Radioactive material from a military base in Latvia is thought to have been thrown into Swedish waters.

For many the biggest shock is that the Swedish government may have known at the time and done nothing about it.

The partly enclosed Baltic Sea is known as one of the most polluted seas in the world.

But now it seems it was also used as a dumping ground for Russian nuclear waste and chemical weapons.

According to a report on Swedish television, Russian boats sailed out at night, to dump barrels of radioactive material, from a military base in Latvia, into Swedish waters.

And even though the Swedish government at the time reportedly knew this, no action was taken to find the waste.

The current government in Stockholm now wants the politicians, who were then in charge, to explain why they did nothing to find the barrels.

The Baltic Sea is semi-enclosed, so it takes a long time to flush out toxins. This makes it particularly vulnerable to pollution.

And after years of untreated waste from Russia’s cities and heavy industries, scientists say that the Baltic is in danger of becoming a dead sea.

Next week high-ranking politicians from those countries bordering the Baltic, including Russia, are due to attend a summit in Helsinki to discuss how to save it.

But if reports about Soviet nuclear waste being dumped prove true, then Russia will have even more accusations of pollution to answer.

Gas trade would also become less dependent on pipeline supplies in the long term should geologists unearth unconventional reserves, such as shale gas or coalbed methane, close to areas of high consumption.

“The old picture – three gas markets, Europe, Asia and North America, with no connection as far as prices are concerned – is breaking down,” Ruehl said in an interview. “Every large gas exporter will have more of an uphill struggle.”

The United States last year outpaced Russia as the world’s largest gas producer for the first time since 2001, largely due to an unforeseen boom in shale gas production. Analysts say this, coupled with higher LNG output, could lead to a gas glut.

Ruehl said about 12% of gas produced in the Atlantic basin last year ended up in Asia, compared with zero in 2000. As spot trade replaces long-term contracts, pipeline gas will find it harder to compete in the long term, he said.

“The first big winner of the disappearance of long-term contracts will be the customer. It means lower prices,” said Ruehl, who formerly represented the World Bank in Russia.

“The second winners would be those countries and companies where new gas resources become accessible. The third winners will be those companies that are flexible enough to get a head start.”

Russia, which launched its first LNG plant last year on the Pacific island of Sakhalin, will have to respond. “Russia will be forced to price itself into consumer markets,” Ruehl said.

While China, which shares a long border with Russia, should be a natural market for state-run gas export monopoly Gazprom , Ruehl said cracking this market would not be easy.

Natural gas accounts for only 4.5% of China’s primary energy demand, he said, and Beijing is developing its industry at a time when unconventional gas and LNG trade are emerging.

“The Chinese are businessmen. What they are likely to do is to make use of this kind of flexibility at a time right now when LNG prices are very low.”

Russia is the largest gas-producing nation within the 11-member Gas Exporting Countries Forum. A Russian, Leonid Bokhanovsky, is the organisation’s secretary-general.

Asked about the prospects for the organisation – sometimes informally dubbed the “Gas Opec” – Ruehl said: “How do I recognise when we have a globally integrated gas market? I’ll probably recognise it by the emergence of a cartel.”

In oil markets, Ruehl said output cuts introduced in late 2008 by Opec had generally been very well observed. This means, however, there is plenty of capacity waiting to come on stream.

“We are in a world where you have excess capacity in Opec countries of about 6 million barrels per day. A little over a year ago, before the price spike, we had about 2 million barrels per day,” he said.

Ruehl said average annual demand growth for oil between 2000 and 2007 was 1.1 million barrels per day.

“Even if the good years were to return tomorrow – which I think is very unlikely given the global economic situation – it would still take more than three years to burn through this excess capacity and go back to a market as tight as in 2008.

“That means, for the foreseeable future, it’s very unlikely that we will see massive price spikes.”

He said supply and demand fundamentals, not speculative capital, was always the driving factor behind oil prices.

“Financial investors… don’t determine the direction in which the train is going. They jump on the train.”

Upstream staff Thursday, 04 February, 2010, 09:56 GMT

The FEED work is for necessary upgrades to extend the life of the Norsea Gas Terminal. The work will also include some minor work at the Europipe Metering Station (EMS) and the Europipe Receiving Facilities (ERF), said Gassco in a statement.

Work on the contract will start this month and is due to be finished by the end of the year.

The NGT facilities, in Emden, have been in operation since 1977 and were constructed to receive the gas coming from Norway through the Norpipe pipeline.

The Europipe Metering Station (EMS), also in Emden, was constructed later in connection with the Europipe I pipeline in 1995.

The Europipe Receiving Facilities (ERF) are in Dornum and were established for the Europipe I pipeline in 1995 and extended in connection with the Europipe II pipeline in 1999.

Newswires & Staff Thursday, 04 February, 2010, 07:45 GMT

Excluding one-off items, which amounted to a charge of $1.6 billion, the result was $2.77 billion, short of an average forecast of $2.87 billion from a Reuters poll of 10 analysts.

Earnings per share fell to 19 cents from 78 cents previously. Quarterly cash flow from operating activities fell 45% year-on-year to $5.66 billion.

Total revenue for the quarter was $83.42 billion, compared with $82.7 billion previously.

Oil prices recovered in the quarter but gas prices were much lower than in the same period a year earlier, while refining margins collapsed to their lowest level in almost 15 years.

Fourth quarter oil and gas production fell to 3.3 million barrels of oil equivalent per day from 3.4 million boe per day a year earlier.

“Our fourth quarter 2009 results were impacted by the weak global economy,” said Shell chief executive Peter Voser. “Oil prices have increased compared to a year ago, but gas prices and refining margins have declined sharply, because of weaker demand and high industry inventory levels.”

For the full year 2009, Shell reported net profit of $12.52 billion, or $1.60 per basic share, compared with profit of $26.28 billion, or $5.09 per share, in 2009.

Cash flow from operating activities for the year slumped 51% to $21.49 billion.

Total revenue for the year was $285.13 billion, compared with $470.94 billion in 2008.

Shell said it made a $1.76 billion loss in its refining unit and Voser said he was mulling the sale or closure of 15 % of Shell’s refining portfolio, even after saying it planned to close its Montreal facility last month.

Voser said the company had completed a restructuring and cost-cutting exercise launched in the middle of last year. The programme saw a total of 5000 jobs cut, or up to 10% of the company’s workforce in certain targeted areas.

He said the company had cut underlying operations costs by $1 billion in the fourth quarter and by $2 billion in the full year.

Shell’s results compare with a 23% drop in fourth-quarter net income at top supermajor ExxonMobil, and a 37% drop at fellow US giant Chevron.

However, UK rival BP managed to report a 33% rise in profits in the quarter thanks to its low reliance on refining and natural gas.

Voser said the company has started up to Sakhalin 2 project in eastern Russia and the BC-10 project off Brazil in the year, and had taken final investment decisions on the Gorgon liquefied natural gas project off Western Australia and the Caesar/Tonga project in the deepwater Gulf of Mexico.

The company has also launched a front-end engineering and design process for a floating LNG facility for the Prelude field off Australia.It said it had also participated in 10 major discoveries worldwide.

In the past year, the company was awarded a contract to become lead operator of the Majnoon field in Iraq, where production is expected to rise to 1.8 million barrels of oil equivalent per day from 45,00 boe per day currently. The supermajor also won a 15% stake in the West Qurna 1 field in southern Iraq.

In its upstream operations, Shell produced an average 3.33 million boe per day in the fourth quarter, down from 3.42 million boe per day a year ago. It produced an average 3.15 million boe per day over the full year, down from 3.25 billion boe per day in 2008.

Shell said its underlying production rose by 200,000 barrels in the fourth quarter, from new production and project ramp-ups, offsetting any field declines.

The supermajor said it earned $2.54 billion in its upstream operations in the fourth quarter, down 46% on a year ago, on capital investment of $6.68 billion.

For the full-year, the upstream returned $8.35 billion, down 68%, on annual capital investment of $23.95 billion.

Shell said the upstream results reflected lower natural gas and LNG prices, lower oil production and redundancy provisions as it sought to restructure and cut costs.

The regulator also warns that a significant number of consumers may not be able to afford the higher energy prices they will have to face.

Ofgem says there is “reasonable doubt” about whether the UK’s energy market will be able to deliver sustainable supplies in the coming decade.

The industry needs £200bn of investment, Ofgem said.

Faced with unprecedented challenges we’re looking at new solutions to protect security of supply Alistair Buchanan, Ofgem chief executive

However, Ofgem believes energy companies may need stronger incentives before committing that level of funds.

In its report, Ofgem says the UK’s open competitive energy market could fail to deliver secure, sustainable supplies in the coming decade.

Chief executive Alistair Buchanan told BBC News: “Faced with the unprecedented challenge of carbon prices, the unprecedented challenge of the credit crunch and the unprecedented challenge of maintaining international supplies, we’re looking at new solutions to protect security of supply.”

Among its range of solutions Ofgem suggests that companies should be required to deliver more generation capacity and gas storage.

It also suggests that the industry should revert to a form of centralised market control, which if adopted, would amount to the biggest shake up in the industry since privatisation.

The MSCI Asia Pacific Index gained 0.9 percent today with materials producers and energy companies leading the climb. Oil advanced yesterday on data showing sales of previously owned homes in the U.S. grew in December following a record drop. The dollar fell today against a basket of major currencies, prompting demand for commodities.

“If people are optimistic about the economy and buying equities, then that will drive oil prices higher,” said Clarence Chu, a trader with options dealer Hudson Capital Energy in Singapore. “Having the dollar index drop below 79 is enough to move oil higher.”

Crude oil for March delivery rose as much 59 cents, or 0.8 percent, to $77.82 a barrel in electronic trading on the New York Mercantile Exchange. It was at $77.71 at 4:20 p.m. Singapore time. The contract earlier fell as much as 45 cents to $76.78. Yesterday, it gained 3.8 percent, the most since Sept. 30, to settle at $77.23.

The dollar index, a measurement of the greenback versus six trading currencies, dropped 0.14 percent to 78.91 today.

Brent crude oil for March settlement rose as much as 65 cents, or 0.9 percent, to $76.71 a barrel on the London-based ICE Futures Europe exchange. The contract earlier fell as much as 43 cents to $75.63. Yesterday, it rose 4 percent, the most since Nov. 16, to settle at $76.06.

The Gulf Arab state is looking at exploiting unconventional reserves as it aims to boost domestic supply, and OMV is among companies competing for future deals.

“We have a number of project ideas,” Reuters quoted OMV’s director of business development in the Middle East, Klaus Angerer, as telling reporters on the sidelines of an energy conference.

“Our feeling is there will be a positive response. It’s very, very preliminary. Abu Dhabi is interested in talks with companies like ours.”

OMV is 20% owned by the Abu Dhabi government through the emirate’s investment unit the International Petroleum Investment Corporation (IPIC). It raised its stake from 19.6% in January.

“We have a partly local heritage anyway, with the IPIC stake. We’re very committed to working here,” he said.

OMV had experience in working with mature and complex reservoirs, Angerer said.

“We have learned how to squeeze out the last barrel from existing reservoirs and this is an experience which we want to apply wherever we are invited,” he added.

The UAE and ConocoPhillips have formed a joint venture to pump gas from the sour gas Shah field through a $10 billion project. The gas has a high content of around 30% of potentially deadly sulphur dioxide, making it tougher and more expensive to produce than more conventional gas reserves.

Future similar projects would interest OMV, Angerer said.

Companies are jostling to position themselves in the UAE in the hope the government would decide to change the structure of UAE’s oil and gas concessions when existing deals expire.

“I think that is safe to say for almost everybody,” Angerer said, when asked if OMV was looking for a stake in future concessions.

The UAE’s oil and gas concessions are split between an onshore unit, Adco, an offshore unit, Adma-Opco and a third unit for the giant Upper Zakum offshore field called Zadco.

Zadco’s concession would expire in 2014, while the Adma-Opco concession would expire in 2018.

The UAE government is considering whether to renew the concessions or to break them up into smaller concessions on a field-by-field basis.

Any changes could give opportunities for long-term involvement for companies that to date have no participation in the sector.

Abu Dhabi holds most of the UAE’s oil and gas reserves. The UAE is the world’s third-largest oil exporter.

OMV and IPIC signed a memorandum of understanding in 2007 to look into possible co-operation on international oil and gas production opportunities. No projects had yet emerged from the MOU, but the two companies were looking at possibilities in North Africa, the Caspian and the Middle East, Angerer said.

The main deck will measure 100 m in length, 47 m in width, and 50 m in height. It is expected that the structures’ main deck, weather deck module, flare boom, and first and second bridges will leave the Heerema Zwijndrecht location in May or June for its final destination off Norway. Once completed, the topsides will weigh more than 13,000 tons, excluding power-from-shore module and living quarters.

Heerema Zwijndrecht was awarded the fabrication and integration contract in March 2007 for the topsides with the 350-ton flare-boom structure of which fabrication started in November 2007. It also received the award for the fabrication of the 2,000-ton weather deck module on June 23, 2009.