The U.S. risks losing its competitive edge in a global economy if it does not soon address the country's energy needs, climate change and foreign policy in a comprehensive way, the chief executive of Marathon Oil said Friday.

Clarence P. Cazalot Jr., president and CEO of Marathon Oil Corp., said that as worldwide demand for fossil fuels rises, the country's biggest challenge is dealing with these and other related issues underlying U.S. "energy security," or lack thereof.

Cazalot spoke on a panel about how the U.S. economy must adapt to remain competitive in the global economy.

Richard McCormack, vice chairman of Merrill Lynch & Co. LLC, said the U.S. needs to get its deficit under control, and start using and exporting more homemade products.

The budget deficit dropped to $162.8 billion in 2007, an $85 billion improvement over last year, and the Commerce Department recently reported that the trade deficit declined to $57.6 billion in August, down 2.4 percent from July.

James Hagedorn, chairman and CEO of lawn and garden product maker Scotts Miracle-Gro Co., agreed that debt was a major problem and said the "government needs to leave business alone to do its thing."

"There's no leadership in this town," Hagedorn said during the panel discussion sponsored by the Council of Competitiveness.

Annual, double-digit increases in health care costs also are inhibiting U.S. competitiveness.

"It's killing us," Hagedorn said, adding that the Marysville, Ohio-based company does not allow its employees to smoke and that most workers quit the habit to keep their jobs despite management's initial concerns of filling entry-level lawn technician and other positions.

The panelists also agreed that energy security should be a top priority. Merrill Lynch's McCormack said the U.S. should follow France's lead and increase its use of nuclear power as a way to address environmental concerns and reduce dependence on foreign oil.

NRG Energy Inc. recently submitted the first complete application for a new nuclear reactor in the U.S. in nearly 30 years, and the Energy Department earlier this month said it will guarantee loans for up to 80 percent of the total construction cost of new reactors.

On the issue of how to pay for environmental policies designed to reduce carbon emissions, Cazalot prefers a direct tax on the primary gas blamed for climate change, as opposed to cap-and-trade programs that allow a company with reduced emissions to sell a credit to another business that needs to exceed the emissions limit to operate. But he said Congress appears headed toward a cap-and-trade policy.

Oil and gas giant BP PLC agreed Thursday to pay $373 million in fines and restitution to end investigations into whether it manipulated energy markets and violated environmental laws, the Justice Department said.

Additionally, four former BP employees were indicted by a federal grand jury in Chicago on 20 counts of mail and wire fraud charges connected to the price-fixing scheme.

BP, Europe's second-largest energy company, will pay an estimated $50 million as part of an agreement to plead guilty for violating the Clean Air Act as a result of a 2005 explosion at its Texas City refinery that killed 15 employees and injured more than 170 others.

Additionally, it will pay $20 million in criminal fines and restitution to the state of Alaska and the National Fish and Wildlife Foundation for pipeline leaks of crude oil that polluted tundra and a frozen lake in Alaska.

The rest of the fines aim to punish BP for conspiring to manipulate propane prices.

Federal investigators have been looking at whether BP traders tried to pump up profits by cornering the propane market, driving spot prices in February 2004 as high as 94 cents a gallon in places such as New York, Pennsylvania and Illinois.

Investigators alleged that traders at BP Products North America Inc. bought massive quantities of propane to be delivered over a pipeline that starts in Texas and then withheld supplies, forcing other buyers in the wholesale market to pay an unnaturally high premium.

The over-the-counter market includes trades conducted on the phone or electronically in products not listed on exchanges. In the end, BP did not profit because the financial benefits of the scheme were outweighed by the unexpectedly huge costs associated with carrying it out.

BP also is grappling with fallout of earlier problems, such as the Alaskan oil spill and the refinery blast that have resulted in ongoing higher maintenance costs.

ARAPAHOE ENERGY CORPORATION ("Arapahoe" or the "Corporation") (TSX VENTURE:AAO - News) is pleased to provide the following reserve and other oil and gas information regarding First West Petroleum Inc. ("First West").

Arapahoe and First West entered into a non- arm's length letter agreement to effect a business combination (the "Transaction") whereby Arapahoe will acquire all of the outstanding common shares of First West in exchange for common shares of Arapahoe. The Transaction will result in First West shareholders receiving 10.415 common shares of Arapahoe for each First West common share held. Upon completion of the Transaction and the associated financings, former shareholders of First West are anticipated to collectively hold approximately 38.7% of the outstanding common shares of Arapahoe. Please refer to Arapahoe's news release dated October 19, 2007 for additional information regarding First West and the Transaction.

FIND SUMMARY IN : biz.yahoo.com

Alberta's plan to increase oil and natural-gas royalties beginning in 2009 will hurt energy companies that don't have oil-sands assets or international projects, Calgary brokerage FirstEnergy Capital Corp. said.

Under the province's plan, the royalty rate on a well producing 100 barrels of oil a day will rise to 44 percent from 29 percent at an oil price of up to C$75 ($77.85) a barrel, closely held FirstEnergy said today. Crude oil traded as high as $92.22 a barrel in New York today.

``The landscape of opportunity for the smaller capitalized juniors has shrunk discernibly,'' FirstEnergy analysts Robert Fitzmartyn and Cody Kwong said in a research note. ``Economics will be challenged for both natural-gas and oil projects, particularly on exploration projects.''

Alberta, which supplies about 10 percent of U.S. oil needs, yesterday announced plans to raise royalties to gain an additional C$1.4 billion in government revenue in 2010. There will be no exemptions for existing projects.

Galleon Energy Inc. fell C$1.65, or 10 percent, to C$14.60 as of 12:27 p.m. on the Toronto Stock Exchange. Highpine Oil & Gas Ltd., a producer that sold its first shares in 2005, dropped C$1.84, or 17 percent, to C$9.01. Duvernay Oil Corp. declined 91 cents, or 2.7 percent, to C$33.25. All three companies are based in Calgary.

The new royalty system reduces Highpine's net asset value by 31 percent to C$8.31 a share and Galleon's value by 18 percent to C$13.71 a share, FirstEnergy estimated. Duvernay's value is seen declining 15 percent to C$21.01 a share.

Galleon and Highpine ``have high-productivity wells that are going to be subject to higher royalties,'' said Glenn MacNeill, who manages the equivalent of $1.04 billion at Toronto-based Sentry Select Capital Corp. ``They will be penalized the most.''

Sharing in Boom

The royalty increase will ensure all Albertans get their share from a boom in projects to extract crude from Alberta's tar sands, Alberta Premier Ed Stelmach said yesterday. The projects were spurred by a rally in crude-oil prices that sent futures traded on the New York Mercantile Exchange to a record today.

Companies including EnCana Corp., Canada's biggest gas producer, Talisman Energy Inc. and Canadian Natural Resources Ltd. previously said they would pare spending in Alberta next year if the royalties were raised in line with recommendations made by a government-appointed panel last month.

Alberta's share of oil-sands revenue will vary from 56 percent to 66 percent depending on prices. The government's panel had proposed boosting the share to 64 percent. Alberta won't implement a proposed new tax on oil-sands projects.

The government's share of gas royalties will rise to 60 percent, up 2 percentage points from current levels. The royalty panel recommended boosting the rate to 63 percent.

Alberta's take from oil wells will climb the 5 percentage points suggested by the panel and rise to 49 percent.

`Substantial' Changes

The government's changes are ``substantial and could have a significant impact on industry economics,'' Suncor Energy Inc. Chief Executive Officer Rick George said in a statement late yesterday. Suncor, the world's second-biggest oil-sands producer, will take time to study the changes, he said.

Canadian energy stocks dropped the day after the royalty panel released its report on concern the changes may be implemented in full. The 74-member S&P/TSX Energy Index fell 2.6 percent on Sept. 19.

The new policy will ``deepen the gloom'' for smaller producers, said Jeffrey Fiell, an energy analyst at Calgary-based Octagon Capital Corp. ``It squeezes the margins more and the attractiveness to investment from outside of Alberta, and outside Canada even, is a lot less. Larger companies obviously can absorb the changes a lot easier.''

With oil prices setting records over $90 a barrel and $100 looking ever more likely, experts say there's a good chance drivers will see $3 gasoline before the end of the year.

"Three dollar gasoline in this market is unavoidable," said Stephen Schork, publisher of the industry newsletter the Schork Report. "At this rate, we're going to see $4 a gallon."

rude oil prices have soared nearly 30 percent over the last month, mainly over fears that supply won't meet demand, a falling U.S. dollar, and what some say is a high degree of speculative investment money.

But so far drivers have been lucky. The national average price for gasoline has risen barely one cent, going from $2.81 last month to $2.82 this month, according to the motorist organization AAA, although in many areas of the country gasoline is already over $3.

Analysts have said the relatively stable gasoline price is due to slack demand following the high-demand summer driving season.

But the relatively cheap gas prices are causing profit margins to slip for refiners, who have to pay top dollar for crude but aren't passing along the extra costs for consumers, yet.

"That doesn't seem sustainable," said Kevin Norrish, a commodities analyst at Barclays in London.

Norrish said it's likely refiners will scale back gas production, just as the higher demand holidays approach.

"At some point, it has to happen," he said.

Schork also said a lack of refining capacity means U.S. refiners will struggle to produce both gasoline and heating oil, so the country will end up importing more gas during the holidays. And he noted that importing gas with a weak U.S. dollar is an expensive proposition.

"We could easily see $3 by the end of the year," he said.

Not all analysts agree.

Nauman Barakat, an energy trader at Macquarie Futures, the trading arm of Macquarie investment bank, said gasoline prices near $3 a gallon have kept demand down.

The Energy information Administration says gasoline demand has been about flat for the last few months, whereas it usually grows by about 1.5 percent a year.

"We're not going to see a similar increase in gas prices," said Barakat. "But if [oil] prices stay at these numbers, then of course it will be a different story come spring."

And therein lies the catch. All the analysts in this story expect crude to hit $100 a barrel.

"It's a matter of when, not if," said Norrish.

Norrish said it was fundamentals, not speculative investment money, driving oil prices - strong demand, falling inventories, no production increases from OPEC.

"The underlying market balance will continue to tighten, and if the geopolitical situation worsens we'll get to $100 very quickly," he said.

Barakat said there are now more traders betting oil will rise to $100 than there were betting it would cross $90 back when crude was still in the $80s.

And Schork noted the sheer amount of oil contracts trading, and the fact that OPEC tried to cool prices back in September with a production increase, did nothing but send prices higher.

"There's a tremendous amount of bull energy in this market," he said. 'There's no reason we can't get to $100."

Crude oil prices spiked above $92 a barrel in Asia Friday on growing tensions in the Middle East and renewed concern about oil supplies.

Light, sweet crude for December delivery rose $1.40 to settle Friday at a record close $91.86 a barrel on the New York Mercantile Exchange after rising overnight as high as $92.22, a new trading peak.

The Nymex crude contract jumped $3.36 to settle at $90.46 a barrel Thursday in the U.S., closing above $90 a barrel for the first time.

Oil prices are within striking distance of the all-time high when adjusted for inflation of $93.09 set in January 1981, according to the Energy Department.

Oil futures have risen nearly $7 a barrel, or 8%, since the government on Wednesday reported a sharp drop in crude inventories in the United States. The inventory numbers reinforced a view that oil supplies are falling at a time of year when they should be rising to meet expected strong fourth quarter demand.

Prices in futures markets for other energy goods, including gasoline, heating oil and natural gas also rose.

Behind the oil price increase:

•Supplies. U.S. oil inventories fell at the fastest pace in six weeks last week and are 4.7% lower than a year ago, the Energy Department said this week.

The USA has enough oil on hand to meet current demand for 21 days, down from 22.1 days a year ago, according to the government.

"The supply picture has tightened up," A.G. Edwards energy analyst Eric Wittenauer says.

•Middle East. Tensions in the oil-rich Middle East appear to be intensifying. Investors have been concerned for weeks that a Turkish attack on Kurdish rebels could halt oil supplies from northern Iraq. Thursday, the Bush administration announced economic sanctions on Iran's banks and Revolutionary Guard, accusing the nation of continuing to pursue nuclear weapons capability and supporting terrorism.

Although the USA does not import oil from Iran, the world's fourth-largest oil producer, there is concern that if broader sanctions were imposed on that nation, there would be less oil on the world market.

•Other violence. The market was unsettled by a dawn attack Friday on an oil vessel off the coast of Nigeria by anti-government militants.

•Investors. Oil and other commodities have become a popular investment in recent weeks amid economic and interest rate uncertainty. The increase in investors is likely helping to fuel oil's rise.

•OPEC. The Organization of Petroleum Exporting Countries has been largely silent despite the price jump. OPEC last month pledged to boost output Nov. 1. But the move has been seen as being too small to offset rising world demand.

The increased prices are expected to be seen in higher costs for a number of items, including heating oil and gasoline. But the oil price gains have come after the peak driving season, meaning there will be less price momentum for gasoline than there would have been if the increase had hit in the summer.

"If crude oil doesn't drop precipitously … gasoline prices will follow, but not as quick, not as steep" as oil, says Bruce Bullock, director of the Maguire Energy Institute at Southern Methodist University.

At the pump, meanwhile, gasoline prices continued their delayed reaction to the recent increase in oil prices. The national average price of a gallon of gas rose 0.3 cents overnight, to $2.823 a gallon, according to AAA and the Oil Price Information Service.

Gunmen in speedboats kidnapped six people from an oil vessel off Nigeria's coast at dawn Friday, the second attack on petroleum workers this week, officials said.

The Polish, Filipino and Nigerian workers were seized from the Mystras, some 50 miles offshore, Italian energy giant Eni SpA said on its Web site. Another Nigerian worker was reported to have been wounded in the leg, the statement said.

The Mystras, used for production, storage and offloading crude oil, is capable of producing 80,000 barrels of oil per day. An Eni spokeswoman refused further comment.

Militants have kidnapped more than 150 foreigners this year to press their demands for local control of oil revenues. The attacks since late 2005 have cut Nigeria's regular output by about 20 percent, helping send crude prices toward all-time highs.

Locals have for years demanded a greater share of the wealth in Africa's largest crude producer, and the region remains desperately poor despite its great natural bounty.

The government of President Umaru Yar'Adua has stepped up efforts to maintain calm in the Niger Delta, and violence has waned since he took power May 29. But the latest attacks could set back plans for formal talks between the government and the main armed groups.

A militant group, the Movement for the Emancipation of the Niger Delta, claimed responsibility for Friday's attack in an e-mail to The Associated Press.

Also this week, MEND said it was responsible for an attack Sunday on an offshore oil field operated by Royal Dutch Shell. Militants kidnapped seven workers — Nigerian, British, Croatian and South African — but released them after two days.

The group, which threatened last month to resume attacks after one of its leaders was arrested in Angola, vowed to continue the violence.

Petro-Canada is still planning major oil sands developments in Alberta, following announced changes to the province's royalty structure, although it is clear that the moves will mean higher costs, an executive said on Friday.

Imperial Oil Ltd., meanwhile, said it was still assessing the potential impact on its plans for the C$8 billion ($8.3 billion) Kearl oil sands project, also in northern Alberta.

Petro-Canada is conducting detailed engineering and design work on the C$26 billion Fort Hills oil sands mining development and the steam-driven MacKay River expansion, with decisions on funding expected next year.

"With what we've seen, that still is the right path for us to be taking, so we're still going full speed ahead to get to those decision points," Petro-Canada's vice-president, Andrew Stephens, said.

"There's no question that the decisions yesterday have had an impact on the economics, but what we're saying is: Let's keep working."

In the new fiscal regime, Alberta Premier Ed Stelmach rejected the idea of a new tax on oil sands production.

But the amount companies pay for oil sands projects before capital costs are recovered will range between 1 percent and 9 percent of revenues, with increases starting when oil trades at $55 a barrel and a cap set at $120 a barrel.

After capital costs are recovered, royalties will range from 25 percent to 40 percent of net profits.

Imperial spokesman Pius Rolheiser said the changes are "substantial" and will mean a jump in costs at Kearl, a project his firm is planning jointly with Exxon Mobil Corp.

"Before making a decision on project funding, we'll complete further evaluations and we will obviously take into account the higher royalties that will be imposed on Kearl," he said.

Imperial and Petro-Canada are among the partners in the Syncrude Canada Ltd. oil sands development. Rolheiser said his company supports negotiating with the Stelmach government over a transition from the development's current royalty structure.

Oil prices shot to an all-time high above $92 a barrel on Friday as the tumbling dollar and Nigerian output disruptions helped extend a rally that has lifted prices nearly 30 percent since August.

Worries that supplies may come up short ahead of the Northern Hemisphere winter have fueled the rise, drawing a fresh wave of speculative money from investors.

U.S. crude rose 61 cents to $91.07 a barrel by 1:45 p.m. EDT, off the record $92.22 struck during electronic trading earlier. Oil is closing in on its inflation-adjusted high of $101.70 seen over the course of April 1980, a year after the Iranian revolution and at the start of the Iran-Iraq war.

London Brent gained 62 cents to $88.10 a barrel.

"Fresh highs are now attracting fresh buying, especially following yesterday's violation of the futures highs just above the $90 level," said Jim Ritterbusch, president of Ritterbusch & Associates in Galena, Illinois.

Prices jumped past $90 a barrel after a U.S. government report on Wednesday showed a sharp drop in crude stocks in the world's biggest energy consumer.

Oil got a boost on Friday after a rebel attack on a oil rig in OPEC-member Nigeria operated by Italian firm ENI shut 50,000 barrels per day of production.

Traders were also eyeing new U.S. sanctions against Iran, the No. 4 oil exporter, which is add odds with the U.N. Security Council over its nuclear program. Washington accuses Tehran's Revolutionary Guard of spreading weapons of mass destruction.

TUMBLING DOLLAR

Unprecedented weakness in the U.S. dollar has been another factor supporting dollar-denominated commodities.

In anticipation that the U.S. Federal Reserve may cut interest rates next week, the dollar hit record lows against the euro and a basket of currencies Friday.

Moves by central banks to cut interest rates and pump billions of dollars into financial markets to ease a credit crunch have added fuel to oil's rally.

Oil's drive to record highs has stirred concern from consumer governments, and the administration of President George W. Bush said Friday oil prices were "way too high."

Analysts say the wider economic problems may be dragging down demand in the giant U.S. market, while there are some signs of a growth slowdown in China, the world's second largest consumer.

China's apparent oil demand grew at the slowest rate in 20 months in September, up just 0.3 percent from a year earlier.

Despite worries from big oil importers, members of the Organization of Petroleum Exporting Countries have said they are unlikely to hike production at a meeting next month in Saudi Arabia.

The cartel has agreed to increase output by 500,000 barrels per day starting November 1, and members insist prices are not being driven by a supply shortfall.

Data from Lloyd's Marine Intelligence Unit showed OPEC's oil exports, excluding Angola, jumped 1 million bpd in the first two weeks of October versus the last two weeks of September.

Imperial Oil Ltd and Exxon Mobil Corp turned heads in the oil industry in July with a nearly $600 million bid that won them a big exploration block in Canada's Beaufort Sea.

The hefty sum surprised observers. After all, it's been 17 years since Imperial, Canada's biggest oil producer and refiner, drilled a well in the icy Arctic waters.

In fact, only one other company, Oklahoma City-based Devon Energy Corp, has ventured back to Beaufort since the end of the Arctic exploration heyday in the 1970s and 1980s.

"Obviously, we wouldn't have bid the work program that we did if we didn't see some long-term exploration potential," Imperial spokesman Pius Rolheiser said.

"But it's highly exploratory in nature, high cost, high risk and lot of work needs to be done."

Record oil prices and growing struggles securing reserves in traditional producing regions have the world's oil industry starting to gaze north once again. But it's no stampede yet.

The prize is huge. Previous wells in the Beaufort and Arctic Islands found 25 trillion cubic feet of natural gas and 1.7 billion barrels of oil, according to government figures. Only a tiny fraction was ever produced.

Other, more recent, factors have put the Far North, where many companies made finds in the past by constructing artificial islands from gravel and ice, back into focus.

MORE OPEN WATER

Receding ice, blamed on global warming, means longer drilling seasons in areas requiring open water, like the Imperial-Exxon block, 120 km (75 miles) north of the mainland.

Such conditions allow more summer traveling time in the waters that make up the Northwest Passage, which means workers, equipment and supplies can be ferried about more freely.

"It's one fewer impediment against exploring for oil and gas in the north. Climate and ice have always been formidable foes for anyone who has wanted to do exploration," said Benoit Beauchamp, a geologist and executive director of the Arctic Institute of North America.

Also, the race to establish sovereignty at the North Pole has brought the untapped resources locked deep beneath Canada's ice back into national consciousness.

Prime Minister Stephen Harper announced in August an increased Arctic military presence after a Russian submarine planted a flag on the North Pole seabed amid increasing energy development in Russia's own North.

Oil bosses are not fretting though; any development is likely decades off, said Greg Stringham, vice-president of the Canadian Association of Petroleum Producers.

"I think that becomes more of a geopolitical question. It's not resource-driven," Stringham said. "There's potentially some resource under there but it's a long way into the future and we've got a lot more that's closer to development."

The major stumbling block for the closer Arctic reserves, oil officials and politicians say, is the lack of a pipeline to ship gas to consuming markets in Canada and the United States.

PIPELINE DELAYS

Imperial is leader of the industry consortium planning the C$16.2 billion Mackenzie Valley Pipeline, a project that has been hit with surging costs, lengthy regulatory delays and opposition from some Northwest Territories native groups.

The pipeline is aimed at tapping three large gas fields in the Mackenzie Delta that makes up part of the Beaufort coast. Those three, all discovered in the early 1970s, have reserves of 6 trillion cubic feet. The most optimistic predictions have the line in service by the middle of the next decade.

"Once you have this conduit in the ground to get gas to market, you'll see renewed interest in the Arctic," said Brendan Bell, former Northwest Territories' industry minister.

"Companies obviously recognize much of the world's energy resources are stored in the Arctic and they haven't been able to monetize that to date."

Partly fueled by government subsidies, companies drilled more than 400 wells North of Canada's mainland in the 1960s, '70s and '80s. According to the National Energy Board, the region contains 25 percent of Canada's gas reserves and 21 percent of conventional oil reserves.

Activity dried up in the 1990s when energy prices fell, then companies redoubled efforts to develop reserves in western Canada, off the East Coast and in Alberta's oil sands region.

Then in 2005 and 2006, Devon Energy drilled the $60-million Paktoa well in the shallow waters of the Beaufort, 180 km (112 miles) north of Inuvik, Northwest Territories, using a drill ship anchored to the seabed and surrounded by ice.

Devon found 240 million barrels of oil but not the trillions of cubic feet of gas it had targeted and there are no current plans to drill in the region again soon, company officials said.

Imperial and Exxon are still plotting where and when to drill. They committed to a well in the first five years of the nine-year license for the block, 120 km (75 miles) north of the mainland in water depths of 60-1,200 meters (200-3,900 feet).

Petro-Canada has stakes in one third of the significant discovery licenses in the Arctic Islands, including the Drake and Hecla fields on Melville Island. Reserves at the two are pegged at 6 trillion cubic feet.

But it has no plans to develop the assets any time soon, given the years of negotiations expected with government authorities, aboriginal groups and environmentalists.

"Not mention the costs and engineering challenges expected when operating in a climate known for long hours of darkness and extreme cold," Petro-Canada spokesman Kyle Happy said.

PetroSA, the state-owned oil company, has announced plans to invest about R50bn over the next six years in building a new crude oil refinery and a liquified natural gas receiving terminal.

If both projects are located in Coega, Eastern Cape, as is envisaged, they will represent a major boost for the economy. A state-owned refinery will secure SA's oil supplies and make a favourable contribution to the country's balance of payments.

CEO of PetroSA Sipho Mkhize told Parliament's minerals and energy committee yesterday that partners would be sought for a R39bn oil refinery which was expected to come on stream in 2014-15 with a capacity to produce about 200000 barrels of refined oil a day.

He said Minerals and Energy Minister Buyelwa Sonjica was awaiting the outcome of the feasibility studies -- likely to be concluded in 2009 -- before giving the project the green light.

PetroSA would be looking for an equity investor or a co- investor to either supply crude oil feedstock or take off some of the production. At a media briefing , Mkhize said that Sasol could participate if it wanted to.

PetroSA, which produced a net profit of R2,8bn in the year to end-March, has a cash pile of R10,7bn of its own that it can use for the project and is in negotiations with its holding company, the Central Energy Fund (CEF), about getting a dividend "holiday" over the next few years so it can accumulate more funds. Through the CEF, PetroSA has paid the government about R1,2bn in dividends in the past two years.

The planned refinery will contribute to greater security of energy supply for SA, which is forecast to need about 280000 more barrels a day by 2020.

The refinery project, dubbed Project Mthombo, is a direct response to the government's energy security master plan, which recommended that PetroSA procure about 30% of all crude oil consumed in SA.

"Based on the current rate of demand growth, the demand for fuel in SA will justify a new crude oil refinery within the next five to seven years. Once the technical specifications and commercial aspects of the project have been clarified, the final investment decision will be made around 2010-11," Mkhize said.

Coega was chosen as a tentative site over Saldanha Bay, Richards Bay and Newcastle. Mkhize estimated the project would generate about 1000 direct jobs, about 5000 indirect jobs during operations and about 10000 jobs during construction.

The South African Petroleum Industry Association welcomed the announcement, saying any effort to help address the shortfall of petrol supply in SA was crucial.

Executive director Connel Ngcukana said the shortfall in liquid fuel by the time the refinery came on stream in 2014 was expected to exceed 7-billion litres. This meant SA's increased importation of the refined product would be at a huge cost to the fiscus and have implications for the country's balance of payments.

Ngcukana questioned the location of the refinery, noting that the primary demand for liquid fuel was inland and that a refinery on the south coast presented problems in getting the product to its primary market.

" The decision could be linked to the need to provide jobs in the area and the large automotive industry in the region, but the planned volumes are too big and the demand is really inland," Ngcukana said.

Dodsal Hydrocarbons and Power (Tanzania) Pvt. Ltd. (a wholly owned subsidiary of Dodsal Resources) has signed a Production Sharing Agreement with Ministry of Energy and Minerals and Tanzania Petroleum Development Corporation for exploration of oil and gas for the RUVU block which is approximately 15,300 square kilometers towards the Eastern part of Tanzania.

Diversified group
Dodsal Resources is a new thrust for Dodsal Group in the energy sector for exploration of not only oil and gas but also mining of metals and minerals. The group which moved its headquarters from Mumbai in the year 2003 to Dubai is a global multinational with a range of activities in the Engineering, Procurement & Construction (EPC) in the energy sector, a developer of Infrastructure Projects, an Exploration and Mining Company for hydrocarbons and minerals & metals, trading and distribution and quick service restaurants.

Dodsal Resources has also secured a mining concession in Tanzania of over a 100 sq km area. A preliminary field survey of this area shows traces of gold and multi-metals. However a detailed exploratory study is under progress to determine the size of the reserves.
Dodsal Resources is also under active negotiations for several other Oil & Gas and Mining concessions in various countries of Africa.

Mr. Rajen Kilachand, Chairman & President and the owner of Dodsal Group stated that Dodsal Resources is a key strategic business for his group and he expects the size & potential of this business to equal or grow bigger than the existing Engineering and Construction business which is approximately US$ 2 Billion at present.

Dodsal's quality accolades
The Engineering & Construction arms of the business has also secured various awards for Health, Safety and Environmental management systems and are certified to OHSAS 18001:1999 and ISO 14001:2004 respectively. Over the years Dodsal has achieved Zero Lost Time Incident (Zero - LTI) frequency rates that are consistently much better than the acceptable internationally recognized averages. Recently, the Dodsal Group has been selected as the Indian Global Construction Company for the CONSTRUCTION WORLD - NICMAR AWARDS 2007 which will be awarded in Mumbai, India on 30th Oct 2007.

Clean Energy Fuels Corp. has entered into an LNG sales agreement with Spectrum Energy Services, LLC (SES), an Alaska limited liability company, to purchase, on a take-or-pay basis over a term of 10 years, 45,000 gallons per day of liquefied natural gas (LNG) from a plant to be constructed by SES in Ehrenberg, Arizona, which is near the California border. The plant is anticipated to be in full production in the summer of 2009.

The LNG from the plant will be used to help support Clean Energy’s supply agreements with customers in Arizona and California.

“Demand for natural gas for transportation is growing steadily, particularly in the Southwest, for the transit, refuse and emerging ports markets,” said Andrew J. Littlefair, Clean Energy president and CEO. “This new supply agreement will supplement our resources needed to fuel the growth.

“The Ports of Los Angeles and Long Beach alone have developed a plan that envisions the addition of 5,300 heavy-duty LNG trucks for goods movement at the ports within five years,” noted Littlefair. “Clean Energy has committed to be a major supplier to that initiative and already has LNG fueling stations under construction and design.”

Clean Energy is building its own LNG production plant in the California desert that is planned to begin delivering up to 160,000 gallons of LNG per day in late 2008. The plant is designed to be able to increase production up to 240,000 gallons of LNG per day as demand grows further.

About Clean Energy

Clean Energy is based in Seal Beach, Calif., and is the leading provider of natural gas for transportation in North America. It has a broad customer base in the refuse, transit, shuttle, taxi, intrastate and interstate trucking, airport and municipal fleet markets, fueling more than 14,000 vehicles daily at strategic locations across the United States and Canada. Information at: www.cleanenergyfuels.com.

Forward-Looking Statement

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 that involve risks, uncertainties and assumptions. Actual results and the timing of events could differ materially from those anticipated in these forward-looking statements, including the ultimate timing and production capacity of the new plant and the demand for LNG in the Southwestern United States, and other factors more fully described in the company’s recent Form 10-Q and Initial Public Offering Prospectus filings with the Securities and Exchange Commission. The forward-looking statements made herein speak only as of the date of this press release and the company undertakes no obligation to publicly update such forward-looking statements to reflect subsequent events or circumstances.

Petroleum pipeline operator Teppco Partners LP said Thursday third-quarter profit grew 16 percent, due in part to increased transportation demand for diesel fuel and gasoline, as well as continued volume growth.

The company reported income of $47.6 million, or 44 cents per unit, compared with $41.1 million, or 39 cents per unit, in the year-ago period.

Earnings before interest, taxes, depreciation and amortization -- less gains on asset sales -- rose 13 percent to $114.4 million from $101.6 million in the same period last year.

Revenue for the quarter rose slightly to $2.58 billion from $2.57 billion in the third quarter of 2006.

Analysts polled by Thomson Financial, on average, estimated earnings of 45 cents per share on revenue of $2.42 billion.

The company attributed the positive growth to increased transportation demand for diesel fuel and gasoline to the Midwest and continued volume growth at its Jonah Gas Gathering system.

Additionally, most of Teppco's business segments reported revenue gains. The increase in revenue was offset by a modest increase in costs and expenses.

Shares rose 40 cents to $40.65 in midday trading.

CNX Gas Corporation had net income for the quarter ended September 30, 2007 of $31.3 million, or $0.21 per diluted share. This compares to net income of $37.6 million, or $0.25 per diluted share for the quarter ended September 30, 2006. Production was 14.4 billion cubic feet (Bcf), or 157.0 million cubic feet (MMcf) per day. This compares to 14.4 Bcf, or 156.8 MMcf per day in the year- ago quarter.

Nicholas J. DeIuliis, president and chief executive officer, said, "During the quarter, we maintained our stellar safety record, showed continued unit cost improvement compared to the second quarter, and continued to execute our 346-well drilling program. We set daily production records with our Virginia frac production and our Mountaineer production. We also advanced the start-up date of our Nittany project from December 31 to November 1. These positives were offset during the quarter by the deferral of some gob gas production associated with the idled Buchanan Mine. Fortunately, our production associated with active mining at Buchanan should rebound to normal levels shortly after the mine resumes coal production."

"Additionally," Mr. DeIuliis continued, "We're beginning to formulate our 2008 drilling program. While not yet finalized, I think it's reasonable to expect that we will drill over 500 wells next year, which would be a 44% increase from the 2007 program. A plan of this size will enable CNX Gas to continue to accelerate the monetization of our tremendous asset base and achieve 2008 production of 73 Bcf."

In early October, after the end of the 90-day deductible period, CNX Gas became eligible to file a claim with its insurance carriers for business interruption insurance pursuant to the Buchanan Mine idling. Therefore, earnings impacts to CNX Gas that occur beyond that date may be mitigated by insurance recovery.

Duncan Energy Partners L.P. today announced its financial results for the three and eight months ended September 30, 2007. The eight-month period ended September 30, 2007 reflects operations since the completion of the initial public offering (“IPO”) of Duncan Energy Partners on February 5, 2007. For financial reporting purposes, the effective date of the IPO was February 1, 2007. The partnership reported net income of $4.5 million for the third quarter of 2007, or $0.22 per common unit on a fully diluted basis.

Results of operations following the completion of the IPO are reported separately from those of the predecessor of Duncan Energy Partners (“Duncan Energy Partners Predecessor”). There are a number of agreements and other items that went into effect at the time of Duncan Energy Partners’ IPO that affect the comparability of its operating results with the historical operating results of Duncan Energy Partners Predecessor. See “Basis of Presentation of Financial Information” within this release for a summary of these differences.

FIND MORE NEWS : Duncan EnergY

Russia's gas monopoly Gazprom on Thursday chose Norway's StatoilHydro ASA to participate in a US$30 billion (euro21 billion) gas project in the Barents Sea that is crucial for Russia if it is to meet rising demand for natural gas at home and abroad.

StatoilHydro will take a 24 percent stake in an operating company that will plan, finance and build the first stage of the technically daunting Shtokman gas field, which could eventually produce up to 100 billion cubic meters of gas per year. France's Total SA has a 25 percent stake, while state-controlled OAO Gazprom will keep 51 percent.

Gazprom will also retain ownership of Shtokman's reserves, estimated at 3.7 trillion cubic meters of gas, the equivalent of six years of Russia's current annual production and enough to meet U.S. demand for six years.

"We have gigantic reserves in the Barents Sea, and our Norwegian partners have good experience in carrying out gas production and transportation in the harsh climate conditions in the north," Gazprom CEO Alexei Miller said in a statement.

Early on Thursday, President Vladimir Putin personally called Norwegian Prime Minister Jens Stoltenberg to inform him that StatoilHydro was chosen for the project -- indicating the high degree of Kremlin involvement in the project.

StatoilHydro -- formed earlier this month when Norsk Hydro sold its oil and gas division to its larger Norwegian rival Statoil -- beat out U.S.-based ConocoPhillips for the stake despite plans for Shtokman gas to be delivered to the North American market in liquefied form.

Michael Emerson, senior researcher at the Center for European Policy Studies in Brussels, said he did not rule out that unresolved geopolitical issues between Russia and the United States -- such as Washington's plans to build a missile shield in Eastern Europe -- influenced the decision.

But the deal was signed Thursday to coincide with Putin's visit to Portugal this week, where he will attempt to forge a new trade deal with the European Union, analysts said.

"By bringing StatoilHydro on board today, Putin is showing he is ready to give the green light to the project, which Europe needs just as much as Russia since it will run into supply problems around 2012," said Chris Weafer, chief strategist at UralSib, a Russian investment bank.

StatoilHydro is 62.5 percent owned by the Norwegian state, which is not a member of the European Union.

EU officials have expressed increasing alarm in recent months about Russia's stagnant gas production capacity at a time when energy consumption is on the rise. Russia, for its part, is annoyed that the EU's new draft energy charter targets Gazpom's investments into EU energy production and infrastructure, which Brussels wants to separate.

"Putin will be looking for a softening of the EU's stance in regard to this charter," said Weafer, adding that Moscow would also like to see progress on a new strategic trade agreement with the EU that would free up trade and investment.

Russia currently provides 30 percent of the EU's oil imports and 42 percent of its natural gas imports.

Gazprom said in a statement that the first shipments of Shtokman gas would be made in 2013, when production would reach 23.7 billion cubic meters.

The field is projected to have an active life of more than 50 years, with gas output peaking at some 97 billion cubic meters for 25 years, according to ZAO Sevmorneftegaz, the Gazprom-controlled company that owns the license to the field.

According to plans, gas extracted from beneath the seabed will be piped 600 kilometers to the shore, and then south to connect to the Nord Stream pipeline, which, when completed, will deliver gas directly from Russia to Germany beneath the Baltic Sea.

Emerson said that Russia's opting to cooperate with the Norwegians is "reasonable."

"They're right next door, they have the technology for this type of thing, and they share an undemarcated zone with Russia in the area," he said.

Norwegian Oil Minister Aaslaug Haga stressed that StatoilHydro has "unique competence" in working on the northern continental shelf and extensive experience in Russia.

Statoil developed Snoehvit, the first offshore field in the Barents Sea. The company had to develop much of the technology needed to produce the gas in harsh Arctic conditions, and in an environment similar to Shtokman. The project has no facilities above the ocean surface and is remotely controlled from land, by a 155-kilometer cable.

In taking over Norsk Hydro's oil and gas unit, the new StatoilHydro also acquired the technology and expertise that went into building the giant Ormen Lange natural gas field in the Norwegian Sea, in which all of the installations are underwater and had to be placed on the extremely steep and uneven area of the sea floor and be able to withstand exceptional currents, extreme wind and wave conditions and subzero temperatures on the sea floor.

Associated Press

Analysts at Wall Street Access reiterate their "hold" rating on Occidental Petroleum , while raising their estimates for the company. The target price has been raised from $65 to $70.

In a research note published this morning, the analysts mention that the company has reported its quarter EPS from continuing operations ahead of the estimates. Occidental Petroleum’s chemicals segment earnings were higher than expected and corporate expenses were lower than expected, the analysts say. The company is bidding against many larger integrated companies in the UAE to obtain the development right for the 30 trillion cubic feet Shah and Bab fields, Wall Street Access adds. The WTI grade oil price estimates for 2007, 2008 and 2009 have been revised to $70 per barrel, $63 per barrel and $60 per barrel, respectively. The GAAP EPS estimate for 2007 has been raised from $5.45 to $6.15.

Alberta's Premier, Ed Stelmach, avoided commenting directly about the government's response to proposed hikes to oil and gas royalty rates Wednesday, only promising that the decision will offer stability and predictability to energy companies.

Toward the end of a television address to the province, Stelmach said his government recognized Alberta's future lies in the oil sands and coal bed methane as conventional oil and gas reserves decline. The government is "ready to take decisive action" and the new royalty framework will support this, he said.

The new regime will provide the "stability and predictability business needs and time to adjust to the changes," Stelmach said, as well as offering Albertans their fair share of the revenues.

Last month, a government-appointed panel recommended raising oil and gas royalties by 20%, or C$2 billion, a year, after concluding that Albertans haven't received a fair share of their province's vast resources for quite some time.

Stelmach and Alberta's energy minister Mel Knight will present the government's formal response Thursday at 5 p.m. EDT.

The panel targeted the oil sands sector in particular, where companies have proposed more than C$100 billion in project proposals, eager to feed U.S. demand and spurred on by robust oil prices and tightening access to resources elsewhere. It also proposed increasing royalties on the conventional oil and natural gas sector, the latter of which is already struggling with low prices.

Since then, Alberta's energy industry has unleashed a barrage of criticism, saying the panel relied on flawed data which don't reflect the cost pressures facing the sector, and threatening to pull investment from the province.

Recent analyst speculation reckons the government will soften the more contentious proposals in light of industry criticism. These include raising net royalty rates once oil sands projects recoup capital costs to 33% from the current 25%, and a new oil sands tax linked to oil futures prices.

Stelmach added that the current royalty regime had created "one of the most successful economies of all time."

Majestic Oil & Gas, Inc, a United States Public Company whose securities are qualified for quotation on the Over the Counter Bulletin Board today announced that the Company is drilling the Vandenbos #19-1 well, a wildcat natural gas well.

This exploration wildcat natural gas well is being drilled in Section 19-T29N-R5W, Pondera County, Montana. The projected depth of this well is 2,350 feet with the primary objective being the 4th Bow Island "C" Sandstone. Other potential zones of interest are the Colorado Shale, Blackleaf Sandstone and the 1st, 2nd and 3rd Bow Island Sandstones.

Majestic Oil & Gas, Inc owns a 25% working interest in this wildcat natural gas well. The well is currently being drilled and operations commenced on Sunday, October 21, 2007. The Company will release results as soon as drilling operations are complete.

Atlas America, Inc. announced today that its Board of Directors has declared a cash dividend of $0.05 per share of common stock, payable on November 14, 2007, to shareholders of record on November 7, 2007.


Atlas America, Inc. owns an approximate 48% common unit interest and all of the Class A and management incentive interests in Atlas Energy Resources, LLC, and an 83% interest in Atlas Pipeline Holdings, L.P. , a limited partnership which owns the general partner interest in Atlas Pipeline Partners, L.P. (NYSE:APL - News), and all the incentive distribution rights and 5.5 million common units of APL. For more information, please visit our website at www.atlasamerica.com, or contact Investor Relations at bbegley@atlasamerica.com.


Contact:

Contact:
Brian Begley
Investor Relations
Atlas America, Inc.
1845 Walnut St. – Suite 1000
Philadelphia, PA 19103
(215) 546-5005
(215) 553-8455 (fax)


Source: Atlas America, Inc.

Lions Petroleum Inc. The company has signed a $600,000 USD financing agreement with terms and conditions to be announced upon completion.

These funds will be used to acquire producing natural gas properties in the United States.

Lions Petroleum Inc. is a Delaware Corporation. Lions has a working interest in 2 producing gas wells in Lavaca county, Texas and oil and gas leases in the Williston Basin located in South Saskatchewan. The Company is currently seeking additional projects throughout North America.

SAFE HARBOR

The information provided in this Press Release does not constitute an offer or a solicitation of an offer for the purchase or sale of any shares or other securities of Lions Petroleum Inc. There are substantial risks associated with investing in development stage energy companies.



No Securities Commission or similar authority has in any way approved any of the information contained in this press release.


Contact:

Contacts:
Lions Petroleum Inc.
Mike Tymo
Investor Relations
North American Toll Free: 1-866-669-1533 or (604) 669-1533


Source: Lions Petroleum Inc.

Nepal hiked the prices of petroleum products to meet fuel shortage and reduce losses at the state firm. The price of petrol has been increased by Nepalese rupees 6, diesel and kerosene by rupees 3 per liter and the price of LPG by rupees 200 per cylinder. However, the price of aviation fuel remains unchanged for now.

The hike is expected to reduce Nepal Oil Corporation's monthly losses to rupees 70 million. It was losing rupees 400 million every month.

Protesting against the price hike, Maoist rebels partially stopped transport on Thursday.

Sweden's Lundin Petroleum AB on Thursday said it made a significant oil discovery with the first well it drilled as an offshore operator off Norway.

The company estimated the size of the reservoir at between 65 million and 190 million barrels of recoverable oil, but that more testing and wells were needed to determine a more precise estimate. It said there could be more oil in separate reservoirs at the find.

"We are very excited to have made an oil discovery with our first operated exploration well in Norway. Our initial analysis is that the field will be commercial and has the potential to be a significant development on the Norwegian Continental Shelf," said Ashley Heppenstall, Ludin's president and chief executive.

The find was made about 155 miles northwest of the southwestern Norway port of Stavanger. In a separate news release, the Norwegian Petroleum Directorate said the discovery was made about 17 miles east of a discovery called Gudrun, made by the state-controlled StatoilHydro ASA oil company.

Along with a 50 percent stake, Lundin was awarded the right to operate the exploration block in 2004 as part of a Norwegian government drive to encourage the development of new finds near existing offshore fields.

Linking new finds to already producing fields can significantly cut development costs, and help shore up Norway's slowly dwindling offshore oil production.

In addition to Lundin, the small Norwegian oil company Revus Energy ASA has a 30 percent stake and RWE-DEA Norge AS, a Norwegian subsidiary of Germany's RWE AG, has 20 percent.

www.lundin-petroleum.com

Oil futures jumped to a record above $90 a barrel Thursday on news that OPEC production increases aren't coming as fast as expected and that the cartel won't announce new output quotas when it meets next month.

Prices were already higher on growing concerns about conflict in the Middle East and declining supplies of crude in the U.S. when Oil Movements, a company that tracks oil tanker traffic, reported that crude shipments from Organization of Petroleum Exporting Countries members will grow more slowly than anticipated through early November, according to Dow Jones Newswires.

Meanwhile, OPEC Secretary General Abdalla el-Badri told The Wall Street Journal Asia that the cartel is not in discussions to boost production by 500,000 barrels. El-Badri's comments counter rumors that Saudi Arabia is pushing for a production increase. In September, OPEC bowed to Saudi pressure and announced a production increase of 500,000 barrels a day, effective Nov. 1.

"It shows a little drama in the cartel," said Phil Flynn, an analyst at Alaron Trading in Chicago.

Light, sweet crude for December delivery rose $2.74 to $89.84 a barrel on the New York Mercantile Exchange after rising as high as $90.10 earlier, a trading record just above the previous mark of $90.07.

Crude futures added to gains achieved in the early morning hours Thursday when Lebanese troops fired on Israeli warplanes. A conflict between Israel and Lebanon wouldn't itself have much impact on oil supplies, but traders worry that any hostilities in the Middle East would eventually draw in big oil producers such as Saudi Arabia and Iran.

Energy traders also remain concerned that a threatened incursion by Turkish armed forces into Iraq in search of Kurdish rebels would cut oil supplies out of northern Iraq.

On Wednesday, crude prices jumped sharply after the Energy Information Administration reported that oil inventories fell 5.3 million barrels last week, much more than analysts expected. That report reversed a three-day downward price trend, and put energy traders back in a bullish mood, analysts said.

"Yesterday's EIA report pretty much changed the personality of the market," said Jim Ritterbusch, president of Ritterbusch and Associates in Galena, Ill.

In other Nymex trading, November gasoline rose 7.1 cents to $2.2185 a gallon, and November heating oil added 5.19 cents to $2.3939 a gallon.

November natural gas rose 16.3 cents to $7.135 per 1,000 cubic feet as traders shrugged off a government report that inventories grew by 68 billion cubic feet last week, more than analysts had expected, and focused instead on forecasts for colder weather in the Midwest and Northeast and the possibility that a storm system in the western Atlantic could develop into tropical strength as it moves into the Caribbean Sea.

In London, December Brent crude rose $2.71 to $87.08 a barrel on the ICE Futures exchange.

At the pump, gas prices slipped 0.2 cent overnight to a national average of $2.82 a gallon, according to AAA and the Oil Price Information Service.

Associated Press.

Oil prices are twice as likely to reach $100 a barrel by Christmas than Chelsea winning the Premier League this year, bookmakers said on Thursday.

Financial bookmaker Cantor Index put the odds at 5-2 that U.S. crude futures will rally to $100 a barrel by December 25.

U.S. oil prices surged to a lifetime high of $90.07 last Friday, driven by tight supplies, fund buying, a weak dollar and geopolitical tensions.

"This is slightly outside. If we were in this situation five times, it would happen only twice," said Daniel Malsbury, commodities trader for Cantor Index.

Bookmakers said the odds of $100 oil were better than the Indianapolis Colts winning the 2008 Super Bowl.

But it was in parity to any Colorado Rockies baseball player winning this year's World Series Most Valuable Player award.

Oil futures jumped back above $89 a barrel Thursday on news that OPEC production increases aren't coming as fast as expected and that the cartel won't announce new output quotas when it meets next month.

Prices were already higher on growing concerns about conflict in the Middle East and declining supplies of crude in the U.S. when Oil Movements, a company that tracks oil tanker traffic, reported that crude shipments from Organization of Petroleum Exporting Countries members will grow more slowly than anticipated through early November, according to Dow Jones Newswires.

Meanwhile, OPEC Secretary General Abdalla el-Badri told The Wall Street Journal Asia that the cartel is not in discussions to boost production by 500,000 barrels. El-Badri's comments counter rumors that Saudi Arabia is pushing for a production increase. In September, OPEC bowed to Saudi pressure and announced a production increase of 500,000 barrels a day, effective Nov. 1.

"It shows a little drama in the cartel," said Phil Flynn, an analyst at Alaron Trading Corp. in Chicago.

Light, sweet crude for December delivery rose $2.37 to $89.47 a barrel on the New York Mercantile Exchange.

Crude futures added to gains achieved in the early morning hours Thursday when Lebanese troops fired on Israeli warplanes. A conflict between Israel and Lebanon wouldn't itself have much impact on oil supplies, but traders worry that any hostilities in the Middle East would eventually draw in big oil producers such as Saudi Arabia and Iran.

Energy traders also remain concerned that a threatened incursion by Turkish armed forces into Iraq in search of Kurdish rebels would cut oil supplies out of northern Iraq.

On Wednesday, crude prices jumped sharply after the Energy Information Administration reported that oil inventories fell by 5.3 million barrels last week, much more than analysts expected. That report reversed a three-day downward price trend, and put energy traders back in a bullish mood, analysts said.

"Yesterday's EIA report pretty much changed the personality of the market," said Jim Ritterbusch, president of Ritterbusch and Associates in Galena, Ill.

Oil prices are back within striking distance of their $90.07 record set last week.

In other Nymex trading, November gasoline rose 6.01 cents to $2.2076 a gallon, and November heating oil added 4.53 cents to $2.3873 a gallon.

November natural gas rose 23.4 cents to $7.206 per 1,000 cubic feet as traders shrugged off a government report that inventories grew by 68 billion cubic feet last week, more than analysts had expected, and focused instead on forecasts for colder weather in the Midwest and Northeast and the possibility that a storm system in the western Atlantic could develop into tropical strength as it moves into the Caribbean Sea.

In London, December Brent crude rose $2.30 to $86.67 a barrel on the ICE Futures exchange.

At the pump, gas prices slipped 0.2 cent overnight to a national average of $2.82 a gallon, according to AAA and the Oil Price Information Service.

Nigeria's Supreme Court removed Celestine Omehia as governor of Nigeria's richest oil state on Thursday in the fourth major legal indictment of polls in April.

The elections were meant to mark a democratic milestone for Africa's most populous country, but were so marred by fraud and violence that outside observers said they were "not credible."

The Supreme Court ruled Rotimi Amaechi, who won the primaries for the ruling People's Democratic Party (PDP) in December, but was removed from the ballot, was the lawfully elected governor of Rivers state.

The electoral body put Omehia's name on the ballot after the PDP removed Amaechi -- a former speaker of the Rivers state house of assembly -- on the basis on an indictment for corruption issued by the federal government, which the Supreme Court said was invalid.

"In the eyes of the law, the appellant (Amaechi) remains the candidate of the PDP and is deemed to have won the election and should be so sworn in immediately," Aloysius Katsina-Alu said, reading the unanimous decision of the seven-man panel of judges.

The ruling has the potential to spark violence in Nigeria's biggest oil producing state, where turf wars between heavily armed gangs with political ties have killed dozens this year.

Hundreds of Amaechi supporters drove round the streets of Port Harcourt, the Rivers state capital, in cars and motorcycles hooting their horns in jubilation.

Troops patrolled the city in pick-ups and armored personnel carriers, while two military trucks were stationed at the gates of the state government headquarters.

The federal government said it had directed all agencies to implement the ruling and called on the people of Rivers to accept the judgment in good faith.

LOOTING

State governors have considerable power in Nigeria and control about half of oil revenues. Rivers receives a greater share of the cake than any other state, but civil society groups say much of it is looted by corrupt officials.

The Supreme Court ruling was the latest in a string of electoral upsets by Nigeria's judiciary, vindicating reports by independent monitors and opposition parties of widespread malpractice by the ruling party and electoral body.

The opposition Action Congress party hailed the ruling and said the "house of lies" built by the ruling party and the electoral body was gradually being dismantled.

"We call on Nigerians who feel justifiably short-changed by the charade of the April elections to continue to be patient while the election tribunals handle the various petitions before them," the party said in a statement.

Last Saturday, another court nullified the election of Saidu Usman Dakingari, a son-in-law of President Umaru Yar'Adua, as governor of the northwestern state of Kebbi because he was not a member of the PDP when he was nominated as the candidate.

In the central state of Kogi earlier this month, a court nullified the election of Ibrahim Idris as governor because the electoral body removed the name of a key opposition candidate from the ballot.

In June, the Supreme Court ordered a close ally of former President Olusegun Obasanjo to step down because the election that made him governor of southeast Anambra state was illegal and the incumbent still had three years left of his tenure.

Yar'Adua is also facing a legal challenge to his victory. The opposition has given evidence to the tribunal including what it said were three different official election results.

Oil futures rose Thursday on growing concerns about conflict in the Middle East and declining supplies of crude in the U.S.

Prices jumped in the early morning hours after Lebanese troops fired on Israeli warplanes. A conflict between Israel and Lebanon wouldn't itself have much impact on oil supplies, but traders worry that any hostilities in the Middle East would eventually draw in big oil producers such as Saudi Arabia and Iran.

Energy traders also remain concerned that a threatened incursion by Turkish armed forces into Iraq in search of Kurdish rebels would cut oil supplies out of northern Iraq.

The uneasiness about the Middle East helped crude futures add to Wednesday's gains, which followed an Energy Information Administration report that showed oil inventories fell by 5.3 million barrels last week, much more than analysts expected. That report reversed a three-day downward price trend, and put energy traders back in a bullish mood, analysts said.

"Yesterday's EIA report pretty much changed the personality of the market," said Jim Ritterbusch, president of Ritterbusch and Associates in Galena, Ill.

Light, sweet crude for December delivery rose $1.16 to $88.26 a barrel on the New York Mercantile Exchange. November gasoline rose 2.5 cents to $2.1725 a gallon, and November heating oil added 1.5 cents to $2.357 a gallon on the Nymex.

Other geopolitical developments were also supporting energy prices, analysts said, including the Bush administration's announcement of harsh new sanctions against Iran and an attack by rebels from Darfur on an oil field in a neighboring Sudanese region.

The weather also was a concern; three Mexican ports that export energy commodities to the U.S. were closed due to a storm.

November natural gas fell 6.4 cents to $6.908 per 1,000 cubic feetdue to high inventories and moderate weather forecasts.

In London, December Brent crude rose $1.08 to $85.45 a barrel on the ICE Futures exchange.

At the pump, gas prices slipped 0.2 cent overnight to a national average of $2.82 a gallon, according to AAA and the Oil Price Information Service.

Government economic reports sent energy investors mixed signals on Thursday. Sales of new homes jumped unexpectedly in September, the Commerce Department said, countering a report on Wednesday that showed existing home sales dropped sharply in the same month. Also on Thursday, the Labor Department said the number of people filing new unemployment claims last week fell. But a separate Commerce Department report said orders for big-ticket manufactured goods dropped an unexpected 1.7 percent last month.

Energy traders closely watch economic reports and the stock market for signs the economy might be cooling, which would reduce demand for oil and petroleum products. The Dow Jones industrial average recovered from earlier losses Thursday on the new home sales report. But analysts remain wary of stocks' direction after last Friday's 366-point decline, which contributed to oil futures' losses earlier this week.

"Lest we get too starry-eyed, a major decline in the equity markets could still short-circuit any rally in energy," said Edward Meir, an analyst at MF Global UK Ltd., in a research note.

Oil and gas giant BP PLC agreed Thursday to pay $373 million in fines and restitution to end investigations into whether it manipulated energy markets and violated environmental laws, the Justice Department said.

Additionally, four former BP employees were indicted by a federal grand jury in Chicago on 20 counts of mail and wire fraud charges connected to the price-fixing scheme.

BP, Europe's second-largest energy company, will pay an estimated $50 million as part of an agreement to plead guilty for violating the Clean Air Act as a result of a 2005 explosion at its Texas City refinery that killed 15 employees and injured more than 170 others.

Additionally, it will pay $20 million in criminal fines and restitution to the state of Alaska and the National Fish and Wildlife Foundation for pipeline leaks of crude oil that polluted tundra and a frozen lake in Alaska.

The rest of the fines aim to punish BP for conspiring to manipulate propane prices.

Federal investigators have been looking at whether BP traders tried to pump up profits by cornering the propane market, driving spot prices in February 2004 as high as 94 cents a gallon in places like New York, Pennsylvania and Illinois.

Investigators alleged that traders at BP Products North America Inc. bought massive quantities of propane to be delivered over a pipeline that starts in Texas and then withheld supplies, forcing other buyers in the wholesale market to pay an unnaturally high premium.

The over-the-counter market includes trades conducted on the phone or electronically in products not listed on exchanges. In the end, BP did not profit because the financial benefits of the scheme were outweighed by the unexpectedly huge costs associated with carrying it out.

BP also is grappling with fallout of earlier problems, such as the Alaskan oil spill and the refinery blast that have resulted in ongoing higher maintenance costs.

BP told The Associated Press the company has cooperated with authorities and will continue to do so. It declined further comment.

Lucas Energy, Inc., a U.S. based independent oil and gas company, is pleased to announce it has acquired a major stake in Bonanza Oil & Gas Inc., a Texas based company engaged in the production and development of oil and gas reserves, as well as the development and evaluation of 3D seismic programs.

Lucas Energy has exchanged its stake in the ApClark prospect, an oil and gas property covering approximately 6,700 acres located in the ApClark field in Southwestern Borden County, Texas, for 3,000,000 shares of Bonanza Oil & Gas representing a 24.6% stake in the company. Lucas intends on immediately divesting of 1/2 of the shares in a private transaction to bring its position in Bonanza to 12.3%.

``We are pleased with our investment in Bonanza and are confident it will provide a substantial ROI for Lucas,'' commented James Cerna Jr., CEO of Lucas Energy Inc.

Bonanza Oil & Gas is led by a team of industry veterans and holds assets ranging from wholly owned prospects to working interests in producing oil wells as well as a large seismic library.

About Lucas Energy, Inc.

Lucas Energy, Inc. (OTC BB:LUCE.OB - News) is an independent crude oil and gas company building a diversified portfolio of valuable oil and gas assets in the United States. The company is focused on identifying underperforming oil and gas assets, which are revitalized through a meticulous process of evaluation, application of modern well technology, and stringent management controls. This process allows the company to increase its reserve base and cash flow while significantly reducing the risk of traditional exploration projects. The Company's headquarters are located at 3000 Richmond Avenue, Suite 400, Houston, Texas 77098.

The Lucas Energy logo is available at http://www.primenewswire.com/newsroom/prs/?pkgid=4192

This Press Release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Act of 1934. A statement identified by the words ``expects,'' ``projects,'' ``plans,'' ``feels,'' ``anticipates'' and certain of the other foregoing statements may be deemed ``forward-looking statements.'' Although Lucas Energy believes that the expectations reflected in such forward-looking statements are reasonable, these statements involve risks and uncertainties that may cause actual future activities and results to be materially different from those suggested or described in this press release. These include risks inherent in the drilling of oil and natural gas wells, including risks of fire, explosion, blowout, pipe failure, casing collapse, unusual or unexpected formation pressures, environmental hazards, and other operating and production risks inherent in oil and natural gas drilling and production activities, which may temporarily or permanently reduce production or cause initial production or test results to not be indicative of future well performance or delay the timing of sales or completion of drilling operation.


Contact:

Lucas Energy, Inc.
Investor Relations:
Richard Angle
(866) 513-5823 (LUCE)
angle@lucasenergy.com
www.lucasenergy.com

Source: Lucas Energy

Delta Petroleum Corporation Provides Update on Operating Activities, Budget and Production Forecasts and Piceance Basin Acquisition / Property Trade.

Delta Petroleum Corporation (NASDAQ:DPTR), an independent energy exploration and development company ("Delta" or the "Company"), today provided the following update regarding its production, drilling and other operating activities.

OPERATIONS UPDATE

Development Projects Vega Unit and North Vega, Piceance Basin, CO, Avg. 50 - 100% WI - The Company continues to develop the Vega Unit area with four DHS drilling rigs -- two rigs in the Vega Unit and two additional rigs on the North Vega acreage. The Company's concentrated development program has resulted in noticeable recent accomplishments, including a decrease in the number of days required to drill wells, reduced well completion costs and increased average production rates through better stimulation techniques. Management is pleased with recent performance in this area, where significantly better individual well economics have been achieved. The Company also believes that increased activity should allow well costs to be reduced further. In the Vega area, the Company has 34 wells producing and 20 wells drilled and waiting on completion. The Vega Unit wells have the capacity to produce up to an aggregate of 30 million cubic feet per day (Mmcf/d), but are currently restricted to 20 Mmcf/d as major pipelines are temporarily full due to seasonal maintenance schedules. Production capacity from the Vega Unit and the North Vega area is expected to reach 40 - 45 Mmcf/d by year end.

Cowboy Field, DJ Basin, WY, 70% - 100% WI - Current production from the Cowboy field approximates 1,100 barrels of oil per day (Bo/d). The Company is drilling its 11th well in the field, which should be completed by mid-October, and has briefly halted its development drilling program while the results of a 3D seismic survey are processed and interpreted. The 3D survey will be used to further delineate field size.

Copper Mountain Unit, Wind River Basin, WY, 50-100% WI - The Company will begin drilling the West Madden Federal 34-24 with DHS Rig #17 in early October and will continue to test the Lower Ft. Union intervals.

Midway Loop Area, SE Gulf Coast, TX, ~ 10% - 55% WI - The Company drilled and completed the Dickens A2-14 (45% WI) and the Woods A-82 (49% WI) with initial production rates of 14 Mmcf/d with 1,500 barrels of condensate per day (Bc/d), and 5 Mmcf/d with 700 Bc/d, respectively. The Company is drilling the Baxter A-141 and the Estes 01, and results from these drilling activities should become available during the fourth quarter.

Newton Field, SE Gulf Coast, TX, 100% WI - The Roughneck 01, a shallow Frio formation well, recently began production and sales at a rate of 1,300 Mcf/d. The Company is currently drilling the Ares 01, which is anticipated to reach total depth later this month, and plans at least two additional shallow prospects.

New Drilling Ventures Greentown Project, Paradox Basin, UT, 70% WI - The Company is drilling the Greentown Federal 35-12 and the Federal 28-11. Completion results are expected to be announced in the fourth quarter.

Central Utah Hingeline Project, UT, 65% WI - The Company has received the drilling permit and is building the location for the Federal 23-44 well on the Parowan prospect located in Iron County, UT. The well should commence drilling within the next 10 days and should reach its primary objective in 30 - 45 days and total depth within 60 - 75 days.

Columbia River Basin - The Company is attempting to secure a working interest partner in order to begin drilling operations on the Gray 33-23 in the fourth quarter.

DRILLING CAPITAL EXPENDITURE AND PRODUCTION GUIDANCE The Company has revised its 2007 drilling capital expenditure budget to a range of $245 - $255 million from the previously provided range of $250 - $275 million. The rationale for this drilling budget revision does not pertain to the economics or the operational results of the Company's development and exploration projects. Moreover, better drilling efficiencies will allow the Company to drill more wells with the same capital expenditures. Production is expected to continue to increase in spite of minor reductions in drilling capital expenditures. The Company reaffirms its previously provided production range for the quarter ending September 30, 2007 of 4.4 to 4.7 billion cubic feet equivalent (Bcfe), with actual production likely to be in the middle of the range. Fourth quarter 2007 production should rise 8% - 12% above third quarter levels.

The current reduction in drilling capital expenditures is primarily related to lower natural gas prices in the Rocky Mountain region, which are expected to be temporary, and the Company's desire to maintain comfortable levels of liquidity in the current market. It is the Company's intention to maintain adequate liquidity throughout the remainder of 2007 and 2008 by exercising appropriate drilling capital expenditure discipline. Drilling capital expenditures in 2008 are projected to remain flat relative to the revised 2007 budget. The Company is projecting meaningful production and reserve growth in 2008, with production expected to increase 40% to 60% from 2007 levels.

ACQUISITION AND DIVESTITURE Garden Gulch, Piceance Basin, CO - Delta has entered into an Asset Exchange Agreement with Teton Energy Corp. ("Teton") (AMEX:TEC), whereby the Company has agreed to acquire an additional 12.5% working interest in the Garden Gulch field in the Piceance Basin. Under the agreement, the Company will pay $33 million in cash and transfer ownership of substantially all of its acreage position and production in the eastern DJ Basin (Washington and Yuma Counties, Colorado) to Teton. The DJ Basin properties being transferred to Teton do not include the Company's Cowboy field located in Laramie County, Wyoming. This transaction will bring the Company's interest in the Garden Gulch field to a 31.1% working interest with an associated 24.5% net revenue interest. The Company will realize a net increase of 1.5 Mmcf/d of production, and 75 Bcfe in proved and unproved reserves at closing as a result of the transaction. Closing is scheduled for October 1, 2007.

CHANGES TO MANAGEMENT TEAM The Company is pleased to announce that Broc Richardson has assumed management responsibilities for Investor Relations, in addition to his existing responsibilities as Vice President of Corporate Development. Mr. Richardson has been with the Company since May of 2005 in his current role. The Company will be hiring a Manager of Investor Relations to assist Mr. Richardson.

Delta Petroleum Corporation is an oil and gas exploration and development company based in Denver, Colorado. The Company's core areas of operations are the Gulf Coast and Rocky Mountain regions, which comprise the majority of its proved reserves, production and long-term growth prospects. The Company has a significant drilling inventory that consists of proved and unproved locations, the majority of which are located in its Rocky Mountain development projects. Its common stock is traded on the NASDAQ Global Market under the symbol "DPTR."

State oil company Petroleos de Venezuela SA will expand its work force by more than a third next year, President Hugo Chavez said Friday.

The company known as PDVSA currently has about 74,900 employees and will increase that to 101,590 employees next year, Chavez said during a speech to students. He said the work force will continue expanding to more than 113,800 workers in 2009.

The oil company has seen a rapid expansion in its payroll amid high oil prices as Chavez's government has assumed majority state control of various oil projects previously run by major multinationals.

As recently as 2005, the state oil company had 44,000 workers, a majority of them falling under private contractors.

Chavez also reiterated that PDVSA, whose top client remains the United States, also plans to gradually raise oil exports to China. As part of that effort, Venezuela has formed joint ventures to eventually operate three planned refineries in China, Chavez said.

While the state oil company grows, PDVSA plans to triple its tanker fleet, partly by setting up a shipbuilding factory in the South American country, Chavez said. He added that Venezuela will also begin manufacturing its own oil drills soon.

Drilling in a field capable of yielding as much as 90 million barrels of oil seemed just right for Pioneer Natural Resources Co. _ except for one thing. The field sits about three miles offshore in the Arctic Ocean.

Undaunted, the Irving, Texas, company had a solution. Build a gravel island, equip it with a drilling rig and then ship the oil through eight miles of pipeline to a processing center onshore.

Easier said than done, maybe, but today the 10-year-old company sits poised to begin drilling wells from Oooguruk Island in a few weeks and producing oil by the first half of next year.

Pioneer will be the first independent operator to produce oil on the North Slope, a market cornered primarily by major producers such as BP PLC, Exxon Mobil Corp. and ConocoPhillips for 30 years.

Other independents such as Houston-based Anadarko Petroleum Corp. and London-based BG Group PLC are also exploring the North Slope for oil and natural gas, but haven't announced plans.

While no one is predicting a land grab for the smaller, yet potentially profitable, fields, Pioneer's work is being closely watched, said Michael Rae, analyst with energy consultant WoodMackenzie.

"What this does is, it shows that the independents can go to the North Slope and establish themselves in a high-cost environment," Rae said. "It also provides them a springboard for future development. That's something Alaska needs."

The North Slope accounts for about 14 percent of U.S. domestic output, but its production _ which stands at about 740,000 barrels per day _ is declining about 6 percent a year.

Oooguruk's projected yield of 20,000 barrels a day won't solve the North Slope's production decline, but analysts and industry executives say Pioneer's work cannot be underestimated as its designed to produce oil for up to 25 years.

As larger basins of oil and natural gas become harder to find, oil companies are looking to places considered out of reach 10 years ago such as the Arctic Ocean and greater depths in the Gulf of Mexico.

"Ours is a bellwether project," said Pioneer Chief Operating Officer Tim Dove, whose company has 70 percent stake in a project shared with Italian oil and gas giant Eni SpA. "If we do well, make the project work in reasonable time and in a fiscally responsible manner, it could open up some avenues for us and other independents."

Independents focus on one industry segment such as oil and gas exploration and production or refining crude oil into gasoline. The majors _ known as integrated companies _ string together all components: Production, refining and retail sales.

These smaller, sometimes more nimble, companies often operate under the public's radar compared to the high-profile oil companies going after projects that ultimately lead to billions of dollars of profits.

Pioneer earned $750 million on $1.6 billion in sales last year. Its Irving neighbor Exxon Mobil recorded $39.5 billion net income on $377.6 billion in revenue.

For independents, a lot can rest with a single project, such as Oooguruk, which cost more than $500 million to develop. Pioneer's share is at least $350 million, nearly one-fourth of the company's capital budget for 2007.

Still, the lure of tapping the smaller fields give could independent companies a role could become increasingly more significant on the North Slope, according to industry executives and analysts.

"All of these things we are chasing are things the majors chose not to chase because they were relatively too small for their level of impact," Dove said. "But for a company like us, this is right in our sweet spot."

Reaching this point took almost five years, starting in early 2003 when Pioneer drilled a few exploration wells in the area. That year, oil fetched an average of $31 a barrel. Today, oil prices are hovering around $80.

"We are the beneficiaries of higher oil prices somewhat but, at the same time, costs increased," Dove said.

Oooguruk, named after the Inupiaq word for bearded seal, is the second manmade oil producing island in the Arctic Ocean.

BP, the North Slope's largest operator, in 2001 completed a five-acre island named Northstar about six miles off shore.

Pioneer's island sits about 150 miles southeast of Point Barrow, about three miles from the nearest coastline.

Foundation work began in the winter of 2006 when crews cut out chunks of ice five feet deep to the sea floor to form a six-acre, oval-shaped island. Workers then excavated gravel about 10 miles east of the site and cleared enough land to cover 15 football fields.

Instead, Pioneer gathered 20,000 truckloads _ or about 450,000 cubic yards of gravel _ and hauled it over manmade ice roads. Workers drove more than 400,000 miles, the equivalent to driving 16 times around the earth.

One load at a time, an island was built. It all had to get done within a few winter months before the ice roads began to melt.

"There were some tense moments," said Joey Hall, Pioneer's project manager. "It was a pretty well orchestrated event, like a ballet act you would see in a dance studio: Big pieces of equipment working in sync to mine the gravel, to move the gravel, and to dump the gravel."

To protect from coastal erosion, Pioneer built a retaining wall around the island made up of 8,000 sacks of gravel weighing 13,000 pounds each. The island looks like a fortress despite its blue centerpiece rig.

The threat of polar bears is taken seriously on Oooguruk. The animals have paid a few visits so far. Cages enclose several building exits so workers can safely scout for bears.

"The arctic is a very unforgiving," Hall said. "The weather is always something you have to manage with the conditions changing over time. That's why this is so unique."

As the island took shape, sections of the oil producing facilities were being built. Also completed was a pipeline system that travels 5.7 miles beneath the ocean floor and another 2.4 miles on land to a ConocoPhillips' facility that separates oil, natural gas and water so it can be shipped to markets.

"This is not just an issue of having one field," Rae said. "The advantage Pioneer has established is that if they find smaller fields farther out, they can tie them to the existing pad. That's what makes this so important."

Oil prices inched lower Friday after rising overnight for the first time in four sessions as investors began to question whether supplies of crude and products are sufficient for coming winter demand.

Light, sweet crude for November delivery slipped 6 cents to $81.38 a barrel in electronic trading on the New York Mercantile Exchange by midday in Europe. The contract rose $1.50 to settle at $81.44 a barrel Thursday in New York.

"There's been some very minor profit-taking today, but it's just part of the volatile trade in oil markets," said Victor Shum, a Singapore-based energy analyst with Purvin & Gertz. "The crude oil market remains fundamentally tight in the fourth quarter, and prices should hold steady above the $80 mark."

"Participants view it as a buying opportunity when prices fall to $79 so that should be a rather strong support," he said.

The U.S. Energy Department reported Wednesday that crude inventories rose 1.2 million barrels last week, while supplies of distillates, which include heating oil, fell 1.2 million barrels. Traders say the increase in crude supplies is inadequate, especially as winter approaches.

At the end of the third quarter, many U.S. refineries shut down for maintenance and regear their operations to turn out more home heating oil for the Northern Hemisphere winter. The refineries could start returning to production as early as this month, and that ramp-up would increase demand for crude oil.

Oil and other commodities denominated in dollars are becoming cheaper for foreign investors due to the dollar's weakness.

In Nigeria, government troops freed a kidnapped British national Friday morning near the oil industry hub of Port Harcourt, a military spokesman said.

November Brent crude fell 7 cents to $78.90 a barrel on the ICE futures exchange in London.

Nymex heating oil futures lost 0.23 cent to $2.2336 a gallon. Natural gas futures fell 6.4 cents to $7.348 per 1,000 cubic feet.

The Bush administration foresees no letup in the aggressive pace for Western oil and gas drilling, despite some voter backlash from people tired of seeing more and more rigs in their Rocky Mountain states.

"There's absolutely no doubt that the interest in oil and gas is going to continue. I mean, it is where it is," Jim Caswell, the new director of the Interior Department's Bureau of Land Management, said in an interview Friday with The Associated Press. He took office in August.

Public lands managed by BLM produce 18 percent of the nation's natural gas and 5 percent of its oil. BLM manages 258 million acres, about one-eighth of the land in the United States. Most of that land — grasslands, forests, high mountains, arctic tundra and deserts — is in the West. It also oversees about 700 million acres of minerals below the land's surface.

Five basins in Montana, Wyoming, Utah, Colorado and New Mexico contain the nation's largest onshore reserves of natural gas. BLM has been approving about one of every four applications it receives for permits to drill. But states also approve leases; in Montana, about 120 of the 750 wells producing coal-bed methane are on federal leases.

"The key, though, to me is how do we develop that resource in the most environmentally sensitive way?" Caswell said. "I mean, how can we be as compatible as possible long-term? This is not some short-term thing; this is long-term. I mean, we're talking 20, 30 years."

The White House, emphasizing energy independence from foreign oil, has made it a top priority for BLM to speed up the processing of permits for oil and natural gas leasing. In some Western states, that has caused some GOP resistance.

Democrats have made gains in Colorado, taking the governorship and several congressional seats in recent years in part due to disenchantment among the "hook and bullet" crowd of sportsmen and ranchers who compete with energy drillers for use of public lands.

Caswell said he believes any voter backlash is "to some degree overblown." At the same time, he said such concerns for the environment underscore the importance of some of his top priorities for his remaining 16 months on the job.

Those include updating the formal plans the agency uses to manage each particular area that it is responsible for and working on a $22 million plan for protecting sage grouse and other wildlife prevalent in energy-producing areas of states such as Colorado, Nevada, New Mexico, Oregon, Utah, and Wyoming.

That approach is finding support among some GOP business proponents.

"My thinking to my fellow Republicans is, Let's look at the whole thing," said Marie Rossmiller, vice chair of the Colorado Republican Business Coalition, which advocates for property rights and lower taxes. "The new drilling is still fairly new, and I don't think there's been evidence to show that it's going to do some drastic changes."

Dell LeFevre, a fifth-generation rancher and GOP commissioner in solidly conservative Garfield County, Utah, called oil and gas drilling "a two-headed snake" that divides Western pro-energy and environmental interests.

"I'm not really seeing a backlash, but then I hear rumblings from the environmental groups," said LeFevre. "Everybody wants power, everybody wants to drive a car. We all want energy, but yet we don't want to drill for it."

Before going to work for Interior Secretary Dirk Kempthorne, Caswell spent roughly three decades in various federal positions.

World oil prices edged higher Friday after rallying the day before on tight energy supplies ahead of the northern hemisphere winter, when demand for heating fuel peaks.

New York's main futures contract, light sweet crude for delivery in November, rose 17 cents to 81.60 dollars per barrel.

In London, the price of Brent North Sea crude for November delivery climbed 15 cents to 79.12 dollars per barrel.

Crude futures had closed up almost two dollars on Thursday.

"Traders are starting to worry about the heating oil inventory in the US market," said Victor Shum, an analyst with energy consultancy Purvin and Gertz.

"In the summer, traders worried about the gasoline (petrol) level. Now, traders are starting to worry about the heating oil level."

Traders focus on reserves in the United States because the country is the world's biggest energy consumer, ahead of number two China.

The US Department of Energy's (DoE) weekly report released Wednesday showed stockpiles of distillates, including heating fuel, unexpectedly dropped by 1.2 million barrels to 135.9 million barrels during the week ended September 28.

Industry analysts had forecast a rise of 1.3 million barrels.

Crude oil rose by 1.2 million barrels last week, the DoE report showed. Most analysts had expected oil reserves to fall.

"The overall oil market remains fundamentally tight in the fourth quarter," Shum said.

He expects oil prices to stay around the 80-dollar level.

"The market has been near the 80-dollar mark for about three weeks and generally the support level is quite strong at above 79 dollars. When pricing dips to 79 dollars, many investors consider this as a buy opportunity," he said.

However MF Global analyst Ed Meir said the bias should remain lower over the next few weeks, "especially if the hurricane window starts to wind down."

The seasonal hurricane season last month disrupted output at rigs in the Gulf of Mexico, which in turn hit refinery production.

Last Friday, Brent oil hit a record high 81.05 dollars per barrel, while New York crude struck an all-time peak of 84.10 dollars last month.

Tidelands Oil & Gas Corporation today announced that it has entered into an agreement with Cheniere Energy, Inc. to fund the development of Tidelands' Burgos Hub Export/Import Project, which potentially will connect the North American pipeline grid to natural gas supplies and markets in northern Mexico. Cheniere has purchased an 80% equity interest in the project in exchange for up to $9 million in current and future payments plus royalties to be paid to Tidelands.

James B. Smith, Tidelands' President and Chief Executive Officer said, "We are pleased to have Cheniere as a partner in this venture. Their demonstrated vision in other energy infrastructure projects and their potential ability to secure competitive gas supply for our target markets represents real value added to the Burgos Hub Export/Import Project. With Cheniere as a partner, we will be able to accelerate development of the project to streamline the North American natural gas market."

Tidelands received an initial $1 million payment when the agreement with Cheniere was signed on September 28, 2007. Additional payments will be made as construction begins on each phase of the project. In addition, Cheniere will pay Tidelands $25,000 per month for 24 months, for management consulting related to the project. Upon completion of each phase, Tidelands will receive a $0.01 per MMBtu royalty on Phase I and Phase II subscribed volumes and a $0.02 per MMBtu royalty on Phase III subscribed storage. Cheniere will fund, at its discretion, all project development expenses up and until construction of each Phase begins. At that time each party will fund their respective share.

The Burgos Hub Export/Import Project will be constructed in three phases. Phase I will consist of a pipeline extending from the Valero Gilmore Plant, located at Hidalgo County, Texas to Estacion Arguelles, located in Tamaulipas, Mexico, to Station 19 of Pemex Gas y Petroquimica Basica to Monterrey, Mexico; Phase II will be the construction of a pipeline extending from the Donna Station to the Brazil Storage facility to Station 19 of Pemex Gas y Petroquimica Basica; and Phase III will be the construction of the Brazil Storage Facility, an underground natural gas storage facility to be located in Rio Bravo, Mexico.