Exxon Mobile Corp. said it was ready to drill at Alaska's Point Thomson oil field contrary to the state's assertion the company would rather procrastinate.

The state has accused Exxon of holding back on drilling while it pursues other ventures and has tried to regain control the 106,000-acre field, the Anchorage Daily News reported Thursday.

Exxon is the dominant leaseholder of the oil field, the newspaper said.

The argument went to court Wednesday. Mark Ashburn, representing the state, told Judge Patrick McKay that a suit on the issue was moot, as the state had not yet given Exxon its final decision on a permit to start drilling.

Exxon said it was "ready, willing and able," to initiate its drilling in the field that could produce 10,000 barrels daily of condensate -- a light oil -- by 2014, the newspaper reported.

Ashburn called Exxon's assertion that it will drill soon "a public relations ploy."

The state contends the company is using the field as a natural warehouse and does not intend to begin drilling soon.

A decision on whether or not Exxon can continue with the suit could come within a week, Ashburn said.

China's imports of liquefied petroleum gas (LPG) surged 15.2% year-on-year to hit 6.98 million tons, valued at US$3.09 billion, according to sources.

The liquefied natural gas imports surged 320% to 2.91 million tons, accounting for 41.7% of the total imports, according to sources with the General Administration of Customs on Saturday.

Of the total LPG imports, 83.4% or 5.82 million tons were imported by the foreign-funded companies, up 37.5%. The main import sources were from Australia and the Middle East, with 3.38 million tons and 2.83 million tons respectively, accounting for 18.55% and 20.6% of the total.

Industry observers predicted China would continue to face the short supply of LPG in a short term, as the LPG importers would reduce their imports due to the limited profits.

China Huaneng Group will buy Singapore's Tuas Power Ltd for S$4.24 billion (US$3.1 billion) in China's second-biggest overseas acquisition this year.

The Beijing-based company has signed an agreement to buy Tuas Power from Temasek Holdings Pte, Huaneng, China's biggest power producer, said on its Website Friday.

The transaction is expected to be completed by March 24, Singapore's state investment company said in a separate statement.

The purchase "represents a major step for China Huaneng in its goal to diversify its assets across geographies and technologies," Vice President Huang Long said in the statement.

Tuas Power, the first of three utilities Temasek is selling, was set up in 1995 and has 2,670 megawatts of capacity built at a cost of S$2 billion.

Its power station at the western end of the city state comprises four blocks of natural-gas-fired combined cycle plants and two units of steam plants.

"The move is a natural extension of the Chinese power producer's core competencies," Donovan Huang, a Nomura Securities Ltd analyst, said by phone from Hong Kong. "Huaneng has sound management and has some gas-fired management experience."

For the year to March 2007, Tuas Power had revenue of S$2.27 billion, up 31 percent from a year earlier, its financial report showed.

Net income for the year to March 31 was S$177 million, 70 percent more than a year earlier. At December 31, Tuas Power's net debt stood at S$71 million.

Wong Kim Yin, Temasek's managing director for investments, said in the statement that China Huaneng's proposal, through its subsidiary SinoSing Power Ltd, was the "most attractive." It was the clear winner on price and commercial terms, according to the statement.

Kuwait’s Al-Kharafi Group on Sunday bought shares in Sudanese oil company Petrodar Company, taking some 3 percent stake of the capital.

According to KUNA, the official Kuwaiti news agency, Al-Kharafi has agreed to buy a 3 percent stake of Perodar at a value of 500 USD million from Thani, a Dubai based firm. The Kuwaiti group signed the contract with the Sudapet in Khartoum on Sunday.

Sudapet Director-General Saleh Jaafar told reporters that the company had agreed to buy Thani’s five-percent stake in Petrodar, noting that Al-Kharafi would acquire three percent while the Sudanese company would obtain two percent.

Al-Kharafi Group Deputy Director-General Marzouk al-Kharafi said his company had agreed with the Ministry of Energy to enter agricultural and animal investment in Sudan, which abounds in natural potential and resources in such fields.

Thani Group had bought the sold shares for USD two million. The Sudanese responsible said that the agreement with Al-Kharafi came due to its large experience in the oil field.

The deal would raise Sudapet’s stake to 10 percent in Petrodar, which operates the Dar Blend field. Dar’s exports were estimated at about 200,000 barrels per day in mid-2007. The Sudan produces around 500,000 bpd of crude oil.

Petrodar was set up to explore, develop and produce oil and gas from blocks 3 and 7 in the south east with a total area of about 72,000 square km (27,800 square mile).

Petrodar is a venture between China National Petroleum Company International (Nile) Ltd, Petronas Carigali Overseas Sdn Bhd, Sudapet Ltd, Gulf Oil Petroleum Ltd and Al Thani Corp. The Chinese Sinopec holds the majority 41 percent stake in Petrodar, the Malaysian Petronas, holds 40 percent, while Sudapet, Gulf oil and Al Thani jointly hold the remaining 19 percent.

Algonquin community leader Robert Lovelace had never been charged with an offence, but when a uranium company began prospecting for radioactive ore on unceded First Nations land without engaging in consultation, he decided to take action and organized a non-violent blockade.

On February 15, Judge Cunningham of Ontario's Superior Court sentenced Lovelace to six months in jail for contempt of court and fined him $50,000 for his involvement in the peaceful protest.

Chief Paula Sherman, elected leader of the Ardoch Algonquin First Nation, a small community about 110 kilometres southwest of Ottawa, where the controversial uranium prospecting is taking place, calls Robert Lovelace "a political prisoner."

"It seems like a very heavy sentence," said Jamie Kneen of Mining Watch Canada, a non-governmental watchdog. "If the court had issued a trespassing charge, there could have been an argument about who was really trespassing."

The territory in question involves mainly Crown land that is subject to ongoing land-claim negotiations between First Nations and the provincial and federal governments.

In September 2007, an Ontario provincial court issued Frontenac Ventures, the mining company, an interlocutory injunction ordering protestors from Ardoch and Sharbot Lake First Nations, along with their non-native allies, to vacate the Robertsville camp. The camp is the only feasible entry point to a 30,000-acre wilderness tract in Frontenac County, where the company has its prospecting license. Lovelace and other activists violated that order.

"The source of this conflict is the Ontario Mining Act, which allows companies to stake land and prospect without consultation with private land owners or other users, including First Nations," said Kneen. Lovelace and other activists argue their constitutional rights were violated by the lack of consultation.

People living on or near the exploration site discovered their land was being taken almost two years ago. There were no community meetings or information sessions about the uranium exploration. "It started on private land when a cottager saw trees being cut and started protesting the development," said Kneen. A few months later it became clear that some of the land being staked was disputed territory.

"Uranium mining has no record other than environmental destruction and negative health issues," said Doreen Davis, chief of the Shabot Lake First Nation. "Uranium can't be stored safely," said Davis, who will be sentenced on March 18 for participating in the blockade. She is under court order not to talk about the dispute with Frontenac.

"I do know that we have communities from Kingston to Ottawa on our side against uranium mining in this district," said Davis. "A huge group of settlers, that's what they call themselves, have been working with us, pounding the pavement and educating people about this. I think it is unique to have aboriginal and non-aboriginal people standing shoulder-to-shoulder like this."

The federal government has yet to get involved in this case and Ontario's provincial government has only been reluctantly and peripherally involved, according to Kneen.

Not much is known about the company at the centre of the dispute. "Frontenac is a private company, so they don't have to file any disclosure," said Kneen. "Aside from the president and their lawyer, no one knows who they are or where they get their money."

The company's website has only one page and a press release. Frontenac's president, George White, did not return calls. The website says the company "is committed to participating in any efforts of Ontario and the First Nations' to consult in good faith," but Ardoch Chief Paula Sherman isn't convinced.

"No consideration was given to the circumstances leading to our actions," said Sherman in a statement following Lovelace's sentencing. "The testimony given under oath by Robert Lovelace outlined Algonquin Law and the corresponding responsibilities of Algonquin people with respect to human activity in our territory," wrote Sherman, who was fined $15,000 during the court case for breaking the injunction that prohibited protests on land being explored by Frontenac.

Because the company obtained a court order against protestors rather than filing trespassing charges, the judge was not required to consider arguments regarding historical precedent or Algonquin legal codes when making the decision. "It's a way of avoiding the core issues," said Kneen.

After a decade of low prices, the spot price of uranium has increased drastically in recent years, from $43 per pound in 2006, to $75 today.

As oil prices rise, countries have re-started old nuclear reactors and countries like South Africa, India and China have ambitious nuclear-power plans on the horizon. UBS, a financial services company, predicts uranium will hit $110 per pound by 2010.

These developments don't sit well with Dr. Mark Winfield, a Canadian nuclear expert. "Existing [uranium] mines in northern Saskatchewan have caused severe contamination through heavy metals like arsenic, and long-lived radionuclides, along with conventional pollutants," said Winfield.

In 2004, Health Canada concluded that effluent from uranium mines meets the definition of a toxic substance under the Canadian Environmental Protection Act.

Canada is the world's largest supplier of uranium and Conservative Prime Minister Stephen Harper wants to increase exports in his bid to transform the country into an "energy superpower."

"The Intergovernmental Panel on Climate Change was very clear that nuclear [energy] can't compete economically," said Winfield. "The potential health and environmental impacts of uranium mining are not worth the risks."

Chevron Corporation (NYSE:CVX) told financial analysts at a meeting in New York City today that major upstream capital projects in the U.S. Gulf of Mexico, offshore Nigeria and in Kazakhstan will produce additional crude oil and natural gas this year. In the downstream business, company executives said projects to increase refining scale and flexibility are under way in areas of market strength in the United States and Asia.

"We are focused on execution as a top priority for 2008 and 2009" Dave O’Reilly, Chevron’s chairman and CEO, said at the company’s annual analyst meeting. "This entails excelling at operational performance, executing our capital projects well and effectively managing costs"

O’Reilly’s presentation outlined the momentum Chevron has developed in key areas of its business plan:

* Significant upstream and downstream presence in the highest-growth regions of the world.
* Outstanding queue of upstream projects in all phases of engineering and construction.
* Successful exploration program that provides resources for oil and gas development projects.
* Improved refinery capabilities to process heavier, higher-sulfur crudes.

UPSTREAM – EXPLORATION AND PRODUCTION

George Kirkland, executive vice president for Global Upstream and Gas, said a track record of exploration success and project execution is expected to grow Chevron’s production capacity and boost proved reserves of crude oil and natural gas.

The company has approximately 40 major capital projects with a net Chevron investment of $1 billion or more each. Of those, important projects – including Blind Faith in the Gulf of Mexico, the Sour Gas Injection/Second Generation Plant in Kazakhstan and Agbami in Nigeria – are planned to increase production capacity in 2008. In 2009, Tombua Landana in Angola, Frade in Brazil and Tahiti in the Gulf of Mexico are expected to come online and further grow production capacity.

Kirkland also explained that the company’s exploration teams had another strong year in 2007. Each year from 2002 through 2007, Chevron’s exploration program has added an average of 1 billion barrels to its resource base. The 2007 success rate for exploration wells was 41 percent, comparable with Chevron’s average of 42 percent over the past six years. In addition, a recently released Wood MacKenzie report cited Chevron as the leader among its peers in exploration results from 2002 to 2006.

"Not only is our exploration success feeding our strong queue of major capital projects, it is also building the foundation for long-term reserves replacement as the discovered resources move to proved reserves" he said.

In regard to proved reserves, Kirkland said projects in Kazakhstan, Nigeria, Australia, Brazil, China, the United States and Angola will deliver strong reserves replacement for Chevron over the next three years.

"Our three-year business plan indicates we will have reserves of approximately 11.3 billion barrels of oil-equivalent at the end of 2010 – more proved reserves at the end of the decade than we have today" Kirkland explained.

ConocoPhillips, Houston Becky Johnson, 281-293-6743 (media) or Gary Russell, 212-207-1996 (investors) ConocoPhillips (NYSE:COP) held its annual analyst meeting today in New York. The company's Chairman and Chief Executive Officer Jim Mulva outlined how ConocoPhillips' strategic objectives and operating plans will enable the company to utilize its portfolio of high-quality assets in delivering growth and enhancing value for shareholders, while overcoming a variety of challenges inherent to the current business environment.

"We have a strong portfolio of opportunities, and development plans are under way so that we can fully capitalize on their potential," Mulva said. "We are benefiting from our talented work force and ongoing focus on capital discipline and project execution, financial optimization, operating excellence, and safety and environmental stewardship. As a result, we believe ConocoPhillips is well positioned to operate successfully in the business environment we foresee for 2008 and beyond - one that seems likely to be characterized by strong energy demand. Although we face intense competition for access to new resources and the prospect of legislation on climate change, we have taken steps to enable ConocoPhillips to operate effectively and deliver value as we manage the challenges ahead."

Mulva noted that ConocoPhillips' 2007 total shareholder return of 25.4 percent was above the peer group average, and that the company's three-, five- and 10-year returns led the peer group. He reaffirmed ConocoPhillips' intent to fund a capital program of $15.3 billion in 2008, to continue select asset sales that facilitate ongoing renewal of its portfolio, and to continue pursuing efficiency in executing its development projects, drilling programs and base operations.

In pointing out that efficiency, Mulva said, "In terms of cash contribution per barrel of oil equivalent, our performance leads our peers in both the E&P and R&M segments. This ability to generate cash enables us to enhance distributions to our shareholders, such as the recently announced 15 percent increase in our dividend, and it should enable us to complete the $10 billion in share repurchases authorized for 2008."

In its Exploration and Production (E&P) segment, the company outlined its strategic plans to advance an asset portfolio that is resource-rich, with more than 50 billion barrels of oil equivalent of existing resources, including 10.6 billion barrels of proved reserves at year-end 2007. ConocoPhillips has leading positions in both natural gas production and heavy-oil acreage in North America, a legacy asset position in the North Sea, and strong growth prospects in the Asia Pacific, Russia and Caspian, and Middle East regions. Major near- and long-term development projects are under way in all these regions. The company expects to sustain a long-term, average production growth rate of 2 percent and a five-year reserve replacement average of 100 percent or more. ConocoPhillips also anticipates new opportunities to emerge from its business development efforts and from a replenished exploration program that is increasing the company's exposure to high-potential prospects.

In Refining and Marketing (R&M), ConocoPhillips is committed to maintaining its segment-leading performance in U.S. refining, a strong refining position in Europe and an advantaged position in Asia. The company expects to sustain its leadership position by delivering safe, reliable and environmentally responsible operations, while holding base operating costs generally flat. ConocoPhillips also plans to capitalize on opportunities in the market by improving its clean products yields and enhancing the integration of its downstream, upstream and commercial businesses, while increasing operating margins through key investments in refining conversion capacity. In addition, the company is engaged with foreign partners in studying opportunities to expand its global portfolio.

Updates also were provided on the company's strategic partnership with LUKOIL, the upstream and downstream business ventures with EnCana Corporation, and the DCP Midstream and Chevron Phillips Chemical Company joint ventures.

In addition, Mulva addressed the important role technology would play in helping ConocoPhillips achieve its plans. "We have a rich history in technological development devoted to the recovery of conventional resources, and we believe that further research is the key to unlocking the value of our non-conventional resources and advancing the development of alternative energy sources."

The company expects to spend approximately $400 million on technology in 2008, primarily to progress such technologies as reservoir imaging, steam-assisted gravity drainage, coal gasification, carbon capture and sequestration, cellulosic ethanol conversion, and refining processes. This also includes more than $150 million for research efforts focused on the development of non-conventional oil and gas resources and the development of new energy sources, such as alternatives and renewables. Additionally, ConocoPhillips plans to build both a state-of-the-art global technology center and a best-in-class corporate learning center on land recently purchased in Colorado.

"Further, we are investing strongly in our people by enhancing our efforts to recruit, retain and develop a highly capable, demographically balanced and diverse work force," Mulva said. "We are making good progress, and our plans to develop both a technology center and a corporate learning center will help ensure our employees attain their maximum potential."

Discussing other issues, Mulva said that, "To ensure that our business remains sustainable over the long term, we must operate safely and with environmental care, while also helping address the key challenges facing society. For example, society clearly needs to achieve energy supply security, as well as address the challenge of climate change caused by carbon emissions. We believe these issues are interrelated and must be solved together. Therefore, ConocoPhillips supports enactment of a comprehensive U.S. energy policy, and a mandatory national framework to reduce carbon emissions. Also, we are working to conserve and recycle more of the water used in our operations, and are funding research into new techniques that could utilize the water produced in association with oil and natural gas for agricultural and industrial applications."

More information, including presentation materials and a recorded webcast of the meeting, is available at www.conocophillips.com/investor.

ConocoPhillips is an international, integrated energy company with interests around the world. For more information, go to www.conocophillips.com.

The government’s clarification in the Budget 2008 that ships hired to support drilling activities would indeed attract a 12.5% service tax, will make oil and gas exploration more expensive, given the unwillingness of explorers to pay the tax, forcing shipowners to take a hit to their financials by doing so themselves.
Exploration firms were brought under the purview of service tax in Budget 2007, but they have thus far refused to pay up arguing that the levy did not cover hiring of ships, as these were not involved in mining and drilling operations.
“To promote oil exploration activities along the county’s coast, the government introduced a special tax regime for this industry in the new exploration licensing policy, wherein it (the sector) is exempted from all duties and levies. Why should the government impose a service tax on us now?” asked an official with Oil and Natural Gas Corp. Ltd (ONGC), India’s biggest oil explorer. The official did not wish to be identified. ONGC has hired at least 100 offshore support and supply ships, paying anywhere between $2,000 (Rs81,000) and $12,000 a day to shipowners. Hiring of oil drilling rigs is costlier with daily rentals in excess of $200,000.
Both oil firms and local shipowners lobbied vigorously in the run-up to the Budget to exempt ship rentals to the offshore oil industry from service tax.
However, Budget 2008 clarified that renting ships such as drilling rigs, offshore support and supply vessels, anchor handling tugs and other supply boats would come under the scope of service tax.
Exploration companies are still resisting the tax. State-owned ONGC said it could not absorb the extra costs unless the government provides for it in the firm’s annual budget. “Oil exploration firms told us that service tax is not payable by them when we asked them to reimburse the levy on ship rentals for payment to the government,” said an official with Garware Offshore Services Ltd.
Shipowners could be in trouble as a result. The indirect nature of the tax means shipowners have to collect it from explorers and pay it to the government.
Recently, the Indian National Shipowners Association (Insa), the umbrella body representing local shipowners, received a communication from the government’s service tax department asking shipowners to pay the tax or risk action.
“We are in a jam. On one hand, we cannot violate government tax laws. On the other, we cannot give up on our clients,” said an executive with TAG Sealogistics Ltd who did not wish to be identified.
Shipowners such as Shipping Corp. of India Ltd, Great Eastern Shipping Co. Ltd, Varun Shipping Co. Ltd, Garware Offshore, TAG, Great Offshore and Dolphin Offshore Enterprises (India) Ltd will have to take a substantial hit if they are to pay the service tax from their own pockets. “It is a sizeable amount and will be a big problem for shipowners,” an Insa official who did not wish to be identified said.
The oil explorers’ stance contradicts a commitment by at least some of them to reimburse the service tax if it is made mandatory. “In fact, some shipowners had incorporated a clause in their contracts with ONGC that the company would reimburse service tax if it became payable,” said an executive with Great Offshore, India’s biggest offshore service provider.
“So, we are pretty much covered both contractually as well as due to the indirect nature of the tax, which is paid to the government only after it is collected from the end users,” added this executive who did not wish to be identified.

SHIPBUILDER Coastal Contracts Bhd expects to secure a further RM400mil worth of new offshore support vessels (OSV) orders this year, said executive chairman Ng Chin Heng.

“Apart from the RM105mil sale announced in January and the RM51mil deal announced last week, we are targeting to bag at least an additional RM400mil worth of new OSV orders to add to our already sizeable order book.

“We hope to achieve this before the end of 2008 to close the financial year at a high,” he told StarBiz.

Ng said the Sabah-based company was in “advanced negotiations” with several potential OSV buyers and was confident of closing these deals soon.

Coastal’s order book to build vessels had surpassed the RM1bil mark, he added.

In January, it announced that its wholly-owned subsidiary Coastal Offshore (Labuan) Pte Ltd had secured the sale of two OSVs to an Indonesia buyer for about RM105mil while last week it said it had secured the sale of two units of OSVs to an Egyptian buyer for RM51mil.

Ng said Coastal hoped to maintain a strong double-digit growth in net profit this year, with the OSV segment spearheading the earnings expansion.

At the same time, the company was positive that demand for tugboats and barges – its traditional vessels which are chartered out – would remain significant in line with the rise of global seaborne trade, he said.

Coastal’s vessels are used by agriculture, mining and heavy industry companies to transport grains, coal, iron ores, scrap irons, crude oil, crude palm oil and various other commodities.

“We are also considering the option of retaining a number of OSVs from our current building programme for outright charter to support vessel service providers.

“Alternatively, we can opt to assume the role of a support vessel service provider ourselves to get the ball rolling in this lucrative sector and bolster our recurring income,” Ng said.

He said that despite looming inflationary pressures, shipbuilders were still anticipating growth in orders of OSVs this year.

This is because demand is expected to trend up in line with robust activities in the oil and gas sector, which would drive demand for offshore exploration platforms and rigs. That, in turn, would generate demand for OSVs.

As for competition, although there have been several new entrants into the OSV market on the domestic front recently, Coastal does not expect congestion overnight in the sector.

“There will definitely be a gestation period of a few years between the development and preparation of new shipbuilding facilities and the actual roll-out of finished products,” Ng said.

Additionally, Coastal had moved up the shipbuilding hierarchy by fabricating “sophisticated” OSVs – a segment where barriers to entry were high, he said.

“We believe the pie is large enough to absorb additional OSV supply. Vietnam's oil industry, for example, is booming and that country is expected to have some 900 exploration wells over the next 15 years.

“Meanwhile, Petronas has targeted to explore and develop 500 new wells over the next five years,” Ng said.

Against this backdrop, surely the OSV demand and supply imbalance would continue, he added.

Coastal reported a 102% jump in net profit to RM69.3mil for the financial year ended Dec 31, 2007 while sales grew 82% to RM290.4mil.

Senator Dianne Feinstein said Sunday that the US troop surge in Iraq could fall short of its goal, and raised concerns about a news report that said stolen oil cash was paying for the insurgency.

"The surge, where it has worked militarily, has not worked politically. What's left in Iraq is a government that is incompetent," Feinstein, a Democrat who serves on the Senate Appropriations committee, told CNN.

Feinstein also pointed to a report in the New York Times that alleged that stolen Iraqi oil profits were paying for deadly insurgent activities five years after the US-led invasion.

"The front page of the New York Times points out massive, massive oil fraud. We had a hearing in defense appropriations, which dealt with some of it. The estimate is nine billion dollars of oil revenues are missing," she said.

"Now, the Times contends it's going in to fuel the insurgency. If this is allowed to happen, it doesn't matter what the surge does, the insurgency will continue."

The newspaper citing American military officials as saying fraudulent activities, including hijackings of oil tankers, bribed drivers, forged papers and manipulated meters are responsible for siphoning off about one-third of Iraqi oil revenue toward the black market.

"Some of the earnings go to insurgents who are still killing more than 100 Iraqis a week," the newspaper said.

The Times quoted Captain Joe DaSilva, a platoon commander at the Baiji oil refinery in a Sunni Arab-dominated region of Iraq, as saying such kinds of fraud were "the money pit of the insurgency."

The United States boosted troop levels to Iraq last year, sending in tens of thousands of extra soldiers. Its force in Iraq, which currently numbers 162,000, is supposed to fall to 140,000 by July.

Oil markets are rising due to speculation and the dollar's fall, not to a lack of petroleum production, OPEC President Chakib Khelil said on Sunday, the official Algerian news agency APS reported.

APS quoted Khelil, who is also Algerian Energy and Mines minister, as saying: "Prices are not going up because of a lack of output, but rather from the effect of speculation."

This increase in price "is linked not to a lack of production but to the devaluation of the dollar, which has given speculators the opportunity to invest in oil."

Victoria Petroleum as operator for the Growler Oilfield Development Project, advised that oil production has commenced from the Growler Oil Field. The start of production is significant as this is the first oil produced from PEL 104 located on the north western margin of the Cooper-Eromanga Basin. Both Growler wells were opened to natural flow on 12 March and were flowing at a combined rate of 100 BOPD. Artificial Lift production pumps will be installed over the next few days and once this work has been done the production rate is expected to reach 300 barrels of oil per day.

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British oil and gas firm Cairn Energy Plc has discovered new gas in one offshore well but has failed to find any in two other offshore fields in the Bangladesh sea, government officials said on Sunday.

The firm completed exploratory drilling in the Hatiya structure in the Bay of Bengal, 60 kilometers south of the port city of Chittagong, an official said.

"The firm informed us today that they have encountered hydrocarbon/petroleum in the structure which is not commercially viable," said Muhammad Muqtadir Ali, a director of state-run Bangladesh Oil, Gas, and Mineral Corporation or Petrobangla.

But Cairn has discovered new gas in a well at the Sangu offshore field.

"The firm will be able to add at least 25 to 30 mmcfd of gas in its total production," another official said.

Earlier, the firm did not find any commercially viable gas in Magnama, another offshore field in the sea.

"Now the firm proposed to conduct a 3D seismic survey in both the fields either in late December this year or early next year," Muqtadir told Reuters, referring to Hatiya and Magnama.

After the 3D survey is completed, Cairn will conduct an appraisal for a final decision which will cost altogether about $90 million for each field, the official said.

Muqtadir said the firm had already spent about $200 million in offshore exploration work.

The firm started drilling after completion of 2D seismic surveys but failed to discover commercially viable gas there.

Petrobangla, based on seismic surveys, has estimated that there was a potential reserve of 3.5 trillion cubic feet of gas at Magnama and 1.8 TCF at the Hatiya structure.

The firm operates Bangladesh's only offshore gas field at Sangu in the Bay of Bengal, producing up to 80 million cubic feet of gas per day .

Cairn has been in Bangladesh for more than 10 years and, along with its joint venture partner, U.S. firm Halliburton Co., has invested nearly $790 million, officials said.

Bangladesh's proven and recoverable gas reserves of 13.54 tcf are expected to be exhausted by 2011, officials said.

Sherman soon could be home to a highly efficient and clean 500-megawatt natural gas-fired electricity plant. Sherman Economic Development Corp. entered an agreement with Panda Energy Inc. Monday to build a $300 million, combined-cycle natural gas fired power plant.

Panda's is likely the largest building project in Grayson County history. In return for Panda's investment, SEDCO agreed Monday to give Panda 204 acres in its industrial park and $2 million in cash incentives. "We're just really excited about it," said SEDCO Board of Directors Chairman Joe Fallon. "They still have some financing and regulatory approvals to obtain, but it is really going to be great for the Sherman economy, mainly from the $300 million increase to the tax base ... From everything we're hearing and have looked at it's a very efficient, really clean-burning natural gas plant we're building."

Fallon said it is the largest building project they've found in Grayson County history.

SEDCO President John Boswell said the city of Sherman and Grayson County are still considering their economic development incentives for the plant. Such incentives from the county, Grayson County College and cities often come in the form of tax abatements. SEDCO acted quickly because it was important for Panda Energy Inc. to be able to go to the Electricity Reliability Council of Texas to begin discussions for building the plant, Boswell said. ERCOT controls the state's power grid. Panda also must gain permits to build and operate the plant from the Texas Commission on Environmental Quality.

Boswell said the SEDCO board approved giving Panda the land, which the company first will pay for and then SEDCO will reimburse; and $2 million based on the nearly $300 million investment. The incentives were based on investment and not the number or quality of jobs created. About 25 full time, permanent jobs should be created, Boswell said. The press release quotes Boswell as saying that building the plant will create 300-400 construction jobs and 32 jobs will be created indirectly supporting the plant.

The generating plant will be built in SEDCO's Northgate Park III industrial park, partially on 40 acres the board purchased in January for $400,000. Boswell said Panda will pay for the land and when the plant is built and the company receives a certificate of occupancy from the city, it will be reimbursed. The land, according to the land option contract between Panda and SEDCO, is valued at $3,600 per acre or $734,400. The park is west of U.S. Highway 75 and south of FM 1417. Part of the land is within Blalock Industrial Park.

A press release from Panda quotes Sherman Mayor Bill Magers as saying, "Panda representatives have been actively engaged with community leaders since the beginning of the site selection process. 'They've done a good job answering questions and building support for this project. Panda has also shown that they intend to be a good corporate citizen of our community.'"

Boswell said this is one of the best deals SEDCO has made, with incentives being less than 1 percent of the investment.

Panda officials said in a press release that the natural gas-fueled generating station would be able to supply the power needs of approximately 400,000 homes in North Texas and is expected to bring more than $248,000,000 into the area's economy over the next 10 years.

"The Panda Sherman generating station will utilize the latest in proven technology and will be one of the cleanest power plants in the nation," the press release states. "Air emissions at the facility will be controlled to among the very lowest of any power plant in Texas."

Combined cycle generating plants produce more energy than traditional plants do with a unit of fuel. The Northwest Power Planning Council explains that a combined-cycle gas turbine power plant consists of gas turbine generators equipped with heat recovery steam generators to capture heat from the gas turbine exhaust. This steam powers additional turbines that produce more electricity. Thus, what heat once was released back into the environment now is used to produce electricity.

This combined cycle produces power at about 50 percent of the chemical energy of the gas that powers it.

Combined cycle gas turbines emit nitrogen oxides, according to the NPPC and carbon monoxide. If fuels other than gas, such as fuel oil, were used, the plant might emit other chemicals, such as sulfur dioxide.

"In 2004, the company brought its development expertise to the biofuels industry originating several large-scale ethanol projects," Panda's press release states. "Newsweek Magazine subsequently recognized Panda, in 2005, as one of the ten most eco-friendly energy companies in America for developing the Hereford ethanol facility — the largest biomass-fueled ethanol refinery in the United States with one of the lowest carbon footprints of any similar-sized facility in the nation. In 2006, Panda Energy founded and transferred responsibility for its ethanol projects to Panda Ethanol, later establishing the company as a separate public entity."

Panda also owns combined-cycle natural gas fired generating plants in Paris, Odessa, Guadalupe, Oneta, Okla., Gila Bend, Ariz., El Dorado, Ark., Rosemary, N.C., and Brandywine, Md. The company owns a small hydroelectric plant in Bhoti Koshi, Nepal, and a coal-fired plant in Luannan, China. The Sherman plant would be one of its smaller natural gas plants. The company also owns natural gas and electricity distribution lines.

“Panda Energy is continuing its work to build out a fleet of new generating stations that will help meet the rising demand for clean, low-priced electric power,” said Robert Carter, chairman and chief executive officer of Panda Energy. “North Texas officials are clearly looking toward the needs of tomorrow, and we look forward to working with them to enhance the future reliability of the region’s power supply.”

Sherman Mayor Bill Magers said Panda representatives have been actively engaged with community leaders since the beginning of the site selection process. “They’ve done a good job answering questions and building support for this project. Panda has also shown that they intend to be a good corporate citizen of our community.”

“I can’t think of another company that has worked harder to bring something good to the city of Sherman than Panda Energy,” said John Boswell, president of the Sherman Economic Development Corporation. “This power plant will have a significant impact on the area’s economy for years to come. It will expand the tax base, enlarge payrolls and drive revenues for contractors, suppliers, engineering firms, hotels, restaurants, retailers and a host of other businesses. The plant will create an estimated 300-400 construction jobs, 25 direct jobs to run the facility and 32 indirect jobs to support it. This is good for the city of Sherman.”

The generating station will be located on a 200-acre site at the Progress Industrial Park. Construction will take approximately 24 months and is dependent upon financing, regulatory approvals and other conditions.

Panda Energy previously announced that it has filed for an air permit to build a 1,000-megawatt combined-cycle power plant in Temple, Texas.

Panda Energy was founded in 1982, has developed, financed, built and operated large-scale energy facilities both domestically and internationally. The company built the two largest gas-fueled, combined-cycle independent electric generation facilities in the United States totaling 4,500 megawatts of generating capacity. Altogether, the company has raised over $5.9 billion to develop and build more than 9,000 megawatts of generating capacity.

Newsweek Magazine, in 2005, recognized Panda as one of the 10 most ecofriendly energy companies in America for developing the Hereford ethanol facility — the largest biomass-fueled ethanol refinery in the United States with one of the lowest carbon footprints of any similar-sized facility in the nation. In 2006, Panda Energy founded and transferred responsibility for its ethanol projects to Panda Ethanol, later establishing the company as a separate public entity.

In import-based Hawaii, rising energy prices raise the price of everything else

It's easy to see the impact of record-high crude oil prices at the gas pump.

But what about other areas of the economy?

Anywhere you turn in Hawaii, it's hard to not notice the rising cost of everything from gasoline to groceries.

"You see it at the gas pump, and that's the wake-up call, but it also shows up in the processing costs for food and other manufactured items that are produced elsewhere, but that we then import," said Paul Brewbaker, chief economist for Bank of Hawaii.

Some increases are easily seen, such as fuel surcharges on airfares or shipping rates.

Other costs are less measurable, such as how meat prices are driven up due to higher feed prices as a result of ethanol demand, Brewbaker says.

"The inflation has been much higher than we thought in a particular commodity, petroleum, on which Hawaii is very much more dependent than the rest of the U.S. energy consumption complex," Brewbaker added. "That vulnerability weighs increasingly heavy on prospects for economic growth in the islands."

A continued rise in crude oil prices pushed pump prices in Texas to new record highs this week.

According to the AAA Texas, the current average price per gallon of self-serve unleaded gas in Texas rose to $3.16, an all-time high.

Fort Worth pushed past Dallas with the highest average in the state at $3.17 a gallon, up 9 cents from last week. Dallas' average also reached $3.17 a gallon, up 8 cents.

Elsewhere in the state, the average price in Houston hit $3.16 per gallon, up nearly 8 cents.

San Antonio had the state's lowest average at $3.12 a gallon, but that price was still up five cents over the previous week.

In Corpus Christi, the cost of gas increased nearly 6 cents -- to just under $3.14 per gallon.

"Every Texas region surveyed set new record highs this week, with Amarillo being the only exception," said AAA Texas spokeswoman Rose Rougeau.

The price in Amarillo reached $3.16, an increase of more than 5 cents compared with the previous week.

"Texarkana is the only area that posted a decrease," Rougeau said. "With record crude oil prices pushing retail gas prices upward, it is unlikely that area will continue to move downward."

The pump price was $3.13 a gallon in Texarkana, down more than 4 cents from the previous week.

The massive building squatting just off Harborside Drive is a 506-ton reminder of how the global quest for oil and natural gas is reviving island shipyards.

Building the structure, which will serve as living quarters for offshore workers, took 10 months and was the largest project to date for LoneStar Marine Shelters, 6800 Harborside Drive.

Last week, LoneStar Marine employees and about 150 energy industry representatives, including some from BP Energy and Fluor Corp., marked the completion of the 32-person sleeping quarters, control room and 69-foot-by-69-foot helideck with a tour and topping-out party.

Exmar Offshore, a subsidiary of an Antwerp, Belgium-based group of companies, contracted with LoneStar Marine to design and build the living quarters and a smaller workshop and storage building.

Marriage Made In Ingleside

The unit soon will be shipped by barge to the Kiewit Offshore Services yard in Ingleside, north of Corpus Christi, and be married to Exmar’s $300 million Opti-Ex deepwater semisubmersible production platform. Samsung Heavy Industries in South Korea is building Opti-Ex’s hull. Workers at Kiewit’s fabrication yard will complete the rig’s 6,400-ton deck.

The living unit includes a galley, gymnasium, sick bay, offices and rooms equipped with 15-inch plasma TVs and a lounge with a 42-inch screen TV. It’s all wired for Internet.

Monster Move

Perhaps as soon as the end of this month, the structure will be rolled onto a barge at the shipyard’s dock by a remote-controlled mover equipped with 280 independently operated wheels, LoneStar officials say.

The mover will lower the unit down onto a structure engineered to distribute its enormous weight across the barge, officials said.

Finally, workers will brace and weld the building to the support structure on the barge for the trip through the Gulf of Mexico to Ingleside.

Exmar’s Opti-Ex, which can operate in depths of 10,000 feet, is the only new production semisubmersible under construction that’s available for lease, officials say. The platform is expected to be delivered in the first quarter next year and will be available for lease to oil companies worldwide, Exmar officials say.

Opti-Ex is capable of supporting production of 60,000 barrels of oil and 50 million cubic feet of natural gas a day, Exmar officials say.

Record Demand

Record high oil prices — light, sweet crude for April delivery reached a new trading record of $110.20 Wednesday— is driving demand for buildings to accommodate offshore workers.

Strong energy prices bode well for the island yard, said Steve Vacker, vice president of LoneStar Marine Shelters.

“For our business, it means there’s more out there to invest in the search for oil,” Vacker said. “Companies are more likely to go out farther to drill in deeper water.”

Vacker declined to say what the Exmar contract was worth to LoneStar Marine.

The company arrived in Galveston in 2003, taking over a repair yard that had been idled by First Wave Marine/Newpark Shipbuilding a few years before when island shipyards were struggling.

LoneStar Marine, which previously had a landlocked Houston site, moved to the island specifically to take on bigger projects such as the one it just completed, officials said. Being near water allows it to put projects directly on barges, officials said.

LoneStar Marine, with more than 100 employees, owns 85,000 square feet of warehouse and office space on 28 acres just north of Harborside Drive.

Industry Energized

Booming energy and marine industries have created between 400 and 500 full-time jobs on the island in the past 12 months, said Jeff Sjostrom, president of the Galveston Economic Development Partnership.

Last month, Rolls-Royce Commercial Marine broke ground on a 50,000-square-foot facility on Pelican Island, where it will overhaul propulsion equipment used by the offshore and marine industries. Eventually, Rolls-Royce could employ about 100 people, officials have said.

Rolls-Royce is subleasing space from Gulf Copper Dry Dock and Rig Repair, which in 2005 revived a shipyard on 110 acres. Including contractors, Gulf Copper employs about 1,000 people.

Sjostrum said the partnership has taken notice of the energy-driven growth and has revived a task force to attract more offshore and maritime industry to the island. Jayson Levy, a former chairman of the partnership, is heading up the task force.

Sjostrum likens growth of offshore support services on the island to the residential development boom.

“It’s just amazing,” he said.

Crude oil prices have touched $110 per barrel in international market. India's public sector marketing companies have to face losses in this connection. It is noticeable that at present we have to import more than 75 per cent crude oil for our energy requirements. The coming years could see this requirement touching 90 per cent. The reason behind this is not lowering of prices of crude oil and continuous demand of energy in China, India and other developing countries.

In such countries the governments give subsidy on petro products, due to which its demand does not come down even when the price of crude oil goes up. The Organisation of Oil Exporting Countries (OPEC) has decided not to increase production of crude oil, even if its price keeps on rising. With the value of the dollar against the Euro falling and continuous concern over its supply has also led to unexpected hike of crude oil price.

Taxes are already high in India and the government has come out with ways to solve this problem by issuing oil bonds to meet losses. However, it is not necessary that a permanent solution may be arrived at this way. The government is the biggest consumer of oil in India. Other sectors come after it. First of all, it is necessary that the consumption of oil should be decreased. Efforts should also be made for saving oil. Use of private vehicles should be controlled and the traffic should be made easier and public transport should be made popular.

Buses and car pool system should be developed to carry employees/officials to and fro from office. Rationing system could also be followed. OPEC should also take steps to control oil prices in international market. In the present circumstances saving of oil should be enforced. Research for alternative fuel should be carried out.

Oil fell by around a dollar as end of week profit-taking and concerns over the health of crude's recent rally knocked the top off yesterday's record price.

At 4.00 pm, New York's WTI crude for April delivery was down 87 cents at 109.46 usd per barrel, having yesterday traded to a new all-time high of 111.00 usd.

In London, Brent crude for April delivery was down 84 cents at 106.70 usd per barrel, having yesterday touched 107.88 usd, its highest ever price.

Crude prices have spiked to a series of record highs in recent sessions, as investors poured into oil in a bid to guard against historic dollar weakness. But with the US economy possibly already in recession, and economic fears heightened today by news Bear Stearns has had to seek emergency funding, crude's recent gains appear to be detached from market fundamentals.

A US recession should see demand growth slow, while rising crude inventories point to decent supplies heading into the second quarter, when crude usage is generally at its lowest.

"Oil prices are treading in dangerous territory as oil and gasoline are being played more as a hedge against the dollar and has little regard for supply and demand," said Alaron trader Phil Flynn in Chicago.

But while prices have eased today, few investors are confident of calling a top on the market, despite an unsupportive fundamental backdrop. The dollar has tanked to another record low against the euro, possibly encouraging more hedging activity in crude next week, while also making prices cheaper for overseas investors.

MF Global analyst Ed Meir said: "With the sinking dollar providing support, the path of least resistance seems to be higher still," though he warned that markets could be dangerously overbought, with the risk of a sharp decline in prices not to be ruled out.

OPEC, the producer's cartel responsible for some 40 pct of global oil supplies, today revised its monthly estimation for US economic growth down, but kept its oil demand figures largely unchanged at 87 mln bpd for 2008.

Last week, the group decided to hold production quotas steady, despite pressure from the US to increase output to help cool record prices.

While OPEC is not due to meet again until September, the cartel said it would, "continue to closely monitor ongoing market developments and as always stand ready to take the necessary measures in line with their commitment to market stability and ensuring adequate supplies."

OPEC has consistently blamed recent price gains on market speculation, geopolitical tensions, and the weakening dollar, rather than a lack of supplies in the market.

Some have explained the recent record highs seen in oil and other commodity markets, set against the backdrop of an economic slowdown, as indicative of a broader trend.

Goldman Sachs analysts have argued that booming demand from developing nations, increased resource nationalism, and decades of underinvestment in commodities has created an environment where prices can continue to rise despite a slowing economy.

"The most recent rise in commodity prices is simply the extension of the structural bull rally in commodities that is now in its ninth year, and the fact that the rally continues in the midst of an economic slowdown simply serves to highlight the fact that this bull rally is structural, not cyclical," analysts at Goldman's said, warning that prices will probably remain at higher levels until significant investment increases production capacity to a level capable of meeting future demand projections.

"Solving the politically driven supply constraints will be a very difficult and protracted process which will likely lead to explosive prices in the next couple of years, with oil prices potentially spiking toward 175 usd a barrel, particularly should growth in the G7 re-accelerate in 2009 and beyond."

Goldman Sachs was one of the first investment banks to predict oil prices at 100 usd a barrel. They recently increased their 2008 average price forecast to 105 usd a barrel.

Public sector oil companies would invest Rs 229,071.5 crore in oil and gas exploration, fuel retailing, refineries and petrochemicals, during the 11th Plan Period (2007-2012).

In a written reply in Lok Sabha, minister of state for petroleum and natural gas, Dinsha Patel, said Rs 150,932.49 crore would be spent on oil and gas exploration in India and abroad, Rs 62,582.10 crore on refining and marketing and Rs 15,321 crore on petrochemical business.

Oil and Natural Gas Corp (ONGC) will invest Rs 75,983.77 crore in domestic E&P while its subsidiary ONGC Videsh Ltd has budgeted Rs 45,332.87 crore in overseas oil and gas hunt. Oil India Ltd has earmarked Rs 13,439.02 crore and GAIL India Rs 10,326.83 crore, the minister said.

Indian Oil Corp has planned an investment of Rs 28,567.75 crore in refining and marketing in 2007-12, Bharat Petroleum Rs 11,344.80 crore and Hindustan Petroleum Rs 8,714 crore. IOC also plans to invest an additional Rs 11,844.10 crore in petrochemical plans while GAIL has projected Rs 1,618 crore.

To a separate question, Patel said IOC, BPCL and HPCL plan to set up 1,830 new petrol stations in 2008-09.

Of these, IOC would set up 930, HPCL 498 and BPCL 380. He said oil retailers are at present operating 306 auto LPG dispensing stations in the country. They would add another 158 next year.

"Auto LPG sale during April-January was 170,000 tons as against 108,000 tons during the corresponding period of last year, showing a growth rate of 57.4%," he said.

The government, he said, has not given approval for use of domestic LPG in vehicles. As per the auto-LPG Control Order, only imported or import-substituted auto LPG can be used in vehicles.