shell game
The Sneaky, Dirty Tricks of Shell Oil Company
Sightings from The Catbird Seat
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Shell Oil Company
From Wikipedia, the free encyclopedia
Shell Oil Company is the United States-based affiliate of Royal Dutch Shell, a multinational oil company of Anglo Dutch origins, which is amongst the largest private sector energy corporations in the world. Approximately 22,000 Shell employees are based in the U.S. The company's head office is in Houston, Texas.
Shell Oil Company, including its consolidated companies and its share in equity companies, is one of America’s leading oil and natural gas producers, natural gas marketers, gasoline marketers and petrochemical manufacturers.
Until the mid 1980s Shell’s business in the United States was substantially independent with its stock (“Shell Oil”) being traded on the NYSE and with little direct involvement from the Group’s central offices in London and The Hague, in the running of the American business.
In 1984 Shell made a bid to purchase those shares of Shell Oil Company it did not own (around 30%) and despite some opposition from some minority shareholders which led to a court case, Shell succeeded in the buy-out for a sum of $5.7 billion.
Despite the acquisition, however, Shell Oil remained a very independent business. This was partly for complex legal reasons as RoyalDutch/Shell feared that there could be onerous liability problems if a closer control of Shell Oil's affairs was taken by the "parent companies"....
In the 1990s Shell Oil's independence began gradually to be eroded as the "parent companies" took a more hands-on approach in the running of the business....
Shell is the market leader for the supply of gasoline to the motorist through approximately 25,000 Shell-branded gas stations in the US which also serve as Shell's most visible public presence.
Shell Oil Company is a 50/50 partner with the Saudi Arabian government-owned oil company Saudi Aramco in Motiva Enterprises, a refining and marketing joint venture which owns and operates three oil refineries on the Gulf Coast of the United States. It also holds 80% of an exploration firm called Pecten that explores and drills in various offshore locations including the oil basin near Douala, Cameroon in cooperation with the French government-owned Elf Aquitaine.
http://en.wikipedia.org/wiki/Shell_Oil_Company
April 29, 2008
BP and Shell post big profits
in era of record oil prices
By JANE WARDELL, AP Business Writer
BP PLC and Royal Dutch Shell PLC, Europe's two biggest oil producers, posted forecast-busting first-quarter earnings on Tuesday thanks to record crude oil prices that are expected to bolster profits across the industry.
The combined profits of $17 billion reignited calls for a windfall tax on oil profits as consumers struggle to pay for food and fuel.
British Prime Minister Gordon Brown suggested that some of those profits should be reinvested in costly exploration for new oil reserves in the North Sea.
BP posted a 63 percent surge in first-quarter net profit to $7.6 billion (4.9 billion euros), while Shell reported a 25 percent rise, to a record $9.08 billion (5.81 billion euros).
Revenue at BP jumped 44 percent to $89.2 billion (57.1 billion euros), while sales at Shell soared 55 percent to $114 billion (72.95 billion euros).
Last week ConocoPhillips reported a 16 percent rise in net income to $4.14 billion. Like BP and Shell, the third biggest U.S. producer far outpaced industry expectations. More big profits are expected from the biggest two U.S. companies, Exxon Mobil Corp. and Chevron Corp., when they report first-quarter earnings later this week.
Crude oil hit $111.80 per barrel during the quarter, while gas jumped an average of 22 percent. Crude has pushed even higher since, reaching a record $119.93 per-barrel this week.
BP shares jumped 6 percent to 613 pence ($12.18), while Shell rose 4.5 percent to 25.83 euros ($40.39).
The enormous profit reports from European companies coincided with the end of a two-day refinery strike in Britain that shut off 700,000 barrels of oil per day, brought from the North Sea to a BP plant.
Truck drivers staged a protest in London's Park Lane on Tuesday, blaring their horns to protest a 30 percent rise in the price of diesel over the past year. A similar protest took place in Washington, D.C. on Monday, and it wasn't the first.
"The price of fuel is becoming something many families are struggling with," said Sheila Ranger, a spokeswoman for the RAC Foundation, a commuter advocacy group. "This will be the last straw for some motorists."
Shell's Chief Financial Officer Peter Voser said oil companies are not to blame.
"We don't understand the oil price at this stage," he said. "The fundamentals will not justify an oil price as we see it at the moment."
Shell's earnings from oil production rose 52 percent to $5.14 billion (3.3 billion euros), due almost entirely to the price increases. The company said combined production of gas and oil equivalents increased by less than 1 percent to 3.4 million barrels per day, as a 9 percent rise in gas production outweighed a 6 percent fall in oil production.
Stripping out the impact of oil inventories that have risen in value, refining profits would have fallen 20 percent, Shell said.
"It seems that better marketing and trading were able to offset the weak refining environment," analyst Alexandre Weinberg of Petercam.
Shell has invested heavily to improve production after a string of setbacks, including an accounting scandal in 2004. More recently, it has faced attacks on its pipelines in Nigeria and a forced sale of part of its stake in a major project on Russia's Sakhalin Island to a state-run enterprise.
BP's profit follows an even rougher period for the company from production outages, U.S. environmental fines and fraud and the scandal-tinged departure of its chief executive.
Chief Executive Tony Hayward, who took over from John Browne a year ago, has focused on bringing new production and refining capacity on line to improve earnings.
"At last, it appears that BP is beginning to improve its operational performance and this looks set to drive a stronger financial performance in the second half," said Tony Shephard, analyst at Charles Stanley & Co.
BP's closely watched replacement cost profit rose 48 percent to $6.59 billion (4.34 billion euros), compared with $4.44 billion in the first quarter of 2007. The replacement cost figure is viewed by many analysts as the best measure of an oil company's underlying performance because it excludes changes in the value of crude inventories, measuring the amount it would cost to replace assets at current prices.
The company said refining availability improved for the sixth successive quarter.
"BP is still not firing on all cylinders but its operational turnaround looks to be on track with a strong second half recovery in prospect," said Charles Stanley & Co. analyst Tony Shephard.
http://news.yahoo.com/s/ap/20080429/ap_on_bi_ge/earns_oil
January 8, 2008
Shell Sued for Refinery Pollution
Published by Andy Rowell
Several green groups have sued Shell Oil and its affiliates, claiming the oil giant has for years released pollutants from its suburban Houston refinery that are well above state and federal limits.
In their federal lawsuit, the Sierra Club and Environment Texas claim the excess air pollutants, including toxic chemicals benzene and 1,3-butadiene, are a violation of the federal Clean Air Act.
The groups said they sued because they felt the governmental agencies responsible for monitoring Shell Oil — the Texas Commission on Environmental Quality and the U.S. Environmental Protection Agency — have failed to bring the refinery into compliance. The groups allege Shell has committed more than 1,000 violations.
“Shell has not taken the corrective action to keep the volume of emissions from being high. The technology exists to prevent most of these (unauthorized) emissions,” Neil Carman, with the Sierra Club’s Texas chapter, said at a news conference.
Shell not taking corrective action… How many communities around the world have heard that one before?
http://priceofoil.org/2008/01/08/
December 11, 2007
The Power Elite Playbook
Viet Nam - Democratized and Ready to Plunder Part 8
- by Deanna Spingola
It only took three million slaughtered Vietnamese, almost 58,000 Americans, Agent Orange, napalm, the destruction of Viet Nam's infrastructure, billions of American tax dollars, about 30 years of American intervention, and almost 20 years of economic sanctions. Viet Nam is now democratized and safe for corporate plunder.
Are the profits worth it?
Their probable answer might equate to the response that Madeleine Albright gave when asked about the 500,000 children who perished during the U.S. sanctions of Iraq: "We think the price is worth it."
Three major oil companies existed from 1910 to 1914: (1) Rockefeller's Standard Oil with its many veiled subsidiaries; (2) BP (British-Persian Petroleum Company); (3) and Royal Dutch Shell. John D. Rockefeller "resolved to take over control of both the British-Persian Petroleum Company and Royal Dutch Shell."
Standard Oil and BP began merging as early as 1961. Amoco (Standard) merged with BP in 1998. Standard took over BP's leases at Prudhoe Bay giving Standard control over production (suppression) in Alaska. Standard Oil has the U.S. monopoly under the names Exxon/Mobil, Chevron and BP. It is significant that Exxon/Mobil is still appealing the punitive damages resulting from the March 24, 1989 oil spill. They have fought it all the way to the "business-friendly" Supreme Court. It is due to be heard again in the spring of 2008. Twenty percent of the plaintiffs have died since the suit began. Justice Samuel Alito will recuse himself as he owns between $100,000 and $250,000 in Exxon stock....
Despite everything that the Bush oil family has done, Standard is not in Iraq yet - apparently the "insurgents" are still fighting it. Now we know how the enemies are targeted....
On February 24, 1907, the Dutch merged their very successful Koninklijke Nederlandsche Maatschappij tot Exploitatie van Petroleum-bronnen in NederlandschIndië (Royal Dutch Company for Exploration of Petroleum sources in the Netherlands Indies) with the Shell Transport and Trading Company, a British concern, to form Royal Dutch Shell.
On June 24, 1911, the very competitive Royal Dutch Shell purchased the last independent oil producer - The Dordtsche Petroleum Mij giving Shell domination of the oil industry in Indonesia....
The Duri and Minas oil fields, located in the central Sumatran basin, were discovered just prior to World War II by Caltex, a joint venture between the American companies Chevron and Texaco (Standard Oil). Production did not begin until the 1950s. By 1963 the Duri and Minas oil fields accounted for 50 percent of Indonesia's oil production.
Things changed - Indonesia exercised greater control over its oil resources during the 1950s and 1960s by escalating the operations of government-owned oil companies. They also introduced a new contract - the Production Sharing Contract (PSC) which gave Indonesia more of the profits after the foreign oil companies recouped their exploration costs. However, oil company fascists frown upon such things. As a consequence, resource-rich Indonesia has been plagued by violence and political corruption.
"Indonesia had proven oil reserves in 1990 equal to 5.14 billion barrels, with probable reserves of an additional 5.79 billion barrels." Throughout the area of the South China Sea archipelago, as of 1993 "there were sixty known basins with oil potential; only thirty-six basins had been explored and only fourteen were producing. The majority of unexplored areas were more than 200 meters beneath the surface of the sea."
Imperialist France, encouraged by Royal Dutch Shell's early oil discoveries in Indonesia, hoped to find oil in Indochina and the many islands in the South China Sea including the Spratly and Paracel Islands. After extensive geographical mapping, France's Service des Mines, headquartered in Hanoi, found hydrocarbon seepages in a number of sandstone and limestone formations as early as 1920 in the Red River Valley, 75 miles northwest of Hanoi.
In approximately 1935, a distinct petroleum odor emanated from the vicinity of Route 9, Viet Nam's principle east-west road at about the 17th parallel. Coincidently, this is the very same route that was so heavily guarded by the American-managed South Viet Nam government during America's war in Viet Nam. Five wells were drilled without finding "exploitable deposits" so the operation was abandoned.
While Southeast Asia was still under France's ruling thumb, oil-hungry Japan invaded, occupied, and organized two drilling operations during World War II - one in southern Laos in 1944 and the other by the city of Qui Nhon on the South Vietnamese coast which included offshore drilling from pontoons. The Japanese, like other imperialists, occupied the archipelago to seize its rich natural resources. Drilling ceased in 1945, especially after the bombing of non-military targets in Hiroshima and Nagasaki which sent a very clear message.
In 1954, the Borneo (Kalimantan) oil fields were opened. Shell Oil had been doing some exploratory drilling in Tunisia, Algeria, Nigeria, Trinidad and offshore in British Borneo between 1945 and 1955.
The Power Elite organized and control both The Council on Foreign Relations (CFR) and the United Nations. They use the combined talents and resources of both organizations to identify, evaluate and measure the world's resources, including prime real estate, with the objective of confiscating, privatizing, manipulating, and suppressing them in order to control the masses and attain ever increasing power and wealth. The oil monopolist Rockefeller family purchased the land that the United Nations sits on....
On July 3, 1973 fifteen companies united to form seven consortiums and submitted bids to the Republic of Viet Nam (South Viet Nam). Pecten Viet Nam (80% of Pecten is owned by a subsidiary of Shell Oil Company, which itself is wholly owned by Royal Dutch Shell - third-largest corporation in the world by revenues after ExxonMobil and Wal-Mart) joined with Cities Service, Mobil (now ExxonMobil), ESSO (Standard Oil) and Sunningdale (a group of Canadian firms) were awarded exploration rights on various blocks of Vietnam's continental shelf.
However, the greatest potential for vast oil resources was in deeper waters - in the northern part of the Brunei-Saigon Basin. Three major oil companies - Cities Service, Mobil and ESSO obtained rights in those deeper waters. The initial arrangement between the oil companies and the government was the concession system which allowed the oil company to explore and produce petroleum in a specific area, determined by the state. The company paid the "host country compulsory taxes" at a fixed rate. The Saigon Administration had this concession system arrangement, which obviously favored the oil companies.
The companies were required to begin exploration within three months and to start drilling the first well within a two year period of time. All the companies began their seismic studies immediately. However, only Pecten and Mobil began their drilling process before everything shut down in April 1975, ESSO and Sunningdale were to begin operations in the summer. "The first well was begun by Pecten on August 15, 1974, less than one year after the contract signing."
By March 1975, significant progress had been made by Pecten. Mobil had made encouraging discoveries. By April 1975, everything stopped - due to the deteriorating military situation. Rigs were removed and personnel left.
During a 1995 BBC TV documentary about the oil industry, the president of one of Standard Oil's spin-off companies said: "It was quite a coincidence that we finished our offshore oil survey on the very last day of the war, just as the last helicopter was leaving the roof of the embassy in Saigon."
Oil companies from Norway, Britain, Holland, Russia, Germany and Australia won bids and started in their allotted areas. Interestingly, none of them hit oil. In contrast, Standard Oil's allotted area has vast oil reserves.
I guess it pays to have the Pentagon and the Department of Defense in your pocket.
Project Magnet and their "undersea seismic research appears to have paid off." Since the survey was conducted by the Navy, Standard Oil wasn't out any money - just the taxpayers!
www.conspiracyarchive.com/Commentary/Power_Elite_8.htm#at_11
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December 6, 1996
ENRON and Shell Win Bid in
Capitalization of YPFB's
Transportation Segment
LA PAZ, BOLIVIA – Enron Development Corp. and Shell International Gas Ltd. announced today that the government of Bolivia has named the companies the successful capitalizing company for the transportation segment of the state oil and gas company, Yacimientos Petroliferos...
Business Wire
~ ~ ~
March 30, 1998
The following is an excerpt from a 10-K SEC Filing, filed by TESORO PETROLEUM CORP /NEW/ on 3/30/1998:
ACCESS TO NEW MARKETS
A lack of market access has constrained natural gas production in Bolivia. With little internal gas demand, all of the Company's Bolivian natural gas production is sold under contract to the Bolivian government for export to Argentina.
Major developments in South America indicate that new markets will open for the Company's production. Construction of a new 1,900-mile pipeline that will link Bolivia's extensive gas reserves with markets in Brazil commenced in 1997 and is expected to be operational in early 1999.
The owners of the new pipeline include Petrobras (the Brazilian state oil company), other Brazilian investors, Enron Corp., Shell International Gas Ltd., British Gas PLC, El Paso Energy Corp., BHP, and Bolivian pension funds. When completed, the new pipeline will have a capacity of approximately 1 billion cubic feet ("Bcf") per day.
For more, see...
Vultures Up to their Necks in Tesoro Petroleum
December 11, 2007
Published by Andy Rowell in Big Oil Profits
Big oil’s timing is always, as ever, impeccable. Just stop and think for a moment. It’s the biggest climate meeting in a decade and you would think that big oil companies would be tripping over themselves to be seen to be green…
However, last week came the news that BP was investing in dirty oil sands and this week comes the news that Shell has quietly shed most of its solar power operations.
The Guardian points to a “small announcement from Environ Energy Global of Singapore” that reveals “that it had bought Shell’s photovoltaic operations in India and Sri Lanka, with more than 260 staff and 28 offices, for an undisclosed sum.”
The sell-off, to be followed by similar ones in the Philippines and Indonesia, comes after another major disposal executed in a low-key way last year, when Shell hived off its solar module production business. The division, with 600 staff and manufacturing plants in the US, Canada and Germany, went to Munich-based SolarWorld. Shell has however formed a manufacturing link, with Saint-Gobain, and promised to build one plant in Germany.
The Anglo-Dutch oil group confirmed yesterday that it had pulled out of its rural business in India and Sri Lanka, saying it was not making enough money.
“It was not bringing in any profit for us there so we transferred it to another operator. The buyer will be able to take it to the next level,” said a spokeswoman at Shell headquarters in London.
Pathetic is the word that comes to mind, especially given the fact that Shell is so awash with cash at the moment.
http://priceofoil.org/2007/12/11/shell-sells-solar-businesses/
December 11, 2007
Shell sets up lab in Hawaii
to research algae as biofuel
Associated Press
AMSTERDAM, Netherlands - Royal Dutch Shell PLC said Tuesday it will build a facility in Hawaii to grow and test algae for its potential as a biofuel.
Shell is Europe's largest oil company, posting $6.92 billion in net profit in the third quarter. A Shell spokeswoman in London declined to say how much money the investment represented.
"This is a 2.5 hectare (6 acre) demonstration project, and it will take up to two years to complete," Shell spokeswoman Olga Gorodilina said of the project. Whether it proceeds further "will depend on the results," she said.
Like corn, sugar cane, palm oil, soya and various kinds of grasses, algae has long been considered a candidate crop for furnishing vegetable oils useable as a replacement for diesel, reducing greenhouse gas emissions.
Amid current worries over global warming, scientists and entrepreneurs are seriously re-evaluating alternatives fuels.
Shell competitor Chevron Corp. and the U.S. Department of Energy's National Renewable Energy Laboratory announced a similar project in October.
"Construction of the demonstration facility on the Kona coast of Hawaii Island will begin immediately," Shell said in a statement.
"Algae hold great promise because they grow very rapidly, are rich in vegetable oil and can be cultivated in ponds of sea water, minimizing the use of fertile land and fresh water."
Shell will form a majority-owned joint venture to build the project with Delaware-based Biopetroleum Inc., which has expertise in growing algae....
If it works as hoped, future algae farms would be located near traditional fossil fuel-based power plants, and siphon off some of their carbon dioxide to help the algae grow and reduce overall emissions.
If tests are successful, the next step would be the construction of a 100 hectare (250 acre) project to test commercial viability, Gorodilina said.
A full-scale commercial production facility would occupy 20,000 hectares (50,000 acres), but she could not say when that might be built.
"Algae have great potential as a sustainable feedstock for production of diesel-type fuels with a very small CO2 footprint," said Graeme Sweeney, a Shell executive overseeing the project, in a statement. "This demonstration will be an important test of the technology and, critically, of commercial viability."
www.siliconvalley.com/greenenergy/ci_7691880?nclick_check=1
July 23, 2007
Polar bears block
Arctic oil drilling
by Terry Macalister, The Guardian
Shell has been forced to halt plans to start drilling in the Arctic by a court challenge from indigenous Alaskans and green groups who claim that polar bears and whales would be put at serious risk.
The ban by the US court of appeal pending a hearing on the issue came as Shell and its new partner Gazprom came under renewed attack for its activities off Sakhalin Island in Russia with a panel of experts from the World Conservation Union urging the operators to do more to protect the western grey whales that feed in the area.
Shell was given permission by the US Minerals Management Service in February to undertake exploratory drilling in the Beaufort Sea but the North Slope Borough, an alliance of conservation and local ethnic groups, argue the go-ahead was given without an appropriate review of the damage that could be done.
"Polar bears are already threatened by global warming," said Brendan Cummings, from the Center for Biological Diversity, one of the petitioners. "Opening up some of their important habitat in the United States to oil drilling and development would push them ever further down the path to extinction."
"This is a great relief to the people of the North Slope," said Faith Gemmill, a member of Resisting Environmental Destruction on Indigenous Lands, another of the critics who have halted Shell — at least until a legal hearing in San Francisco on August 14.
The groups question whether it would be possible to clear up any sizeable crude oil spills in the freezing waters of north Alaska, which are home to bowhead and beluga whales.
But Shell says it is confident that it can reassure the court — and its critics — that it should be allowed to proceed with plans to drill up to 12 exploration wells under a number of licences obtained in the Beaufort Sea and other Arctic areas, including Flaxman Island, north-west of the Arctic National Wildlife Refuge. Oil companies have been banned from drilling in the refuge although president George Bush has continually raised the possibility that it will be opened up to them.
A Shell spokesman, Curtis Smith, confirmed that the court has asked for more information. "We will comply with the court order and continue to welcome discussions with the North Slope communities. Alaska is a long-term investment for Shell," he said.
The Sakhalin Energy company, of which Shell is a key member, has rejected as "not technically feasible" a request from the World Conservation Union's Western Gray Whale Advisory Panel to adopt stricter criteria for the management of noise to avoid disrupting the endangered species as it migrates between eastern Russia and southern China.
In return the conservationists said: "The panel finds Sakhalin Energy's apparent decision to reject the noise criteria proposed in April for the 2007 season extremely disappointing and potentially unsafe for the western grey whale population: it has received no new information from the company to justify its decision."
Sakhalin Energy said: "So far, in some 10 years of operations near the western grey whale feeding grounds, no discernable impacts have been observed in the whales as a result of the Sakhalin II activities and the population has actually increased in this period."
http://www.seaflow.org/article.php?id=668
January 22, 2007
Posted by Joe Klein
The effort to slime Barack Obama has begun in the slimiest possible way. I received the following from an outraged reader, who had received it from a friend:
> > > Probable U. S. presidential candidate, Barack Hussein Obama was born in Honolulu, Hawaii, to Barack Hussein Obama, Sr., a black Muslim from Nyangoma-Kogel, Kenya and Ann Dunham, a white atheist from Wichita, Kansas. Obama's parents met at the University of Hawaii.
> > > When Obama was two years old, his parents divorced. His father returned to Kenya. His mother then married Lolo Soetoro, a radical Muslim from Indonesia. When Obama was 6 years old, the family relocated to Indonesia. Obama attended a Muslim school in Jakarta. He also spent two years in a Catholic school.
> > > Obama takes great care to conceal the fact that he is a Muslim. He is quick to point out that, He was once a Muslim, but that he also attended Catholic school.
> > > Obama's political handlers are attempting to make it appear that Obama's introduction to Islam came via his father, and that this influence was temporary at best. In reality, the senior Obama returned to Kenya soon after the divorce, and never again had any direct influence over his son's education. Lolo Soetoro, the second husband of Obama's mother, Ann Dunham, introduced his stepson to Islam. Osama was enrolled in a Wahabi school in Jakarta. Wahabism is the radical teaching that is followed by the Muslim terrorists who are now waging Jihad against the western world.
> > > Since it is politically expedient to be a Christian when seeking major public office in the United States, Barack Hussein Obama has joined the United Church of Christ in an attempt to downplay his Muslim background.
> > > Let us all remain alert concerning Obama's expected presidential candidacy.
Now, this is nonsense of course. Obama's stepfather was not a Muslim extremist (among other things, he worked for Shell Oil). Obama attended public school for two years in Indonesia, in addition to the two years he spent in catholic schools--although, as Obama's staff points out, Indonesia is a Muslim country, so the public schools undoubtedly reflect the dominant relgious culture.
The notion that the Obama's school was a Wahabi madrasa is laughable, given the moderate form of Islam practiced in Indonesia, especially in those days. I should add: that Obama actually spent four years attending local public and Catholic schools in a third world country--as opposed to the U.S. embassy school--should be considered a major advantage for a prospective American President.
Of course, you have to expect this sort of garbage to percolate through the internet. But, as Howard Kurtz points out today, Fox news actually "reported" this--based on spew from Insight, the Washinton Times Magazine. Another case of, "We report, you decide to get sick."
I'd say that Fox owes Obama a full-throated, oft-broadcast apology, delivered by the network's flagship anchor, Brit Hume.
http://www.time-blog.com/swampland/2007/01/disgusting.html
December 14, 2006
5 oil and gas companies
to pay royalties
By H. Josef Hebert, Associated Press Writer
WASHINGTON --Five oil and gas companies, including Shell, ConocoPhillips and BP, have agreed to pay royalties on future production under flawed drilling leases in the Gulf of Mexico, the government said Thursday.
The companies are among 59 energy producers that hold the leases at issue from 1998 and 1999. Because of a government mistake, the leaseholders have avoided royalty payments on oil and gas taken from federal waters. The leases omitted language requiring royalties when prices reached a certain level.
The agreements with the five companies are "a step in the right direction" and may lead others to find a way to rework the flawed leases, said the Interior Department's assistant secretary, Stephen Allred.
Some members of Congress have estimated that the royalty exemptions have cost the government $2 billion. Allred put the amount at "somewhat less than $900 million."
Congressional auditors have put the total government loss for past and potential future production under the leases as high as $10 billion.
The companies that reached agreement to begin paying royalties as of this past Oct. 1 are Shell Oil Co., BP PLC, ConocoPhillips Co., Marathon Oil Co. and Walter Oil & Gas Corp.
More than 1,040 of the leases were issued and about 570 are actively held by 59 companies, according to the Minerals Management Service, the agency that manages the leasing program. The companies that settled hold all or parts of 131 of the flawed leases.
"They're significant players," Allred told reporters.
He said other major leaseholders have refused to rework the deals and that some have refused even to discuss them.
Allred also acknowledged that the agreements Thursday deal only with royalties from future production and not oil and gas already taken.
"We do not believe that we have any ability to unilaterally change a contract," he said, explaining why the department is not seeking to recover royalties already lost from production.
The refusal of most of the companies to even discuss ways to correct the error in the 1998-99 leases has produced a political firestorm in Congress.
Both Democrats and Republicans have threatened to bar companies from future Gulf of Mexico drilling leases unless they agree to renegotiate the flawed leases.
Speaker-to-be Nancy Pelosi, D-Calif., said on Thursday that resolving the matter will be a priority in the House's first 100 legislative hours after Democrats take control in January.
Allred, however, said banning companies from future leases if they do not rework the flawed ones would lead to legal fights and significantly could reduce domestic oil and gas production.
"Our fear is that our program would shut down" if companies were banned from future lease sales, Allred said.
Reps. Henry Waxman, D-Calif., incoming chairman of the House Government Reform Committee, and GOP Rep. Tom Davis of Virginia, the current chairman, asked Attorney General Alberto Gonzales on Thursday to review the Interior Department's claim it cannot legally recover past royalty losses.
They cited a private law firm's analysis that argued the government has "legal recourse to immediately seek recovery of lost taxpayer revenue" from past production under the defective leases.
"It appears that the assertions by MMS that there are no available remedies may
be incorrect," Waxman and Davis said.
March 31, 2002
THE PAPER TALE
Oil firms claimed not to know how
much money they made in Hawaii.
Their records say it was a bundle.
By Tim Ruel, Star-Bulletin
Like any business in Hawaii, wholesaler Shell Oil Co. kept detailed reports of its financial results, even breaking down revenues, expenses and pre-tax income by gas station.
For example, in 1989, one Aiea Shell station posted $285,368 in revenue and $183,457 in income, while a nearby station generated $417,475 in revenue and $298,465 in income, according to Shell's confidential service station performance reports.
The reports weren't perfect, but they were useful to Shell. "It would be a good guide, or at least a tool, for determining whether to make capital investments at a site or not," Shell executive Edward L. Schmitz said in a sworn court statement.
That same year, 1989, the state Attorney General's Office began investigating the high pump prices of gasoline that followed the Exxon Valdez oil spill in Alaska, and the state demanded local oil companies reveal their profitability in Hawaii.
At the time, Shell told the state it did not track revenue and income in each state, let alone at each station.
Any response, assuming ... the information could be retrieved from some source, would be speculative, arbitrary, and incompatible with the way Shell operates," Shell wrote the state on Dec. 4, 1989. "Shell has made every reasonable effort to respond fully to the state of Hawaii's investigative demand."
The state found the Shell reports during fact-finding in its anti-trust lawsuit against the oil companies. Shell later argued in court documents that it did not turn over the service station reports because they were not widely accepted as reliable. The state said the company should have delivered the reports anyway. A Shell attorney could not be reached for comment Friday.
For much of the 1990s, when the Legislature, the Attorney General's Office and reporters asked oil companies how much money they were making in the islands, the firms said they didn't know. The companies would only say their profits were generally in line with the rest of the country.
Then, in 1997, while mainland pump prices plummeted along with the cost of crude oil, Hawaii's prices hardly stirred. The state sued the oil companies in October 1998, and it soon discovered the firms were making big profits in Hawaii, and the companies knew it all along.
The Shell evidence was gathered for one segment of the state's lawsuit against the oil companies, in which the state alleged that the firms attempted to hide information from state investigators. The allegations were made in July 1999, nine months after the state sued, and had the effect of tripling potential damages and penalties from the suit to $2 billion.
The oil companies sought to have the so-called "fraudulent concealment" charges thrown out of court along with the conspiracy charges, but the entire case was settled in January of this year before both sides were to argue in court about concealment.
Arguably, the state got a pittance for the lawsuit: 1 percent of the $2 billion it was seeking. But while the case is settled, the new battlefield is the state Legislature, which is considering ways of dealing with high gas prices. Many details of the case that were sealed for the past three years by court order became available to the public and lawmakers a month ago.
Those documents clearly illustrate that while the companies denied having information on Hawaii profitability, they were creating internal financial reports that contained isle data.
In 1989, the state Attorney General's Office formally asked the oil companies how much they were making, using extremely broad terms in its demand for documentation.
In 1992, the state asked for more financial information specifically from Chevron Corp., which responded by providing its densely detailed profit segmentation system reports. What Chevron didn't provide was its so-called "blue books," reports designed for high-level management to review the firm's financial data with relative ease.
When questioned by state lawyers in April 2000, Chevron representative David Heck had no explanation why the firm didn't give the blue books to the state. About a month later, Chevron lawyer Bruce W. McDiarmid submitted a declaration saying state deputy attorney general Ted Clause had agreed to accept the profit segmentation reports. Under oath, McDiarmid said he didn't tell Clause the blue books existed.
Chevron spokesman Albert Chee had no immediate comment Friday about the blue books, saying, "That's news to me."
Texaco Inc., another defendant in the lawsuit, provided the state with no Hawaii profitability information in 1990.
But nine years later, after the lawsuit was filed, the state found a 1990 document used by Texaco managers to compare Hawaii profitability with Seattle and Portland, Ore., called an "Ambucs report." In the report, Texaco projected its 1990 Hawaii net income at $6 million, a return of 42 percent on its $14.5 million in isle assets. The projection was based on actual "contribution," or revenue minus some expenses, from January 1990 through September 1990.
Two years ago, when the state attempted to question Texaco's in-house lawyer Megan Gee under oath as to why the firm withheld the report, her lawyer told her not to answer, citing attorney-client privilege.
Texaco and Chevron have since merged into ChevronTexaco Corp. Spokesman Chee was not available for questions about Texaco.
Last year, a Texaco attorney told state lawyers the company did not give the state the Ambucs report because the state never said there was a problem at the time, documents show. The company said there was no evidence it had fraudulently concealed anything.
The clearest depiction of how much the oil companies made in Hawaii comes from Chevron. During fact-finding in the state's lawsuit, Chevron provided its financial "blue books" to Barry Pulliam, senior economist with Econ One Research Inc., a Los Angeles firm that worked for the state.
From 1988 to 1995, Chevron made $101.2 million in profit from its Hawaii refinery sales through its isle dealers, 22 percent of the company's entire $462.3 million national profit in the same period, according to Pulliam's June 2000 report....
It's not illegal to make money, lawyers for the oil companies said in November summary judgment hearings in the state's lawsuit.
High gas prices in Hawaii are the result of a lack of competitive market forces, not collusion, said Maxwell Blecher, attorney for defendant Tosco Corp.
"Once you decide it's an oligopoly, you've got an explanation for the phenomenon of the high prices, the high margins, the high profits, the lack of vigorous price competition. That explains it all," said Blecher, who gave an opening statement on behalf of all the oil companies.
But that's not what Chevron told Hawaii consumers and the state through much of the 1990s.
"Competition, costs and taxes drive gasoline prices in Hawaii," Jeff McElroy, Chevron Hawaii region marketing manager, said in 1995 testimony at the Legislature. "Competition is alive and well in Hawaii at both the wholesale and retail levels."
How does Chevron account for the difference now?
"I don't want to comment on that," said Chevron's Smith.
http://starbulletin.com/2002/03/31/business/index1.html
June 6, 2001
Shell contributes $1 million to help preserve Laguna Madre in company's largest grant ever for this Nature Conservancy project
HOUSTON (June 6, 2001) - The Shell Oil Company Foundation today announced its $1 million commitment to The Nature Conservancy to help save the Laguna Madre ecosystem on the Gulf of Mexico. Provided over a four-year period, this contribution will be used to purchase land and fund conservation activities.
The Laguna Madre - a shallow, salty lagoon - stretches from Texas into Mexico and is considered one of the world's greatest marine treasures. From shorebirds and waterfowl to rare wildcats to endangered sea turtles, a rich variety of wildlife depends on the Laguna Madre for survival....
"This conservation project is incredibly important to the continued vitality of the Gulf of Mexico," said Albert Myres, vice president of the Shell Oil Company Foundation. "By working with The Nature Conservancy, we believe we can help protect the ecological, economical and recreational value of this unique ecosystem for future generations. Shell has a significant investment in and along the Gulf of Mexico. This project complements our ongoing commitment to conservation of the Gulf ecosystem."...
"Our Laguna Madre project is designed to protect sensitive lands and waters through preserve acquisition and management agreements with private landowners, and through partnerships with responsible businesses like Shell, community organizations and government entities," said Robert J. Potts, state director of The Nature Conservancy of Texas. "The objective is to achieve the highest possible leverage of private dollars. And thanks to Shell's contribution, we're one step closer to achieving our goals."
Shell has supported The Nature Conservancy since 1975 with cash contributions totaling almost $700,000....
The Nature Conservancy also has been the beneficiary of grants from the Shell Marine Habitat Program.
The Nature Conservancy is a private, international, non-profit organization established in 1951 to preserve plants, animals and natural communities that represent the diversity of life on earth by protecting the lands and waters they need to survive.