BP taking oil from Iraq as payment

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ABU DHABI (Reuters) – BP has been lifting more crude oil cargoes in the past couple of months as payment for its work in southern Iraq, and is comfortable with that level of shipments, a senior executive of the oil company said on Monday.

Low oil prices and the fight against Islamic State have forced Baghdad to delay billions of dollars of cash payments which it owes to international oil companies (IOCs), so they have been allowed to take oil shipments instead.

Michael Townshend, BP’s president in the Middle East, ‎said current total production from Iraq’s giant Rumaila field was about 1.4 million barrels per day and was expected to remain steady in 2015.

“In terms of the position we have on Rumaila, the payments have picked up and I’m comfortable where they are,” he told reporters in Abu Dhabi.

“We get paid by liftings…either out of Ceyhan or out of the south…We certainly got more liftings in the last couple of months.” He did not give details of the liftings.

BP has also extended an agreement with Iraq’s Ministry of Oil to help arrest declining production at the huge northern Kirkuk oilfield, Townshend said. Kirkuk is currently disputed between the central government in Baghdad and Iraq’s Kurdish region.

“We had a letter of intent, which was for a year, and we extended that until the end of this year because there was a time last year where we couldn’t do anything productive.”

Under the deal, BP works on the Baghdad-administered side of the border with the Kurdish region, on the Baba and Avana geological formations. Kirkuk’s third formation, Khurmala, is controlled by the Kurdistan regional government.

BP, along with other IOCs, is in talks with Baghdad ‎over the technical service agreements under which they develop Iraq’s southern fields. Investments in the fields are made by the foreign firms, which are then supposed to receive per-barrel fees.

But low oil prices have made this arrangement difficult for the financially strapped Baghdad government. Iraq’s finance minister told Reuters in March that Baghdad was planning to change the way it operated exploration and production contracts with companies such as Royal Dutch Shell, BP and Exxon‎.

This may eventually move Iraq for the first time to production-sharing contracts, in which revenues are divided, from service contracts in which oil firms are paid a set fee.

Townshend said IOCs had presented the Ministry of Oil with some proposed amendments to their contracts.

“‎They’ve asked for our ideas – they’ve asked all the IOCs for ideas,” he said, declining to comment on whether the ministry had responded.

(Reporting by Rania El Gamal and Maha El Dahan; Editing by Andrew Torchia)

Read the original article on Reuters. Copyright 2015. Follow Reuters on Twitter.

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Tim Yeo: I ‘thought’ humans were to blame for global warming….err…….

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The chairman of the Commons Energy and Climate Change committee said he accepts the earth’s temperature is increasing but said “natural phases” may be to blame. Such a suggestion sits at odds with the scientific consensus. One recent survey of 12,000 academic papers on climate change found 97 per cent agree human activities are causing the planet to warm.

Mr Yeo, an environment minister under John Major, is one of the Conservative Party’s strongest advocates of radical action to cut carbon emissions. Or at least he was one of the strongest advocates of radical change to cut carbon emissions until this. His comments are significant as he was one of the first senior figures to urge the party to take the issue of environmental change seriously. He insisted that the action to cut carbon emissions is “prudent” given the threat climate change poses to living standards worldwide. But, he said, human action is merely a “possible cause”.

Asked on Tuesday night whether it was better to take action to mitigate the effects of climate change than to prevent it in the first place, he said: “The first thing to say is it does not represent any threat to the survival of the planet. None at all. The planet has survived much bigger changes than any climate change that is happening now.

He went on: “Although I think the evidence that the climate is changing is now overwhelming, the causes are not absolutely clear. There could be natural causes, natural phases that are taking place.”

“But there is at least a risk that the increased concentration of greenhouse gases in the atmosphere is a possible cause. We’ve just gone through the 400 parts per million [a measure of the atmospheric concentration of CO2] this year. I think a prudent policy would say if we can do things about that which are no-regrets polices like being efficient in the use of energy, looking at none-fossil fuel sources, I think that’s prudent to do so.”

Mr Yeo has previously spoken with great certainty about the science of climate change. He said in 2009: “A significant number of core Conservative voters – mostly among older people – are reluctant to accept the evidence. I don’t think they [doubting Tory MPs] will be a significant influence in the next parliament and will gradually diminish in the population.

“The dying gasps of the deniers will be put to bed. In five years time, no one will argue about a man-made contribution to climate change.”

Mr Yeo, who was speaking to an audience of energy industry representatives and diplomats at the Westminster Russia Forum, renewed his call for the Government to build a third runway at Heathrow. Now to any political outsider this would constitute a massive about face, whereas to Mr Yeo this is probably nothing more than an ingratiating tug of his forelock, towards the luminous moneys of global corporatism.

(based on a Telegraph article)

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Shell accused of strategy risking catastrophic climate change

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Royal Dutch Shell has been accused of pursuing a strategy that would lead to potentially catastrophic climate change after an internal document acknowledged a global temperature rise of 4C, twice the level considered safe for the planet. A paper used for guiding future business planning at the Anglo-Dutch multinational assumes that carbon dioxide emissions will fail to limit temperature increases to 2C, the internationally agreed threshold to prevent widespread flooding, famine and desertification.

The revelations come ahead of the annual general meeting of Shell shareholders in the Netherlands on Tuesday, where the group has accepted a shareholder resolution demanding more transparency about the group’s impact on climate change.

Hundreds of environmentalists took to the seas off Seattle in kayaks, canoes and paddleboards on Sunday to protest against the company’s’s controversial plans to drill in the Arctic Ocean. The “Shell No” protest was held close to where Shell’s Polar Pioneer drilling rig is docked. One banner read: “We can’t burn all the oil on the planet and still live on it.”

Ben van Beurden, the Shell chief executive, has repeatedly stated that the fossil fuel giant is a responsible company that fully accepts the need to counter manmade global warming, has campaigned for a tax on greenhouse gas emissions, and is moving its focus from oil to cleaner fuels such as gas.

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But an analysis of Shell’s New Lens planning document points to an acceptance that world temperatures will rise to a level that the Intergovernmental Panel on Climate Change argues would have a severe and widespread impact. A 4C global rise by 2100 would entail a sea level rise of between 52cm and 98cm, leading to widespread coastal flooding. There would be widespread risk of animal and plant extinctions and global agriculture would be severely hit. A 4C average would also mask more severe local impacts: the Arctic and western and southern Africa could experience warming up to 10C.

The Shell document says: “Both our (oceans and mountains) scenarios and the IEA New Policies scenario (and our base case energy demand and outlook) do not limit emissions to be consistent with the back-calculated 450 parts per million (Co2 in the atmosphere) 2 degrees C.”

It adds: “We also do not see governments taking steps now that are consistent with 2 degrees C scenario.”

Environmentalists said the presumptions undermine Shell’s ability to talk with authority on climate change.

Charlie Kronick, climate campaigner at campaign group Greenpeace, said Shell and IEA saw fossil fuels continuing to be burned, with the earth facing temperature rises of 3.7°C or 4°C in the short term, mounting to 6°C later on.

“What I don’t see is a realisation from Shell about what exactly would happen to its business if climate change escalated dramatically beyond what is safe with all the negative consequences in the world for food and water never mind energy,” said Kronick.

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Louise Rouse, an investor relations specialist and consultant to Greenpeace, said the New Lens document undermined Shell’s claim that ongoing oil and gas exploration helps raise living standards in the developing world by supplying the energy for rapidly expanding economies.

“There is an incoherence at best between oil companies on the one hand positioning themselves as being on the side of the world’s developing countries and while on the other actively pursuing strategies which will entail catastrophic climate change which we already know is having a significant impact on the global south,” she said.

Friends of the Earth in the Netherlands, which has carried out its own review of activities by the Anglo-Dutch oil group, said the company often argues that it is moving away from oil towards cleaner gas but has often concentrated on the most carbon intensive forms of gas such as liquefied natural gas. Shell’s carbon dioxide emissions have risen in 2014 and are set to increase further as it expands the business through a planned £47bn takeover of rival BG.

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Shell declined to comment formally on the New Lens scenarios but oil industry experts said they were not meant to be a business blueprint. Instead, they represent “plausible assumptions and quantification” designed to make executives consider events that may be only remotely possible. The expert added: “Scenarios are not intended to be predictions of likely future events or outcomes.”

The Guardian’s Keep it in the Ground campaign seeks to persuade the Wellcome Trust and the Gates Foundation to divest themselves of their shareholdings in fossil fuel companies. According to the latest figures, Wellcome held a stake of £142m in Shell as of September 2014. The Gates Foundation held £6m of Shell’s shares at the time of its latest tax filing in 2013.

The Anglo-Dutch group said the BG takeover would expand its presence in controversial deep-water activities – many of the planet’s untapped fossil fuel resources are now in ocean regions that are difficult to access – but said it would also increase its presence in liquefied natural gas, a cleaner fossil fuel than oil.

It added: “By combining BG’s portfolio and skills set with Shell’s capabilities, we can deliver a step change in the growth priorities for both of our companies. This means more deep water and more LNG, plays where we have strong profitability and capabilities.”

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An excerpt from ‘The Guardian’ article written by Terry Macalister, 17 May 2015