per cent decrease instead.

Such discrepancies have meant that the usual tension accompanying Ofwat's five-yearly determination has this year turned into antagonism.

Thames Water is just one of the companies threatening to appeal to the Competition Commission against Ofwat's price determination - made on a company-by-company basis - if today's results are not improved from July.

But Ofwat's stance, an undoubted boon for consumers, is not so draconian that it will damage the UK's water infrastructure, say water executives and sector analysts.

They say that the real damage will be to water companies' debt-heavy capital structure and ability to finance their costs and attract investors.

"Since July," says Phillip Green, chief executive of United Utilities, "I have pleaded with Ofwat to demonstrate more balance in their final determination, so that we can retain the support of the debt and equity markets and invest at the levels we need to invest."

United Utilities Water's gearing (debt to equity) level is 65 per cent. Severn Trent's is 72 per cent.

In the years before the recession the sector took on extraordinarily high debt at favourable terms because of lenders' perception of water as a low-risk industry, underpinned not only by a reliable revenue stream but by rising water prices.

The companies constantly refinance their debt, spending it on the high fixed costs involved in pumping a heavy substance around thousands of miles of deteriorating pipes.

The companies could find that refinancing harder to achieve now that a squeeze on revenues threatens their credit rating.

Among the listed companies, Pennon and Northumbrian are in better financial shape than United Utilities and Severn Trent, says Lakis Athanasiou, water analyst at Evolution Securities.

But even for the better-placed companies, the requisite capital will somehow have to be freed over the next five years.

"There is no particular danger of the companies not being able to fund the capital investment required," says Richard Laiken, a director at Ernst & Young.

"The more interesting question is what return investors can really expect if they get squeezed because the companies continue to fund this required investment."

Copyright The Financial Times Limited 2009. You may share using our article tools. Please don't cut articles from and redistribute by email or post to the web.


UPDATE 2-PGNiG to cooperate with Petrolinvest, may link up

Wed Nov 25, 2009 6:24am EST

WARSAW, Nov 25 (Reuters) - Polish gas monopoly PGNiG (PGNI.WA) and oil venture Petrolinvest (PROL.WA) paved the way for a future link-up on Wednesday and agreed to cooperate on the latter's drilling operations in Kazakhstan.

Petrolinvest, worth $217 million, said state-controlled PGNiG would buy its shares and gain operational control with the possibility of acquiring the venture's key Kazakhstan assets.

PGNiG's deputy chief executive said capital ties with the loss-making company were still a distant prospect.

"We have to examine the deposits on which Petrolinvest operates," Miroslaw Szkaluba told Reuters.

"If Petrolinvest offers us interesting assets to examine, we'll launch joint operations. If we offer money for joint operations and Petrolinvest has trouble adding to the pile, we want to have the possibility of acquiring assets."

Petrolinvest, an oil venture forged by one of Poland's richest men, Ryszard Krauze, made its debut on the Warsaw bourse in 2007 when equity markets were booming and promised to move rapidly to oil production, but has so far failed to deliver.

Shares in the venture jumped more than 13.0 percent on the news, coming back from a 31 percent decline since the start of the year. PGNiG hovered around Tuesday's closing levels.

"This surely ensures Petrolinvest will continue its operations," DI BRE analyst Kamil Kliszcz said. "Petrolinvest seems to be under greater pressure to sign the deal than PGNiG."

"It's hard to say what benefits it should yield for the two companies as we don't know any details on price," he added. "I think it should not negatively impact PGNiG."

The two companies are to hold a joint news conference on Thursday. ($1=2.767 Zlotys) (Reporting by Pawel Bernat and Agnieszka Barteczko; additional reporting and writing by Adrian Krajewski; Editing by David Holmes and Mike Nesbit) ((; +48 22 653 9709; Reuters Messaging:

© Thomson Reuters 2009 All rights reserved


Indian shares up 0.4 pct; Infosys hits new high

Wed Nov 25, 2009 6:16am EST

By Ami Shah
MUMBAI, Nov 25 (Reuters) - Indian shares climbed 0.4
percent to their highest close in more than five weeks on
Wednesday, propelled by energy major Reliance Industries
(RELI.BO) and IT bellwether Infosys (INFY.BO).
Firmer global markets after U.S. Federal Reserve officials
raised their growth estimate for 2010 helped underpin
sentiment. [ID:nN24313828]
However, trading volume was relatively light with fewer
participation from foreign funds and the expiry of monthly
derivatives contracts on Thursday, traders said.
Infosys, India's No. 2 outsourcer, climbed to all-time high
of 2,457.90 rupees, after its chief financial officer told the
Reuters India Summit the company was focused on small
acquisitions to boost growth. [ID:nBNG529184]
The stock closed up 0.3 percent at 2,433.60 rupees.
The 30-share BSE index .BSESN rose 67.87 points to
17,198.95, its highest close since Oct. 20. Seventeen of its
components gained.
"I think market is in a consolidation range as we move
towards expiry," said Jigar Shah, vice-president of equity
sales at Motilal Oswal.
Foreign funds, who have bought shares worth more than $15
billion this year, have been taking profits over the past three
Reliance, which has made an offer for bankrupt chemical
company LyondellBasell [ACCEIN.UL], firmed 0.8 percent to
2,193.75 rupees.
Asia's top oil refiner China Petroleum and Chemical Corp
and U.S. private equity firm TPG [TPG.UL] are not considering a
bid to buy Lyondell, a source close to the situation said.
"It is good if there are no competitors for Reliance's bid
for LyondellBasell," said Prayesh Jain, research analyst with
India Infoline.
The stock, which has the heaviest weight in the BSE index,
also got a boost as it reopened 900 gas stations and neared the
record date on Friday for its 1:1 bonus issue. [ID:nDEL270965]
In the broader market, losers outnumbered gainers in the
ratio of 1.1:1. Volume was low with 372 million shares changing
hands on the Bombay Stock Exchange.
Cigarette and hotel group ITC (ITC.BO) climbed 1.9 percent
to 268.75 rupees on better outlook, dealers said.
Telecom stocks continued their fall with sector leader
Bharti Airtel (BRTI.BO) dropping 0.3 percent and rival Reliance
Communications (RLCM.BO) shedding 1.4 percent.
"Despite a meaningful de-rating of telecom stocks, we have
a cautious sector view as we expect tariff pressures to
continue and the competitive intensity to increase as more new
players with deep pockets enter," HSBC securities said in a
It said faster-than-estimated progress on mobile number
portability clouded the outlook further.
The 50-share NSE index closed up 0.4 percent at
* State oil marketing companies Indian Oil Corp (IOC.BO),
Hindustan Petroleum (HPCL.BO) and Bharat Petroleum (BPCL.BO)
rose 2.6-6.9 percent as oil prices hovered around $76 a barrel.
These companies are forced to sell fuel products at mandated
* Mahindra Satyam (SATY.BO) fell 10.9 percent to 90.55
rupees, after newspapers reported the fraud by former chairman
of Satyam Computers was larger than initially estimated. Satyam
Computers was acquired by Tech Mahindra (TEML.BO) in April.
* State-run hydro power producer NHPC (NHPC.BO) slipped 1.7
percent to 31 rupees, after a senior company official said it
was likely to miss its 2007-2012 capacity addition target by
800 megawatts. [ID:nBMB009149]
* Mahindra Satyam on 33.6 million shares
* Aztec Lifesciences (ASTE.BO) on 12.2 million shares
* Suzlon Energy (SUZL.BO) on 8.9 million shares
* For technical analysis double click on
* India rupee report
* India bond report
* Dollar index falls to lowest since Aug 2008
* Oil rebounds above $76, awaits U.S. data
* Global stocks rise; gold at record high
* U.S. stock index futures signal gains; data eyed
* For closing rates of Indian ADRs
(Editing by Ranjit Gangadharan)
((; +91 22 6636 9246; Reuters
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US mogas demand off 1.6 pct from wk ago-Mastercard

Tue Nov 24, 2009 2:00pm EST

NEW YORK, Nov 24 (Reuters) - U.S. retail gasoline demand slipped 1.6 percent from last week as stormy weather depressed demand in some regions of the country, according to a MasterCard SpendingPulse report released on Tuesday.

The Gulf Coast, New England, and Midwest regions posted the largest decreases, mainly due to weather-related factors, according to Michael McNamara, vice president of research and analysis at MasterCard Advisors.

Gasoline demand averaged 9.076 million barrels per day during the week ending Nov. 20, down 1.6 percent from the previous week, according to the weekly report.

Demand for gasoline was about 1.4 percent lower than during the same period last year.

However, the four-week moving average of U.S. gasoline consumption climbed 1.6 percent year-over-year. Year-to-date, gasoline consumption is up about 0.6 percent from the same period a year ago.

Retail prices for gasoline dipped 2 cents to a national average of $2.62 a gallon last week, 30 percent higher than year-ago levels.

MasterCard Advisors estimates retail gasoline demand based on aggregate sales activity in the MasterCard payments system coupled with estimates for all other payment forms including cash and checks. MasterCard Advisors is a unit of MasterCard Inc (MA.N). (Reporting by Rebekah Kebede) ((; Reuters Messaging:; 646 223 6057;)) ((For help: Click "Contact Us" in your desk top, click here [HELP] or call 1-800-738-8377 for Reuters Products and 1-888-463-3383 for Thomson products; For client training: ; +1 646-223-5546))

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Keppel wins S$165m in deals from Saipem, Petrobras

November 25, 2009, 12.39 pm (Singapore time)

By ANGELA TAN Email this article
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Keppel Offshore & Marine Ltd (Keppel O&M), through Keppel Shipyard Limited (Keppel Shipyard) and Keppel Verolme BV (Keppel Verolme), has secured two contracts worth a total of about $165 million.

The first project, secured by Keppel Shipyard from repeat customer Petrobras Netherlands B.V (PNBV), is for the pre-conversion of P-58, a Floating Production Storage and Offloading (FPSO) vessel for the Campos Basin.

The second project involves the repair and modification of the semisubmersible pipelay vessel, Castoro Sei for Saipem S.p.A (Saipem) by Keppel Verolme.


Venezuela's PDVSA restarts 180,000 bpd Petropiar crude oil upgrader

November 23, 2009

Reuters: Venezuela's PDVSA has restarted its 180,000-barrel-per-day Petropiar crude upgrader, a joint venture with Chevron, and expects full production later this week, a PDVSA vice president said on Monday.

Petropiar, one of four upgraders that processes a tar-like crude found in the Orinoco region, was taken out of service on October 5.

"It has started, on time, and with excellent results," PDVSA's Eulogio Del Pino told Reuters. "On November 25, the naphtha circuit will be completed and at 100% upgrading capacity."

Ten days ago, a problem with a boiler forced a 44,000 bpd production slowdown at PetroAnzoategui, another upgrader in the Orinoco belt that is fully owned by PDVSA.

The company so far has failed to return the 130,000 bpd unit to normal output.


Halliburton: Pemex reductions to hurt 4Q profit

Posted: Nov 24, 2009 08:13 PM

Updated: Nov 24, 2009 08:13 PM


HOUSTON (AP) - Halliburton Co., which provides services for the energy industry, said Tuesday that reduced activity by major Mexican customer Petroleos Mexicanos - Pemex - will drag down fourth-quarter profit by 2 cents per share.

Customers like Pemex are key since Halliburton relies on international business for the bulk of its income. Houston-based Halliburton said state-owned oil company Pemex decided to reduce activity because of low natural gas prices and other constraints.

Pemex said last week its crude production dropped 7.1 percent in the first 10 months of this year amid declining reserves. Mexico's oil production has been falling as reserves dry up. Pemex said it plans to begin producing oil from promising deep-water deposits in the Gulf of Mexico by 2014.

Halliburton shares fell 81 cents to $29.65 in after-hours trading Tuesday after closing at $30.46, up 2 cents on the day.

Copyright 2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


Solar energy still expensive to be adopted for buildings: expert

2009-11-25 16:34:33

JAKARTA, Nov. 25 (Xinhua) -- Solar energy as one of the renewable alternative energies is still expensive to be adopted for buildings, a lighting expert said here on Wednesday.

"The alternative is not yet affordable so there are only few buildings using the energy," said Kaoru Mende, an international lightning expert who is the founder of Lightning Planners Associates Inc. whose works are widely adopted at various offices and shopping centers around the globe, including the National Library of Singapore.

"Just wait for its development so we could have cheap solar energy," he said.

Rob Fletcher, the President Director of Philips Indonesia, said that when balance between cost and benefit matches, the technology could be widely adopted soon.

"Technology evolves and creates innovations to produce efficiency. It will never stops," he said.

Philips Indonesia on Wednesday held an international lighting seminar in the capital city of Jakarta to deliver knowledge about trend and lighting concept for office and shopping mall buildings.

The seminar was attended by government officials, professionals like architects, lighting designers, interior designers, property management consultants, building managers and retail companies.


Etrion, SunPower join hands on Italy solar plants

Posted: 25 Nov 2009

Etrion Corp. and SunPower Corp. will work together to build four solar power plants, totalling 4MW, in the Puglia region of southern Italy. SunPower will design and construct the plants, and provide operations and maintenance services.

Marco Northland, CEO of Etrion, commented, "Solar power generation will play an increasingly vital role in our efforts to build more renewable, clean energy sources. SunPower's experienced approach to solar power plant design and construction will allow us to quickly and reliably complete these important projects."

SunPower is installing proprietary SunPower Tracker technology at the Italian sites. The Tracker follows the sun during the day and delivers up to 25 per cent more energy than fixed-tilt systems, while significantly reducing land use requirements.

Italian bank Centrobanca, is providing 83 per cent of the financing for the project, while an Etrion subsidiary is contributing 17 per cent of anticipated project costs.

"SunPower offers a unique value proposition to power plant developers in terms of technology and bankability. Our proprietary Trackers optimise our clients' return on investment while our solid balance sheet and rigorous contract guarantees give financial institutions confidence," said Mario Riello, sales director, SunPower Europe. "We are very pleased to partner with Etrion to deliver clean, reliable solar power to the rapidly expanding Italian market."

Construction of the first of the four projects is targeted to begin by the end of November 2009. The first electricity sales from the projects under the Italian feed-in-tariff regime are expected during Q3 10.

SunPower has more than 500MW of solar power plants installed or under contract around the world, including Italian power plants such as the 24MW Montalto di Castro plant and a 5MW plant in Tolentino. SunPower's Italian operations are located in Milan and Faenza.

Silicon-air batteries promise infinite she...
Why voltage-aware verifica


CNPC expects to double Qingshen's gas reserves

Shanghai. November 25. INTERFAX-CHINA - China National Petroleum Corp. expects to discover between 200 billion and 300 billion cubic meters of new proven natural gas reserves at its Qingshen Gasfield in Daqing City, Heilongjiang Province, the company announced on Nov. 25.


TPG, Sinopec never considered LyondellBasell bid -source

Wednesday November 25, 2009 12:28:04 AM GMT


HONG KONG, Nov 25 (Reuters) - Asia's top oil refiner China Petroleum and Chemical Corp and U.S. private equity firm TPG have not considered a bid to buy bankrupt chemical company LyondellBasell Industries, said a source close to the situation on Wednesday.

"That's completely incorrect," said the source, commenting on a Bloomberg report that the oil refiner and the U.S. private equity firm had weighed a bid for LyondellBasell.

A spokesman for Sinopec, the publicly listed unit of China Petroleum, denied that his company had ever considered such a bid.

It was not immediately clear whether the Bloomberg report referred to publicly listed Sinopec or its state-owned parent. (Reporting by Alison Lui and George Chen; Editing by Chris Lewis) ((; +852 2843-1649; Reuters Messaging: ((If you have a query or comment on this story, send an email to


Etrion, SunPower join hands on Italy solar plants

Posted: 25 Nov 2009

Etrion Corp. and SunPower Corp. will work together to build four solar power plants, totalling 4MW, in the Puglia region of southern Italy. SunPower will design and construct the plants, and provide operations and maintenance services.

Marco Northland, CEO of Etrion, commented, "Solar power generation will play an increasingly vital role in our efforts to build more renewable, clean energy sources. SunPower's experienced approach to solar power plant design and construction will allow us to quickly and reliably complete these important projects."

SunPower is installing proprietary SunPower Tracker technology at the Italian sites. The Tracker follows the sun during the day and delivers up to 25 per cent more energy than fixed-tilt systems, while significantly reducing land use requirements.

Italian bank Centrobanca, is providing 83 per cent of the financing for the project, while an Etrion subsidiary is contributing 17 per cent of anticipated project costs.

"SunPower offers a unique value proposition to power plant developers in terms of technology and bankability. Our proprietary Trackers optimise our clients' return on investment while our solid balance sheet and rigorous contract guarantees give financial institutions confidence," said Mario Riello, sales director, SunPower Europe. "We are very pleased to partner with Etrion to deliver clean, reliable solar power to the rapidly expanding Italian market."

Construction of the first of the four projects is targeted to begin by the end of November 2009. The first electricity sales from the projects under the Italian feed-in-tariff regime are expected during Q3 10.

SunPower has more than 500MW of solar power plants installed or under contract around the world, including Italian power plants such as the 24MW Montalto di Castro plant and a 5MW plant in Tolentino. SunPower's Italian operations are located in Milan and Faenza.

Silicon-air batteries promise infinite she...
Why voltage-aware verific


Board of Directors accepts 2010 Investment Program, Budget and Cost Optimization (Reduction) Program and considers outlook for 2011–2012 key financial

24.11.2009 13:20

The Board of Directors took notice of the information on the Company’s preliminary operating results in 2009. It was noted that the implementation of the Gazprom Investment Program, Budget and Cost Optimization (Reduction) Program in 2009 was expected to match the level of the approved parameters.

The Board of Directors decided to accept the Gazprom Investment Program, Budget (Financial Plan) and Cost Optimization (Reduction) Program for 2010 and provide these documents to the Russian Federation Government for consideration.

According to the Investment Program, the total amount of investments in 2010 will make up RUB 802.4 billion, capital investments – RUB 663.56 billion, long-term financial investments – RUB 138.84 billion.

The Budget for 2010 provides for the total amount of cash income and revenues at RUB 3.79 trillion; liabilities, expenditures and investments – RUB 3.88 trillion. The amount of financial borrowings will total RUB 90 billion. The Budget surplus will account for RUB 0.5 billion.

The Cost Optimization (Reduction) Program for 2010 provides for the measures aimed at cost optimization (reduction) yielding a cumulative effect of RUB 11.7 billion.

The Gazprom Board of Directors reviewed the outlook for the Company’s 2011–2012 Investment Program, Budget (Financial Plan) and Cost Optimization (Reduction) Program.

Viktor Zubkov, Chairman of the Board of Directors, noted that “undoubtedly, Gazprom will execute its investment programs for 2010, 2011 and 2012 and this will secure reliable fulfillment of the Company’s obligations before consumers both domestically and abroad”.

The 2010 Investment Program was shaped in compliance with the deadlines set for executing the top-priority investment projects of principle importance for development of Gazprom and the Russian Federation in general. The impact of the projects on the Domestic Gas Quotas and on reliable operation of the Unified Gas Supply System was taken into consideration.

Pursuant to the 2010 Investment Program, the prioritized production targets include pre-development of the Bovanenkovo and Shtokman fields. Work will be done to pre-develop the Apt-Albian deposits of the Nyda area of the Medvezhye gas and condensate field, the Zapadno-Pestsovaya area of the Urengoy oil, gas and condensate field, the Yamburg gas and condensate field including the Kharvutinskaya area, as well as the Zapolyarnoye, Urengoy and other fields.

The gas transportation priorities are: construction of the Bovanenkovo – Ukhta gas trunkline system and the Gryazovets – Vyborg, Pochinki – Gryazovets, Zapolyarnoye – Urengoy, Dzhubga – Lazarevskoye – Sochi gas pipelines. A provision is made to allocate funds for the construction of a new Obskaya – Bovanenkovo railroad.

As part of the Investment Program funds are allocated for the Eastern Gas Program execution: in particular, construction of the Sakhalin – Khabarovsk – Vladivostok, CGTU-2 of Nizhne-Kvakchikskoye gas and condensate field – AGDS of Petropavlovsk-Kamchatsky gas trunklines, as well as pre-development of the Kshukskoye and Nizhne-Kvakchikskoye fields.

Investments will also be routed for upgrading the major gas production and transportation facilities, technically re-equipping underground gas storages, constructing and upgrading gas processing facilities, as well as performing design and engineering, geological exploration, production drilling operations in fields.

The 2010 Long-Term Financial Investments Plan provides, inter alia, for the Company’s participation in the Shtokman and Prirazlomnoye fields development and operation, as well as the Nord Stream and South Stream gas pipelines construction. Gazprom's projects in power generation are also provided with funds.

Funding of the projects in the Republic of Vietnam, India's Bay of Bengal, and the Caspian Sea shelf was taken into consideration. In addition, the Company is planning to allocate funds for acquiring a 12.5 per cent stake in Beltransgaz and for settling the accounts related to a 51 per cent stake acquisition in SeverEnergia.