El Paso Exploration & Production Company ("EPEP"), a subsidiary of El Paso Corporation (NYSE: EP - News), announced today it has commenced a cash tender offer to purchase any and all of its outstanding 7 3/4 percent senior notes due 2013 (the "Notes") (CUSIP No. 283703AB2), of which $1.2 billion in aggregate principal amount was outstanding as of May 29, 2007, and a solicitation of consents ("Consents") from the registered holders of the Notes to certain proposed amendments to the indenture governing the Notes. This tender offer is consistent with the company's ongoing efforts to reduce costs and simplify its covenant requirements.

El Paso's financial condition has improved significantly since the Notes were issued four years ago," said Mark Leland, executive vice president and chief financial officer. "We hope to benefit from our stronger financial position and refinance this debt under more favorable terms."

The tender offer and consent solicitation are described in detail in an Offer to Purchase and Consent Solicitation Statement dated today (the "Statement") and is scheduled to expire at 12:00 midnight, New York City time, on June 25, 2007, unless extended or earlier terminated. Holders of Notes must tender and not withdraw their Notes and deliver and not rescind their corresponding Consents on or before the consent date, which is 5:00 p.m., New York City time, on June 11, 2007, unless extended or earlier terminated, to receive the total consideration, which includes a consent payment of $20.00 per $1,000 principal amount of Notes. Holders of Notes who tender their Notes after the consent date and on or before the expiration date will receive the purchase price, which is the total consideration minus the consent payment.

The total consideration for each $1,000 principal amount of the Notes tendered and accepted for payment will be determined in the manner described in the Statement by reference to the fixed spread of 50 basis points over the yield based on the bid side price of the reference treasury security, 4.875 percent U.S. Treasury Notes due May 31, 2008, as calculated by the dealer managers at 2:00 p.m., New York City time, on June 11, 2007.

In addition to the total consideration or the purchase price, as applicable, holders of Notes tendered and accepted for payment will receive accrued and unpaid interest on the Notes from the last interest payment date for the Notes to, but not including, the applicable settlement date.

Except as set forth in the Statement or as required by applicable law, Notes tendered may be withdrawn and Consents delivered may be revoked at any time on or prior to the withdrawal date, which is 5:00 p.m., New York City time, on June 11, 2007, by following the procedures described in the Statement. Notes tendered on or prior to the withdrawal date that are not validly withdrawn on or prior to the withdrawal date may not be withdrawn thereafter. Tenders of Notes after the withdrawal date may not be withdrawn.

EPEP currently expects to have an initial settlement for Notes tendered on or before the consent date after the consent date and promptly following the satisfaction or waiver of the conditions to the tender offer, including the Credit Agreement Condition and the Financing Condition (each as defined below), followed by a final settlement promptly after the expiration of the tender offer for Notes tendered after the consent date. EPEP reserves the right to extend or forego the initial settlement date, as a result of which the initial settlement date may occur as late as the final settlement date.

The tender offer and consent solicitation are conditioned on the satisfaction of certain conditions, including but not limited to, (i) the tender on or prior to the consent date of Notes representing a majority of the principal amount of the Notes outstanding, (ii) the execution by the trustee of the supplemental indenture implementing the proposed amendments following receipt of the requisite consents, (iii) the adoption of certain amendments to EPEP's revolving credit agreement (the "Credit Agreement Condition"), and (iv) the completion by El Paso Corporation of the sale of new notes in a public offering ("the New Offering") on terms satisfactory to El Paso Corporation (the "Financing Condition"). El Paso Corporation intends to transfer the net proceeds from the New Offering to EPEP for purposes of funding the purchase of the Notes in connection with the tender offer and the payment for consents in connection with the consent solicitation. This press release is not an offer to sell or a solicitation of an offer to buy any securities. If the Financing Condition or any other condition in the Statement is not satisfied, EPEP is not obligated to accept for purchase, or to pay for, Notes tendered (and corresponding Consents) and may delay the acceptance for payment of, any tendered Notes, in each event, subject to applicable laws, and may terminate, extend or amend the tender offer and may postpone the acceptance for purchase of, and payment for, Notes so tendered.

EPEP has retained Citi and Deutsche Bank Securities Inc. to serve as dealer managers for the tender offer and solicitation agents for the consent solicitation. EPEP has retained Global Bondholder Services Corporation to serve as the depositary and information agent for the tender offer and consent solicitation.

Requests for documents may be directed to Global Bondholder Services Corporation by telephone at (866) 294-2200 or (212) 430-3774 or in writing at 65 Broadway - Suite 723, New York, NY, 10006. Questions regarding the tender offer or consent solicitation may be directed to Citi at (800) 558-3745 or (212) 723-6106 or Deutsche Bank Securities Inc. at (866) 627-0391 or (212) 250-2955.

This press release is neither an offer to purchase nor a solicitation of an offer to sell the Notes or any other securities. The tender offer is made only by and pursuant to the terms of the Statement and the related Letter of Transmittal. None of EPEP, the dealer managers, the solicitation agents or the depositary and information agent makes any recommendations as to whether holders should tender their Notes pursuant to the tender offer. Holders must make their own decisions as to whether to tender Notes, and, if so, the principal amount of Notes to tender.

EPEP is a Delaware corporation incorporated in 1999, and a wholly-owned direct subsidiary of El Paso Corporation. EPEP is engaged in the exploration for and the acquisition, development and production of natural gas, oil and natural gas liquids in the United States, Brazil and Egypt.

El Paso Corporation provides natural gas and related energy products in a safe, efficient, dependable manner. El Paso Corporation owns North America's largest natural gas pipeline system and one of North America's largest independent natural gas producers. For more information, visit http://www.elpaso.com.

Cautionary Statement Regarding Forward-Looking Statements

This release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All forward-looking statements are based on assumptions that EPEP believes to be reasonable. However, actual results almost always vary from assumed facts and the differences can be material, depending upon the circumstances. As a result, you should not place undue reliance on such forward-looking statements. The words "believe," "expect," "estimate," "anticipate" and similar expressions will generally identify forward-looking statements. All of EPEP 's forward-looking statements, whether written or oral, are expressly qualified by these cautionary statements and any other cautionary statements that may accompany such forward-looking statements. In addition, EPEP disclaims any obligation to update any forward-looking statements to reflect events or circumstances after the date of this release.

With this in mind, you should consider the risks discussed in the Statement together with the risks discussed under the caption "Risk Factors" in EPEP's Annual and Quarterly Reports on Forms 10-K and 10-Q and in the other documents EPEP files with the SEC from time to time, which could cause actual results to differ materially from those expressed in any forward-looking statement made by EPEP or on EPEP's behalf.


Source: El Paso Exploration & Production Company

Plains All American Pipeline, L.P. announced today that management will be making a presentation at PAA's 2007 analyst meeting, beginning at 12:30 p.m. Central Time tomorrow, May 30, 2007. During the meeting, PAA management will provide attendees with a detailed overview of PAA, its business, certain of its capital projects and its prospects for future growth. A copy of materials to be included in the presentation will be available on the Partnership's website at http://www.paalp.com beginning tomorrow at 11:00 a.m. Central Time and the Partnership will post an audio recording of the meeting on its website on May 31, 2007. In order to access the presentation materials, click on the Investor Relations heading at the top of the Partnership's home page, followed by the Partnership Presentations heading on the top of the Investor Relations home page.

The Partnership also stated that it currently expects its adjusted earnings before interest expense, income taxes and depreciation and amortization ("Adjusted EBITDA") for the second quarter will be meaningfully stronger than the midpoint of the guidance range contained in the Partnership's Form 8-K furnished on May 2, 2007. The Partnership anticipates Adjusted EBITDA for the second quarter will be approximately 10% to 20% above the midpoint of the previously furnished $165 million to $180 million guidance range. The Partnership will update guidance with respect to the full year of 2007 when it holds its second-quarter earnings conference call in early August.

Non-GAAP Financial Measures

EBITDA is a non-GAAP financial measure. Net income and cash flows from operations are the most directly comparable GAAP measures to EBITDA. Adjusted EBITDA excludes selected items impacting comparability. The Partnership's Form 8-K furnished on May 2, 2007 presents a calculation of Adjusted EBITDA and a reconciliation of EBITDA to net income. A copy of the May 2 Form 8-K is available on the Partnership's website (http://www.paalp.com) under the Investor Relations heading. In addition, the Partnership maintains on its website (http://www.paalp.com) a reconciliation of all non-GAAP financial information, such as EBITDA, that it reconciles to the most comparable GAAP measures. To access the information, investors should click on the "Investor Relations" link on the Partnership's home page and then the "Non-GAAP Reconciliation" link on the Investor Relations page.

Plains All American Pipeline, L.P. is a publicly traded master limited partnership engaged in the transportation, storage, terminalling and marketing of crude oil, refined products and liquefied petroleum gas and other natural gas related petroleum products. Through its 50% ownership in PAA/Vulcan Gas Storage LLC, the partnership also develops and operates natural gas storage facilities. The Partnership is headquartered in Houston, Texas, and its common units are traded on the New York Stock Exchange under the symbol "PAA."

Forward Looking Statements

Except for the historical information contained herein, the matters discussed in this news release are forward-looking statements that involve certain risks and uncertainties that could cause actual results to differ materially from results anticipated in the forward-looking statements. These risks and uncertainties include, among other things: the failure to realize the anticipated synergies and other benefits of the merger with Pacific Energy; the success of our risk management activities; environmental liabilities or events that are not covered by an indemnity, insurance or existing reserves; maintenance of our credit rating and ability to receive open credit from our suppliers and trade counterparties; abrupt or severe declines or interruptions in outer continental shelf production located offshore California and transported on our pipeline system; failure to implement or capitalize on planned internal growth projects; shortages or cost increases of power supplies, materials or labor; the availability of adequate third party production volumes for transportation and marketing in the areas in which we operate and other factors that could cause declines in volumes shipped on our pipelines by us and third party shippers; fluctuations in refinery capacity in areas supplied by our main lines and other factors affecting demand for various grades of crude oil, refined products and natural gas and resulting changes in pricing conditions or transmission throughput requirements; the availability of, and our ability to consummate, acquisition or combination opportunities; our access to capital to fund additional acquisitions and our ability to obtain debt or equity financing on satisfactory terms; successful integration and future performance of acquired assets or businesses and the risks associated with operating in lines of business that are distinct and separate from our historical operations; unanticipated changes in crude oil market structure and volatility (or lack thereof); the impact of current and future laws, rulings and governmental regulations; the effects of competition; continued creditworthiness of, and performance by, our counterparties; interruptions in service and fluctuations in tariffs or volumes on third party pipelines; increased costs or lack of availability of insurance: fluctuations in the debt and equity markets, including the price of our units at the time of vesting under our Long-Term Incentive Plans; the currency exchange rate of the Canadian dollar; weather interference with business operations or project construction; risks related to the development and operation of natural gas storage facilities; general economic, market or business conditions; and other factors and uncertainties inherent in the transportation, storage, terminalling, and marketing of crude oil, refined products and liquefied petroleum gas and other natural gas related petroleum products discussed in the Partnership's filings with the Securities and Exchange Commission.


Source: Plains All American Pipeline, L.P.

Gold Point Energy ("the Company") is pleased to report that it has committed to participate in a second stage of exploration activity under a farm-in agreement with APCO Argentina Inc. ("APCO") and Antrim Argentina S.A. ("Antrim"). The farm-out agreement allows GP Energy to earn a 25% interest in portions of the Capricorn Licence (Yacimiento Norte 1/B Block) in Salta Province, Argentina.

The Company has committed to an option to a second earning program in the Capricorn license consisting of a 3D seismic program of up to 150 square kilometers and the drilling of two wells in different structures in the Estacion Pizarro Area in the southern portion of the Capricorn license area. Under this earning program, the Company will earn a 25% interest in the Estacion Pizarro Area by funding 50% of 150 km2 3D seismic program and the cost of two exploratory wells. The cost of the seismic data acquisition program is estimated at US$750,000 to the Company. Seismic data acquisition is slated to commence in Q3-07, and drilling is scheduled for Q2-08. The Estacion Pizarro Exploration Program was developed by APCO, the operator of the Capricorn license, based upon a combination of 2D seismic and geologic data which indicates the presence of two structures that represent potential traps for oil in the Yacoraite sandstone reservoir.

The Company has declined to participate in a separate earning option that it has in the northern portion of the Capricorn block to join in an exploration program for gas in the Devonian. Management decided this program was not consistent with the strategy of the Company at this time.

The Capricorn License is strategically located along an oil-producing trend in the Yacoraite sandstone. It is situated adjacent to the Puesto Guardian Block that has had cumulative oil production of 14.7 MMBO from the upper Cretaceous Yacoraite in five fields. Reserve estimates maintained by the Argentine Secretariat of Energy indicate remaining recoverable reserves for the Puesto Guardian Block are 2.8 MMBO. The Company's strategy is to utilize 3-D seismic to guide a drilling program in search of any extensions of the hydrocarbon bearing Yacoraite sandstone onto the Capricorn License.

Antrim Argentina S.A. is a wholly-owned subsidiary of Antrim Energy Inc. (Toronto:AEN.TO - News)(AIM: AEY).

APCO Argentina Inc. is majority-owned by The Williams Companies, Inc. (NYSE:WMB - News).

GP Energy, a member of the Grosso Group, is engaged in the development of oil and gas projects in North and South America. The Company has experienced technical and management teams which, when combined with the business development and financial acumen of the Grosso Group, provides a high level of expertise and access to an outstanding network of contacts throughout the industry. GP Energy is poised to leverage this expertise and network into early exploration successes.

ON BEHALF OF THE BOARD

Jack S. Steinhauser, President & CEO

Certain statements contained in this press release may be considered as "forward looking". Such "forward looking" statements are subject to risks and uncertainties that could cause actual results to differ materially from estimated or implied results.



The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.


Contact:

Contacts:
Gold Point Energy Corp.
Val Donovan
Manager, Corporate Communications
1-800-901-0058 or (604) 687-1828
(604) 687-1858 (FAX)
Email: vdonovan@goldpointenergy.com
Website: http://www.goldpointenergy.com


Source: Gold Point Energy Corp

American Resource Technologies, Inc. (formerly Golden Chief Resources, Inc.) (OTC BB:ARUR.OB - News) (OTC BB:ARUR.OB - News) was informed by the operator that they successfully completed the test of a chemical additive to enhance and ease the production of the heavy oil in the Jefferson County, Kansas lease.

Where this statement includes "forward-looking" statements within the meaning of Section 27A of the Securities Act, the Company desires to take advantage of the "safe harbor" provisions thereof. Therefore, the Company is including this statement for the express purpose of availing itself of the protections of such safe harbor provisions with respect to all of such forward-looking statements. The forward-looking statements in this announcement reflect the Company's current views with respect to future events and financial performance. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ from those anticipated. In this announcement, the words "anticipates," "believes, "expects," "intends," "future" and similar expressions identify forward-looking statements. The Company undertakes no obligation to publicly revise these forward-looking statements to reflect events or circumstances that may arise after the date hereof. All subsequent written and oral forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by this statement.


Contact:

CONTACT:
American Resource Technologies, Inc., Lewisville
Mike McIlvain
972-219-8585


Source: American Resource Technologies, Inc.

Canadian oil and natural gas company Jed Oil Inc. on Tuesday said it agreed to sell the company's North Ferrier assets for about $33.9 million to fund its planned acquisition of Caribou Resources Corp.

The deal with an unspecified buyer is scheduled to close June 8.

Jed Oil last week offered to acquire all of Caribou's shares and to settle with its creditors.

Shares of Jed Oil added 6 cents, or 3.1 percent, to $1.96 in late-afternoon trading.

Challenger Energy Corp. of Calgary, Alberta, Canada is pleased to report that the operator of the "Intrepid" Block 5(c) multi-well drilling program, Canadian Superior Energy Inc. announced that the Kan Tan IV semi-submersible drilling rig arrived earlier than expected in Trinidad on May 28th. The rig was towed in less than 18 days, approximately 2,284 nautical miles (2,628 statue miles) from Brownsville, Texas in the Gulf of Mexico to the Port of Chaguaramas in Trinidad. The Kan Tan IV is expected to remain in port for less than two (2) weeks to be loaded up with supplies in order to finalize drilling preparations for the commencement of the multi-well drilling program in Trinidad. After its stay in port, the rig will be moved to drill the first exploration well on the "Intrepid" Block 5(c) "Victory" Prospect. Challenger, as a non-competitive industry partner, has entered into a participation agreement with Canadian Superior paying 1/3 of Canadian Superior's Block 5(c) exploration costs to obtain 25% of Canadian Superior's revenue share from this project.

Maersk Contractors, a division of A.P. Moller - Maersk A/S ("Maersk") headquartered in Copenhagen, Denmark (OMX:MAERSK B) is the drilling rig manager for the Kan Tan IV. The Kan Tan IV is owned by SINOPEC of Beijing, China (NYSE:SNP - News). Kan Tan IV has been contracted to drill three (3) back-to-back exploration wells on three (3) separate and distinct large natural gas prospects named "Victory", "Bounty" and "Endeavour", approximately 60 miles off the east coast of Trinidad, on Canadian Superior's "Intrepid" Block 5(c). The wells will evaluate undiscovered natural gas prospects, each with multi-TCF potential, that have been delineated by extensive 3D seismic evaluated and interpreted by Canadian Superior over its "Intrepid" Block 5(c). Each of the three wells in this drilling program is planned to take between 80 and 100 days to drill and fully evaluate.

The first exploration well, "Victory", is directly offsetting and on trend with British Gas's (BG) Dolphin and Dolphin Deep Developments. The "Victory" Prospect has the potential for multiple sands with four-way closure based on detailed seismic interpretation by Canadian Superior. After drilling and evaluating that well on the "Victory" Prospect, the Kan Tan IV will be moved over to commence drilling on the "Bounty" Prospect, followed by drilling on the "Endeavour" Prospect, with each of these three (3) separate prospects having multi-TCF potential. Each of these Block 5(c) offshore wells will be High Pressure ("HP") wells and each will be drilled to a depth in the order of 5,000+ m (16,400+ feet).

Trinidad has proved to be a very attractive basin with multiple large exploration and development opportunities as evidenced by recent drilling and development successes in proximity to Canadian Superior's land holdings and prospects on which Challenger has participation agreements. Natural gas from Trinidad easily accesses the world's largest natural gas markets and supplies approximately 80% of the United States' Liquefied Natural Gas (LNG) which is very important to the North American natural gas supply.

Pictures of the commencement of the tow of the Kan Tan IV from the Brownsville, Texas Harbour to Trinidad and a link to monitor the daily location of the Kan Tan IV are posted on Challenger's website, www.chaenergy.ca .

Challenger Energy Corp. is a Calgary, Alberta, Canada based oil and gas exploration company which is currently focusing on "high impact" oil and gas plays offshore Trinidad and Tobago and offshore Nova Scotia.

Cautionary Statements

This news release contains forward-looking information on future production, project start-ups and future capital spending. Actual results or estimated results could differ materially due to changes in project schedules, operating performance, demand for oil and gas, commercial negotiations or other technical and economic factors or revisions.

Statements contained in this news release relating to future results, events and expectations are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements involve known and unknown risks, uncertainties, scheduling, re-scheduling and other factors which may cause the actual results, performance, schedules or achievements of the Company, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such statements. Such factors include, among others, those described in the Company's Form 20-F on file with the U.S. Securities and Exchange Commission.



The TSX Venture Exchange neither approved nor disapproved the contents of this press release.


Contact:

Contacts:
Challenger Energy Corp.
Investor Relations
(403) 503-8810
Website: http://www.chaenergy.ca


Source: Challenger Energy Corp.

European equities moved lower on Wednesday, reacting to sharp falls on Asian stocks markets after the Chinese government tripled the stamp duty payable on share trading.

The move by China, aimed at trying to cool its overheating financial markets, drove the Shanghai Composite 6.5 per cent lower. China's H share market - Hong Kong-listed shares of mainland companies - had a milder reaction, falling just 2 per cent to 10,403.44.

Contagion to other markets was limited since, although tripled, the share duty only rose from 0.1 per cent to 0.3 per cent. Most concerns centred on the unexpected nature of the move and the possibility of further cooling measures.

"Though the actual effect of the duty adjustment is not large, it will likely discourage speculation in the stock market psychologically," said Masafumi Yamamoto at Nikko Citigroup.

Back in Europe, the FTSE Eurofirst 300 fell 0.7 per cent to 1,590.43, Frankfurt's Xetra Dax shed 0.8 per cent to 7,721.72, the CAC 40 in Paris lost 0.8 per cent to 6,010.57 and London's FTSE 100 slipped 0.7 per cent to6,558.2.

Fallers with the greatest exposure to China included luxury goods groups. Richemont, the Swiss watch maker whose strong first-quarter profit growth was partly thanks to consumer strength in China, fell 1.4 per cent to SFr73.30.

Christian Dior shed 1.5 per cent to EU95.46, while LVMH, which is also targeting growth in China, fell 1.8 per cent to EU85.90.

Spanish construction group FCC fell 2.4 per cent to EU73.20 over disappointment that its Realia property joint venture prices its initial public offering at EU8.80, only midway between the indicative range of EU7.90-EU9.70.

Oil companies were lower following recent falls in crude prices. Sentiment in the sector was further damped by weaker-than-expected first-quarter results from Norway's Statoil (NYSE:STO).

The company, which is taking over the oil production assets of domestic rival Norsk Hydro, reported a 23 per cent fall in core earnings due to losses at its natural gas operations. The shares fell 1.5 per cent to NKr164.

Meanwhile, Austria's OMV, which reported the temporary closure of one of its Petrom refineries in Romania due to environmental concerns, fell 4.7 per cent to EU48.14.

Statoil ASA's net profits for first quarter declined 27 percent from a year earlier due mainly to lower oil and natural gas prices, the company said Wednesday.

Norway's state-controlled company said its net profit for the January through March quarter was 7.83 billion kroner ($1.3 billion) compared to 10.78 billion kroner a year earlier.

It said average realized oil prices declined 11 percent and gas prices fell 14 percent during the same period.

"We are delivering strong results despite lower oil and gas prices," Statoil's Chief Executive Helge Lund said.

The Stavanger-based group said revenues for the quarter were 100.17 billion kroner ($16.6 billion), compared to 111.73 billion kroner a year earlier. The group changed is accounting system on Jan. 1 to meet the International Financial Reporting Standards, and said the year earlier result had been adjusted to make it comparable.

Statoil shares fell 1.20 percent to 164.50 kroner ($27.28) in morning trading on the Oslo stock exchange.

Lund said the production increases and starts from some of its projects had been slowed by technological problems.

The company said production of oil and natural gas, when measured in oil equivalents, declined to 1.199 million barrels per day in the first quarter from 1.237 million barrels per day a year earlier. Oil equivalents measure energy content, rather than volume, of oil and gas.

"We are facing some technical challenges, mainly related to the pioneering high temperature and high pressure fields Kvitebjoern and Kristin," said Lund. "While addressing these short term challenges, we are continuing to build positions for future growth."

In December, Statoil announced plans to take over the oil division of smaller Norwegian rival Norsk Hydro ASA, and Lund said that process was on track.

Lund also said that during the quarter, Statoil agreed to take over the Canadian company North American Oil Sands Corp. in a $2 billion deal. He also said the company acquired new exploration acreage in Tanzania and Indonesia.

Statoil, with about 25,000 employees in 33 countries, was founded in 1972 by the government, which began to partly privatize the group in 2001.

Paxton Energy, Inc. announced today that the company has been advised by the operator, Bayshore Exploration LLC, that sales of crude oil and natural gas have commenced effective May 25, 2007, from the Fiedler No. 1 discovery well for a new Olmos field at Storey Ranch, La Salle County, Texas. Currently, the Fiedler No. 1 is producing natural gas at rates of 50-100 thousand cubic feet of gas per day (mcf) through an 18/64 inch choke and 58 barrels of oil per day. Production characteristics from the Fiedler No. 1 well are expected to be consistent with existing production in the area from other Olmos fields.

The Fiedler No. 1 well was drilled by Bayshore Exploration on the 2,268 acre Storey Ranch area of mutual interest acreage near Paxton's Cooke Ranch properties in the first quarter of 2007 to a total depth of 8,170 feet. Production casing was set to 8,170 feet with Olmos production from 7,875 to 8,000 feet. Paxton has an 18.75% working interest in the Fiedler No. 1 discovery well and its pro-rata unit and a 75% leasehold and working interest in the remaining acreage. Paxton is preparing two new drilling locations to begin further development of the potential Olmos and Wilcox reserves, subject to obtaining required financing.

If you think gasoline prices are high now, consider the eye-popping possibilities if another monster storm pummels the Gulf of Mexico this hurricane season, the way Katrina and Rita battered the petroleum-rich waters in 2005.

The petroleum industry has spent nearly two years trying to repair the damage from those historic Gulf hurricanes, rebuilding the complex web of platforms, pipelines and refineries in a region that produces roughly 25% of the nation's oil and 15% of its natural gas.

The National Oceanic and Atmospheric Administration said this week it expects a busy hurricane season, forecasting 13 to 17 tropical storms, up to 10 of which could become hurricanes. That's higher than the 10 or so storms and hurricanes that form in an average year.

Already this spring, gasoline prices have climbed even higher than post-Katrina-and-Rita prices. Analysts say prices are certain to shoot higher — $4 a gallon, perhaps — if and when the season's first storm enters the Gulf of Mexico.

The average U.S. retail price of unleaded, regular gasoline hit an all-time high of $3.227 a gallon on Thursday, AAA reported. That's closing in on the inflation-adjusted peak of $3.29 a gallon in March 1981, according to the U.S. Energy Department.

As they prepared to fix the Gulf's devastated oil and gas facilities, industry representatives realized standard repairs weren't enough. So the companies that own the platforms, drill the wells and manage the pipelines have spent hundreds of millions of dollars to improve and strengthen their operations. Moorings are stronger, pipelines deeper, backup power in greater supply.

When the 2007 hurricane season begins June 1 — after a much-needed mild 2006 season — many companies that work in the Gulf oil patch say they've prepared as best they can for whatever Mother Nature has in store.

"I think it's important to say, 'as best we can be,"' said Frank Glaviano, vice president of production for Shell Exploration and Production, an arm of Royal Dutch Shell PLC. "We thought we were prepared, and then we saw a storm like never before in terms of Katrina. ... Rita and Katrina are now part of what can happen — not a possibility, but a probability."

Those storms destroyed 113 of the Gulf's 4,000 oil and gas platforms and damaged 52 others. The Minerals Management Service, a division of the U.S. Interior Department that manages offshore leases, says the "vast majority" of production from two years ago has resumed, but it didn't have precise figures.

Katrina provided one of its biggest blows to Shell's enormous Mars production platform, the Gulf's most prolific producer. The storm's 175-mph winds and 75-foot waves broke the steel clamps that attached the 1,500-ton rig structure to the platform and knocked a 200-foot derrick into the water. The surge caused the rig to rise up and slam into the platform, causing heavy damage.

The rig is now held on to the primary structure with clamps Shell says are four times stronger than the ones previously used. The platform resumed operation in May 2006 and is currently producing 190,000 barrels of oil equivalent a day, 20% more than pre-Katrina levels.

"We've closed the book on Katrina, but we took a lot of learnings forward," Glaviano said.

Shell wasn't alone. In fact, soon after the 2005 storms, a number of industry players — Shell, Chevron Corp., MMS officials and the American Petroleum Institute, among them — began looking at ways to protect themselves against such disasters and minimize the damage and subsequent supply disruptions that contribute to spiking gasoline prices.

One of the key conclusions was the need for stronger mooring systems that anchor rigs to the sea floor, sometimes in thousands of feet of water. That's prompted major rig owners like Transocean Inc. and Noble Drilling Inc. to increase the number of anchor lines from eight or nine to 12 in some cases.

One of Transocean's moored rigs, the Marianas, broke free during Hurricane Rita in September 2005 and drifted 140 miles. Another, the Deepwater Nautilus, was set adrift a month earlier by Katrina.

Such unscheduled voyages can be costly. Besides lost revenue, Transocean spent $25 million to fix and upgrade the two rigs, both of which now have 12-point mooring systems.

Noble, whose rig fleet also was damaged in the storms, said it's spending as much as $30 million apiece to upgrade the moorings on six deepwater rigs. The company also has added new monitors to rigs that will allow it to track via the Internet wind speed, wave heights and pitch and roll during a storm.

"We'll be able to see key things happening in real time," Noble spokesman John Breed said.

In the storms' aftermaths, some loose rigs dragged mooring lines and anchors beneath them, raking the sea floor and damaging pipelines. El Paso Corp., the largest U.S. natural gas pipeline outfit, has buried some offshore pipelines deeper and added breakaway joints that automatically shut off the flow of gas if the line is broken.

On the refining side, the two biggest challenges after the storms passed were power disruptions and flooding — both of which prompted refiners to examine their practices and make adjustments, said Cindy Schild, refining issues manager for the American Petroleum Institute, a trade group. After Katrina and Rita, refineries accounting for 29% of U.S. refining capacity were temporarily shut down, according to the U.S. Energy Department.

Some refineries have raised critical equipment so it won't flood, Schild said. They've also beefed up plans to get backup power as quickly as possible, she said.

"It wasn't that they weren't prepared," Schild said. "They had contingency plans, shutdown procedures. I just think getting two, back-to-back hurricanes in such a similar location compounded everything."

Asked during a briefing this week what oil and refining companies have done to prepare for the approaching hurricane season, Homeland Security Secretary Michael Chertoff responded, "The companies have improved plans and facilities, but there is only so much you can do."

Analysts say all the enhancements are important. Whether they'll lessen the impact of another major storm, however, remains to be seen.

"The proof's in the pudding," said David Pursell, an analyst with Pickering Energy Partners in Houston. "Obviously, rig guys and drilling guys are going to be more cautious. The question is: What can you do to a fixed structure that's going to make it less susceptible to 60-foot waves? I think you have to live through one to see if anything's changed."

Added Joe Gordon, the MMS' deputy regional supervisor for field operations: "Hopefully, we've seen the worst Mother Nature can throw at you in the Gulf. There were some hard lessons learned, but I think we're in better position today than we were pre-Katrina."

Companies also learned after Katrina and Rita that it's impossible to run operations offshore if you can't find and take care of your people onshore. The hurricanes shattered communications and scattered people for hundreds of miles.

Shell has arranged to create base camps — complete with lodging, showers and food preparation — for hundreds of refinery and pipeline workers about eight hours after a storm passes. The facilities would be hauled in by 18-wheelers and erected at prearranged sites.

Beginning June 1, Shell also will have generators the size of mobile homes atop 18-wheelers in various locations across the Gulf Coast, ready to roll at a moment's notice. They'd be used to power the base camps, retail stores along evacuation routes and other sites, said Mike Meeuwsen, who oversees emergency management for Shell Oil Products.

"If you need people to get your operations back in business, the sooner you can meet their needs, the better off you are," Meeuwsen said. "That's what this is all about."

Copyright 2007 The Associated Press. All rights reserved.

Parkland Income Fund has closed its previously announced acquisition of all of the shares of United Petroleum Products Inc. ("UPPI")

UPPI markets fuel and lubricants to a network of commercial accounts and independent service station operators throughout central and western British Columbia. Fuel sales volumes for the past year were in the range of 180 million litres.

The purchase price for the acquisition was $17.6 million. The consideration consisted of 430,520 Class "C" limited partnership units of Parkland Holdings Limited Partnership (which are exchangeable into trust units on a one-for-one basis) valued at $6.5 million, $10.4 million of cash and $0.7 million of assumed debt.

About Parkland

Parkland Income Fund operates retail and wholesale fuels and convenience store businesses under its Fas Gas Plus, Fas Gas, Race Trac Fuels and Short Stop Food Stores brands and through independent branded dealers, and transports fuel through its Petrohaul division. With over 550 locations, Parkland has developed a strong market niche in western and northern Canadian non-urban markets. Through Neufeld Petroleum and Propane the Fund markets propane, gasoline, diesel, lubricants, industrial fluids, agricultural inputs and delivery services to commercial and industrial customers in northern Alberta, northeastern British Columbia and the Northwest Territories. To maximize value for its unitholders, the Fund is focused on the continuous refinement of its retail portfolio, increased revenue diversification through growth in non-fuel revenues and active supply chain management. Parkland operates the Bowden refinery near Red Deer, Alberta producing drilling fluids on a contract basis.

The Fund's units trade on the Toronto Stock Exchange (TSX) under the symbol PKI.UN. For more information, visit www.parkland.ca.

Certain information included herein is forward-looking. Forward-looking statements include, without limitation, statements regarding the future financial position, business strategy, budgets, projected costs, capital expenditures, financial results, taxes and plans and objectives of or involving Parkland. Many of these statements can be identified by looking for words such as "believe", "expects", "expected", "will", "intends", "projects", "projected", "anticipates", "estimates", "continues", or similar words and include but are not limited to, statements regarding the accretive effects of the acquisition and the anticipated benefits of the acquisition. Parkland believes the expectations reflected in such forward-looking statements are reasonable but no assurance can be given that these expectations will prove to be correct and such forward-looking statements should not be unduly relied upon. Forward-looking statements are not guarantees of future performance and involve a number of risks and uncertainties some of which are described in the Fund's annual report, annual information form and other continuous disclosure documents. Such forward-looking statements necessarily involve known and unknown risks and uncertainties and other factors, which may cause the Fund's actual performance and financial results in future periods to differ materially from any projections of future performance or results expressed or implied by such forward-looking statements. Such factors include, but are not limited to: general economic, market and business conditions; industry capacity; competitive action by other companies; refining and marketing margins; the ability of suppliers to meet commitments; actions by governmental authorities including increases in taxes; changes in environmental and other regulations; and other factors, many of which are beyond the control of Parkland. Any forward-looking statements are made as of the date hereof and the Fund does not undertake any obligation, except as required under applicable law, to publicly update or revise such statements to reflect new information, subsequent or otherwise.

If you prefer to receive Fund news releases via e-mail, please request at corpinfo(at)parkland.ca.

For further information

Red Deer: Mike W. Chorlton, President and CEO, (403) 357-6400
John G. Schroeder, Vice President and CFO, (403) 357-6400


Source: Parkland Income Fund

The Norwegian oil firm-Statoil AS has acquired a block to start petroleum exploration and production in Tanzania.

The exploration and production activities will start next month (June).

The contractor, Statoil AS is expected to spend a minimum of US$65 million during the entire exploration period of 11 years. Mr. Jan Vollset, Chairman of the Board of Statoil AS told Business Week in Dodoma that in the initial four year period, the contractor will spend a minimum of $10 million for review of existing data and acquisition of total 5800 kms of new seismic data.

Vollset said that the exploration operations over Block 2 will commence shortly after review of the existing data in the area.

The Statoil block which is on the eastern part of Mandawa Coastal Basin has an area of 11, 099sq km.

"During the first extension which is a period of another four years, our firm will spend a minimum of $30 million to drill an exploration well," he said adding that in the second extension period which is a period of three years, the contractor will spend a minimum of $25 million to drill one exploration well.

Statoil AS is an integrated oil and gas company from Norway with representation in 33 countries and active operations in 15 countries including the North Sea, Iran, China, Indonesia, Azerbaijan, and U.S.A while in Africa the firm is represented in Angola, Algeria, Libya, Nigeria, Egypt and Tanzania.

The firm was invited to negotiate with the Government of Tanzania for Block 2 of the Deep Sea after winning the bidding round.

Mr. Yona Killagane, managing director of the Tanzania Petroleum Development Corporation (TPDC) told this reporter in Dodoma last week that the entry of Statoil AS in Tanzania brings the total number of active Production Sharing Agreements (PSAs) in Tanzania to 17.

Killagane said the entry of Statoil as an investor in Tanzania is a manifestation of the longstanding relationship between Norway and Tanzania in oil exploration and development, dating back to 1975.

"There are three more PSAs being negotiated by the Government and TPDC for Deepsea Block 7, the northern part of Lake Tanganyika and the onshore Ruvu area," he said.

TPDC is a state owned firm with a role to oversee the operations of AGIP, the only concession holder then working in the country.

Following the discovery of the Songo Songo Gas field, and subsequent relinquishment by AGIP, TPDC undertook the confirmation of the gas field, and eventual appraisal.

The firm undertook the function of the sole importer of both white and crude petroleum products and marketing but with the onset of economic liberalisation, the oil marketing operations ceased in the year 2000.

China has discovered huge gas reserves in the southwestern province of Sichuan, hoping that the find will help ease growing concerns about energy security, state media reported Monday.

A total of 3.8 trillion cubic metres (133 trillion cubic feet) of natural gas deposits have been found in the western part of the Sichuan Basin, the China Daily said, citing officials in Dazhou city, near the reserve.

The discovery is equivalent to about 60 years of China's total production at current output levels.

The deposits include proven exploitable reserves of a newly-discovered 244 billion cubic metres of gas alongside the 356 billion cubic metres in Puguang gas field, which was announced in March, the report said.

It has become the largest gas field in the country, topping the Sulige gas field in north China's Inner Mongolia Region discovered last year with exploitable reserves of 533.6 billion cubic metres, the newspaper said.

China plans to boost its annual natural gas output from 49.3 billion cubic metres in 2005 to 92 billion cubic metres by 2010, as consumption is expected to more than double the 2005 figure to top 100 billion cubic metres by 2010.

The government has strengthened exploration efforts in a bid to feed the country's brisk economic expansion that has seen double-digit growth for four consecutive years.

Last week, a large gas field with reserves of nearly 30 billion cubic metres was discovered in Karamay in the Xinjiang region in the northwest.

A major oil field, the Jidong Nanpu oil field in Bohai Bay in the north, has also been announced recently.

The oil field is the largest discovery in the country in more than four decades, with expected reserves reaching one billion tonnes or about 7.35 billion barrels.

Russia moved closer to stripping oil major TNK-BP, half owned by BP Plc, of its licence for the giant Kovykta gas field after authorities won a court case against the firm on Monday. A judge in an arbitration court in Irkutsk, the region in East Siberia where the field is located, said he had ruled to throw out a suit by TNK-BP , which was seeking to stop the authorities from taking away the licence. "This dispute could not be reviewed by our arbitration court. It is out of our jurisdiction to review the submitted documents," judge Valery Titov, who presided over the hearing, told Reuters. The protracted battle for Kovykta, which has enough reserves to supply the world with gas for almost a year, is seen by many analysts as part of a Kremlin drive to consolidate major energy resources under state control. It has also been interpreted as state pressure on the group of billionaires who own the other half of TNK-BP to sell out to a Kremlin-controlled firm, which would become BP's partner. TNK-BP's Rusia Petroleum unit, which holds the licence, now has the right to appeal against the decision. "We are disappointed by the court's decision. I think Rusia Petroleum will appeal," said TNK-BP's spokesman Alexander Shadrin. The court decision comes as Russia's environmental agency is due to finish this week a final inspection of Kovykta, accusing its owners of underproduction. TNK-BP had hoped to use Kovykta for gas exports to China but says it has been forced to underproduce because gas export monopoly Gazprom refuses to let it do so. The deputy head of the agency, Oleg Mitvol, said earlier this month the licence could be withdrawn before June. Mitvol led the state's environmental campaign against Royal Dutch Shell's Sakhalin-2 oil and gas group last year, although the pressure quickly subsided after the group agreed to sell a controlling stake to Gazprom for $7.45 billion. The final check on Kovykta should confirm the results of a major inspection completed in January, when the agency gave Rusia Petroleum three months to rectify violations at the field or lose its licence. Under the licence terms, Kovykta was to produce 9 billion cubic metres by 2006, but without an export licence its output has been restricted to the much smaller needs of Irkutsk region. TNK-BP has said it is ready to let Gazprom control Kovykta if the field becomes part of a bigger development in East Siberia.

Several people attended the oil and gas leasing information meeting last week, but in case you missed it, I would like to share some of the information presented.

The oil companies are starting to drill again, after a layoff and so it is important to be informed.

Do you know what an orphan well is? An improperly abandoned oil and gas well on your property may be a hazard to the environment and your health and safety. Recognizing an "orphan" or abandoned well and what can be done to properly plug it is important.

The Ohio Department of Natural Resources Mineral Resources Management has a technical services support section to answer questions, such as "how will I know if I have a leaking abandoned oil and gas well on my property?" "Who is responsible for plugging oil and gas wells in Ohio?" "What is the orphan well program? "What happens after a complaint is filed?" "How long does it take the orphan well program to plug a well once a complaint is filed?" "Why am I asked to sign a landowner waiver?" And other questions can be answered by contacting the ODNR at 614-265-7059 or go online to ohiodnr.com
You probably knew there was an oil and gas field enforcement provided by the state of Ohio. They respond to citizens' complaints about oil spills, gas leaks, brine disposal, safety, idle wells and well or tank fires. They have several regional offices. The one closest to our area is in Cambridge. You may contact them at 740-439-9079

Larry Gebhart, attorney for the Ohio Farm Bureau, said there are 14 inspectors in the state. The main point he brought out over and over is that you are the one responsible to enforce the lease. It is between you and the company, not the state of Ohio. And you should always have a back up energy source when you have a well. Limit the scope. The more you can limit the more you can protect your interest.

The leverage you have depends on how much they want to drill. Everything is negotiable.

The lease should of course be fair to both parties. Your lease should include the payment for an attorney to review the actual lease before signing. You should also specify which acreage they can use. The lease should include the set period of time and can be limited from a few months to 10 years or more. They are usually for a 2- to 5-year period. If there is a delay in drilling a rental fee per acre should be established and you can ask for a rental fee in advance. The percentage of your payment for an oil and gas lease is usually one-eighth of the production. You can ask for interest money if the payments are not made on time. You can also look up copies of the production records of each well.

You can establish a set time for commencement of a second well or lease termination, since 15 percent of wells drilled are dry holes. If they shut in a well, make some provision for payment until the termination of the lease.

You should not allow storage tanks or storage of brine without a separate agreement semis could be running in and out of your property to dispose of these items.

A typical lease provides for 200,000 to 400,000 cubic feet of free gas for the property owner. Usually for one house. If you use more than the free amount you should negotiate a payment such as the wellhead price rather than retail price. The landowner is required to install and hook up for the free gas connection, some land owners may wish to include an option to buy the unproductive well, which makes them responsible for the plugging and other liabilities.

There may be a clause to allow the oil and gas company to sell, trade, sublet or transfer the lease to another firm. You should ask for a written right of approval before assignment and the right to say no.

You may want to ask for damages to crops, drainage, water supplies, fences and timber. Multiple owners must each sign the lease many more items maybe necessary in each situation. The main thing is check references, stay in communication, check with other well owners, remove lease from title if terminated, limit the scope and good luck.

Jo Hoeust from the Division of Mineral Resources Management, was present to answer questions. He stated that the division was formed in 1955. The big oil boom in our state was in 1965. The first oil well in the state of Ohio was drilled in 1814 in Noble County and was 465 feet.

There are now 16,966 producing wells in 42 counties in the state. They run from 200 feet to 12,000-ft. deep wells, in 13 formations.

In 2006, 952 new wells were drilled. The shallowest was 400 feet in Lorain County and the deepest was 7,800 feet in Tuscarawas county. Muskingum County had 52 new wells drilled. The total value across the state was $1,700,449. The early 80s was the only time the value was over a billion.

Jill Lane, of the Hopewell Oil and Gas Company, was also present at the meeting. They have been in business for 25 years. She stated that the average length of a lease was about 20 years and most items mentioned by Larry Gearhart were in their leases. They try to stay in the same area to drill and unitize if the well is close to a property line. She said you should call someone they had drilled for in the past to get references. They are drilling in Licking County at this time. She had a copy of their lease which she handed out to anyone interested to review.

Farm Bureau provides these meetings for our members to keep them informed.

Ruth Mclaughlin in the information chairperson for the Muskingum County Farm Bureau. She can be reached at 740-674-4777.

Oil fell a dollar Monday after Nigerian oil unions suspended a two-day strike that had threatened to halt oil shipments from the world's eighth-largest oil exporter over the weekend .

London Brent crude fell $1.01 to $69.70 a barrel. U.S. crude fell 80 cents to $64.40, after surging more than $1.00 on Friday. The market was thin due to holidays in both the UK and the United States.

Nigerian Union leaders said Saturday that workers at the national oil company had suspended a strike after the government agreed to a pay raise and other benefits, although oil traders remained anxious over exports.

Output from the world's eighth-largest exporter is already down by about a quarter, after an 18-month campaign of militant attacks against oil installations.
Gas worries crimp vacation plans

On Friday gunmen kidnapped nine foreign oil workers and a Nigerian colleague from a ship off the coast of Nigeria, taking the total number of foreign hostages to 25.

The U.S. Memorial Day holiday on Monday marks the start of the peak demand summer driving season, when motorists hit the roads for vacation.

Record-high pump prices of $3.23 a gallon are not expected to have deterred vacationers from their road trips, said motoring group AAA.

Concern that gasoline supplies might run short in the U.S., which is the world's largest energy consumer, helped drive oil prices to a nine-month high last week.

U.S. gasoline futures bucked the fall in crude futures and were little changed Monday.

A series of refinery outages have cut U.S. gasoline supplies by 15 percent since the winter, reversing the seasonal trend to stockpile motor fuels ready for summer.

The Organization of the Petroleum Exporting Countries has laid part of the blame for recent oil price spikes on U.S. motor fuel supply problems, and has resisted consumer calls to pump more crude.

"Production from OPEC will stay stable," a senior OPEC delegate told Reuters on Monday. "There is no reason to change. On the crude side, the market is well balanced."

Refinery capacity constraints were likely to affect markets in consumer countries for some time, he added.

Crude oil speculators boosted their net long positions by more than a fifth on the New York Mercantile Exchange in the week to May 22, betting that prices would rise further. Gasoline speculators in contrast trimmed net length.

Crude oil fell as much as 1.4 percent in New York after oil workers in Nigeria, the biggest producer in Africa, ended a two-day strike.

The government met union demands for higher pay, Lumumba Okugbawa, deputy general secretary of the Petroleum & Natural Gas Senior Staff Association of Nigeria, said in Lagos today. The West African nation is losing more than 600,000 barrels of output a day because of violence, kidnappings and damage to facilities.

``The Nigerian headlines are driving the market lower,'' said Akira Kamiyama, an oil trader at Mitsui & Co. in Tokyo. ``The reaction to the news was quite fast as we can see with the selldown.''

Crude oil for July delivery fell as much as 91 cents, or 1.4 percent, to $64.29 a barrel in electronic trading on the New York Mercantile Exchange and traded at $64.54 at 2:14 p.m. The exchange was closed for regular trading because of a U.S. holiday.

Prices also declined on speculation U.S. fuel prices may ease as refiners increase output to meet summer demand. A U.S. government report last week showed gasoline output rose to the highest since December. U.S. crude oil stockpiles are 7.6 percent above their five-year average, according to the Energy Department.

Brent crude oil futures on London's ICE Futures Exchange fell as much as $1.18, or 1.7 percent, to $69.51 a barrel. The contract closed at $69.71 a barrel in London.

Brent rose to $71.80 a barrel on May 24, the highest intraday price since Aug. 28, as strikes and kidnappings curbed output in Nigeria.

Nigerian Exports

In Nigeria, export loadings were delayed during the strike by about 6,000 union workers at state-owned Nigerian National Petroleum Co., union leaders said last week.

Sabotage and kidnappings in the oil-rich delta region of Nigeria have surged following last month's presidential elections. Three Americans and four Britons were among a group of oil workers kidnapped in Nigeria on May 25, according to U.S. and U.K. government spokesmen.

Gasoline demand in the U.S., the world's biggest oil consumer, peaks from June to August as summer vacations, starting with today's Memorial Day holiday, put more cars on the road.

More than 38 million Americans will travel 50 miles (80 kilometers) or more from home during the three-day holiday break, 1.7 percent more than last year, the AAA forecast on May 17.

Gasoline for June delivery was at $2.3975 a gallon today after rising 2 percent to $2.4037 a gallon on May 25, a one-week high. The contract expires May 31.

To contact the reporter on this story: Nesa Subrahmaniyan in Singapore at nesas@bloomberg.net ; Manash Goswami in New Delhi at mgoswami@bloomberg.net .

A $7 billion pipeline to be laid across northern Malaysia will divert up to a third of oil now being carried through the Strait of Malacca, ensuring a secure supply from the Middle East to East Asia, officials said Monday.

The pipeline would stretch 300 kilometers, or 185 miles, from Kedah State, on the northwestern coast, to Kelantan State, in the northeast.

Work is scheduled to begin in 2008 and finish in 2014, said Rahim Kamil Sulaiman, chairman of the project owner, Trans-Peninsula Petroleum.

"This is not a political project," Rahim said at a news conference. "It is a commercial undertaking. The project is economically viable."

He said the pipeline would be a substitute for the Strait of Malacca, through which half the world's oil is shipped. The strait is also notorious for robberies and hijackings, although the number of attacks has fallen since Malaysia, Indonesia and Singapore, which share the waterway, increased patrols in 2005.

The world oil markets are well supplied and price volatility is the result of a lack of refining capacity in the United States, not a shortage of crude, Qatari Oil Minister Abdullah al-Attiyah was reported as saying on Monday.

"Price volatility is the result of factors that are unrelated to crude supply, which is available in large quantities, but (because of) a lack of new refineries in the United States over the past 40 years," Qatar's official news agency, QNA, quoted him as saying.

London Brent crude hit a nine-month high of $71.80 a barrel last week after calls from the International Energy Agency, which represents consumer countries, for
OPEC to raise output.

It was trading at $70.44 a barrel on Monday.

Oil has risen from below $50 in January due to lower supplies from OPEC, violence in Nigeria that has cut output there and a drop in inventories of gasoline in the United States. Various refinery problems in the United States have curbed motor fuel output.

The Organization of the Petroleum Exporting Countries, the source of over a third of the world's oil, agreed last year to curb output by 1.7 million barrels per day, about six percent.

OPEC meets again in September to set supply policy. Officials have consistently ruled out meeting before then.

Attiyah also said that U.S. warnings to oil-exporting countries over high prices had a negative effect.

"When oil prices fell to $7 before 2000 and the oil exporters began to complain, they said it was up to the market, despite the losses the exporters were hit with as a result of the sharp drop in oil prices," he said.

Kuwait's opposition will ask to grill Oil Minister Sheikh Ali Jarrah al-Sabah, a member of the ruling family, over controversial statements he made about a graft case, an MP said on Monday.

"The request to question him will be filed on June 10 and the meeting will take place on June 25," opposition MP Mussallam al-Barrak told reporters.

He said the opposition has enough support for a vote of no confidence which, if passed, would mean the minister's automatic dismissal.

Sheikh Ali was quoted by Al-Qabas newspaper as saying on May 12 that he considers former oil minister Sheikh Ali Khalifa al-Sabah, a defendant in a major graft case, as "my master and that I consult him occasionally on oil issues."

Sheikh Ali al-Khalifa is one of five former top officials of the state-owned Kuwait Oil Tanker Co (KOTC) accused of stealing more than 100 million dollars. He categorically denies the charges.

Barrak said that only the minister's resignation would halt the opposition request to interrogate him, and added that an apology would not be enough.

The oil minister came under fire in a parliamentary session on May 14 when several MPs called on him to step down.

Meanwhile parliament on Monday concluded a heated debate on a report on more than 40 corruption cases by asking its public funds protection committee to follow up on graft cases being heard in courts inside and outside the emirate.

Government legal officials said on May 1 that they have recovered 548 million dollars from British and Spanish court rulings on graft cases involving both Kuwaitis and foreigners.

The verdicts relate specifically to the KOTC graft case and the loss of five billion dollars invested in the Spanish Torras Group in which former officials of the London-based Kuwait Investment Office (KIO) were cited to have committed fraud in a number of cases.

Malaysian, Indonesian and Saudi Arabian firms on Monday signed agreements for construction of a pipeline that aims to divert 20 percent of oil flowing through the strategic Malacca Strait, the project owner said.

Malaysia's Trans-Peninsula Petroleum Sdn Bhd said it signed an agreement with Malaysia's Ranhill Engineers and Constructors Sdn Bhd and Indonesia's PT Tripatra to build the pipeline at an estimated cost of seven billion dollars over seven years.

Trans-Peninsula Petroleum, the owner and promoter of the project, said it signed separate memoranda of understanding with Bakrie and Brothers of Indonesia to supply pipes, while Al-Banader International Group of Saudi Arabia will provide the oil.

Prime Minister Abdullah Ahmad Badawi first announced the development earlier this month as part of the government's effort to develop Malaysia's northern region.

"We have always wanted to do more for that area and that also will take care of the eastern corridor," he said at the time.

Badawi witnessed the signing with Indonesian President Susilo Bambang Yudhoyono on the sidelines of the annual World Islamic Economic Forum, aimed at boosting cooperation among Muslim communities.

"When the entire project is completed in 2014, TRANSPEN pipeline will divert about 20 percent of oil transiting through Straits of Malacca, proportionately easing the congestion in the Straits," Trans-Peninsula said in a statement.

Half of the world's oil shipments currently pass through the 960-kilometre (595-mile) Strait of Malacca, the busiest seaway in the world, which links the Indian Ocean and the South China Sea.

The Strait was notorious for pirate attacks but security officials, who fear the economic and strategic ramifications of any disruption to the vital maritime traffic, say security has vastly improved.

"Everyone can use the pipeline. It is to direct traffic away from the international waterway of the Straits of Malacca," Rahim Kamil Sulaiman, chairman of Trans-Peninsula Petroleum, told a news conference.

In its statement, Trans-Peninsula said the pipeline, about 300 kilometres in length, will cut across Malaysia's northern states of Kedah, Perak and Kelantan. It will have support facilities for deep-draught tankers at either end.

Rahim said the oil will come mainly from the Middle East but also from Africa for "the East Asian oil market".

He said "we have made known our projects to both China and Japan, especially China".

Government data in China say the country's crude oil consumption rose 7.1 percent year-on-year in 2006.

Phase one of the oil pipeline project is expected to begin in 2008 after land acquisition and environmental and social impact assessments, Trans-Peninsula Petroleum said.

Plans call for an initial 48-inch (122-centimetre) pipeline with a throughput of two million barrels a day and storage capacity of 60 million barrels. It would be operational by 2011, the company said.

After four to five years of operation, capacity would be upgraded to a maximum of 180 million barrels of storage and six million barrels per day throughput, it said.

Deputy Prime Minister Najib Razak has said the proposed project was intended to reduce transport costs and security risks for tankers on the Malacca Strait.

"It's a very expensive solution to a problem that doesn't seem that severe, frankly," said Jason Feer, of energy market analysts Argus Media Ltd in Singapore.

While traders would save three days' sailing time, the logistics involved and the cost of using the pipeline would leave "a pretty marginal benefit," he said.

"In the end, the big test will be, will banks loan them money to build this?" Feer told AFP.

Oil fell a dollar on Monday after Nigerian oil unions at the weekend suspended a two-day strike that had threatened to halt oil shipments from the world's eighth-largest oil exporter.

London Brent crude fell $1.03 to $69.66 a barrel by 1543 GMT. U.S. crude fell 85 cents to $64.35, after surging more than $1.00 on Friday. The market was thin due to holidays in both the UK and the United States.

Nigerian Union leaders said on Saturday workers at the national oil company had suspended a strike after the government agreed to a pay rise and other benefits, although oil traders remained anxious over exports.

Output from the world's eighth-largest exporter is already down by about a quarter after an 18-month campaign of militant attacks against oil installations.

On Friday gunmen kidnapped nine foreign oil workers and a Nigerian colleague from a ship off the coast of Nigeria, taking the total number of foreign hostages to 25.

The U.S. Memorial Day holiday on Monday marks the start of the peak demand summer driving season when motorists hit the roads for vacation.

Record-high pump prices of $3.23 a gallon are not expected to have deterred holidaymakers from their road trips, said motoring group AAA.

Concern that gasoline supplies might run short in the world's largest energy consumer helped drive oil prices to a nine-month high last week.

U.S. gasoline futures bucked the fall in crude futures and were little changed on Monday.

A series of refinery outages have cut U.S. gasoline supplies by 15 percent since the winter, reversing the seasonal trend to stockpile motor fuels ready for summer.

The Organization of the Petroleum Exporting Countries has laid part of the blame for recent oil price spikes on U.S. motor fuel supply problems and has resisted consumer calls to pump more crude.

"Production from
OPEC will stay stable," a senior OPEC delegate told Reuters on Monday. "There is no reason for now to change. On the crude side, the market is well balanced."

Refinery capacity constraints were likely to affect markets in consumer countries for some time, he added.

Crude oil speculators boosted their net long positions by more than a fifth on the New York Mercantile Exchange in the week to May 22, betting that prices would rise further. Gasoline speculators in contrast trimmed net length.

(Additional reporting by Jonathan Leff in Singapore)