Thailand's Lanna Resources to up coal production

Coal distributor Lanna Resources has set a five-year, US$7.5-million (Bt249 million) plan to increase annual production from its existing mines to 6 million tonnes.

The plan will be implemented next year.

Business-development director Sihasak Arirachakaran said the increased production would come from its Singlurus Pratama (SGP) and Lanna Harita Indonesia (LHI) mining subsidiaries in that country.

SGP, which Lanna just acquired in the third quarter, is not yet producing at full capacity, while LHI is producing at full capacity of 2 million tonnes annually.

Lanna's coal price will remain at $50 a tonne next year, the same as this year, due to fixed advance contracts. However, the company predicts the global coal price will rise next year.

The company will restart ethanol production by the end of this year once it secures enough molasses, the main raw material.

However, Lanna has projected a negative outlook for the overall ethanol industry next year, due to the high cost of molasses, which stems from a shortage, Sihasak said. The company has had no molasses stock since September.

The new production capacity of the company's second ethanol plant has not yet increased the plant's revenue contribution, and this will reduce the margin next year, from Bt5 to Bt7 a litre this year.

Sihasak said revenue and net profit would "skyrocket" in 2011 on the increased coal and ethanol production.

He said the company would enjoy an improved net profit next year, in the same proportion as this year, due mainly to annual coal production increasing from 2 million tonnes to 3.5 million.

Lanna achieved revenue of Bt7.5 billion last year for a net profit of Bt471 million. In the first nine months of this year, revenue was Bt3.9 billion for a net profit of Bt557 million.

Ethnic Chinese nabbed for stealing secrets, espionage

BEIJING (Reuters) - The United States is seeking the release of Chinese-born, American geologist Xue Feng, who was detained two years ago on state secrets charges after negotiating the purchase of an oil industry database.

The following is a chronology of cases involving ethnic Chinese executives of foreign companies and Chinese-born, overseas-based academics, reporters and dissidents charged with stealing state secrets, espionage or other crimes.

March 1996 - An official of the state-owned China National Offshore Oil Corp was detained for leaking state secrets to a Chinese employee of Royal Dutch Shell who was released after spending a year largely incommunicado. Shell was in talks with CNOOC then to build an oil refinery.

October 1996 - China freed a Chinese employee of Swiss-owned

SBC Warburg, detained for one month on suspicion of leaking state

secrets, apparently for having helped prepare materials for company clients on the trend of China's currency, the yuan.

November 1999 - Australian businessman James Peng, held in a Chinese prison for six years, was released on parole and deported. He had been abducted from a hotel in Macau in October 1993, spirited across the border to China and sentenced in 1996 to 18 years in jail on bribery charges.

January 2000 - Song Yongyi, a Pennsylvania-based scholar and expert on China's chaotic 1966-76 Cultural Revolution, was released after five months in a Chinese prison on charges of gathering state secrets. He has since become a U.S. citizen.

July 2001 - Li Shaomin, a Hong Kong-based U.S. professor, was convicted of spying for Taiwan, but spared a sentence and released after spending five months in custody. The conviction came one day after Beijing won its bid to host the 2008 Olympics. Continued...

China refiners agree 12 pct rise in 2010 Saudi imports

BEIJING/SINGAPORE, Nov 20 (Reuters) - Chinese oil firms have agreed to buy a total of about 1.04 million barrels per day of crude from Saudi Arabia under a term pact finalised for 2010, roughly 12 percent above the 2009 contract level, trading sources told Reuters.

The pace of growth quickens from a rate of under 10 percent seen this year over 2008, as demand in the world's No.2 oil consumer looks poised to recover more on the back of China's solid economic expansion.

The 2010 amount includes about 200,000 barrels per day of supplies to Fujian Refining & PetroChemical Co Ltd (FREP), which is 25 percent owned by state-run Saudi Aramco.

S. Korea to buy coal from China for US$85-90/t in 2010

Nov. 19 MetalBiz--Head of one S. Korea power company on November 18 unveiled that S. Korea’s power companies may purchase coal from China at the contract price of more than U.S.$85-90 per ton in 2010.

The management said that this year power company bought coal with 6,080 kilo calories per kilogram at the price of U.S.$82 per ton.

He added that if in March of 2010, that is, before the annual contract price talks, other Asian countries’ freight and coal price continues rising, at that moment, China only increases the price.

He also claimed that it is expected that China’s purchase volume in 2010 will be same as the 2009 level, and therefore China’s price is still higher than the price of Australia and Indonesia.

He stated that S. Korea’s coal import contract price is usually line with Japanese importers’ price.

According to China Coal Transportation and Distribution Association (CCTD)’s data, till November 16, Datong’s superior-quality mixed coal with 5,800 kilo calories per kilogram, is quoted by Qinhuangdao at the spot benchmark price of 680-700 yuan per ton, increasing by 17% than that in the beginning of 2009. The warming-up demand in power and industry pushes up coal price.

China Coal-Spot prices up, plant stocks sufficent

SHANGHAI, Nov 19 - Spot coal prices in Qinhuangdao, China's top coal shipping port, continued climbing this week, as a cold spell aroused concerns over coal supply, but so far most power plants are sufficiently stocked, industry officials and analysts said on Thursday.

Early and heavy snow in northern and central China, including the top coal producing province Shanxi, in the last 10 days disrupted road transportation and slowed the flow of coal, prompting fears of a repeat of severe coal and power shortages in central China in early 2008.

"All 541 power plants connected to the State Grid have reasonable coal stock levels. None has coal stocks lower than alarming levels," said an official of the State Grid, adding that "alarming levels" vary from 3 to 15 days at different plants, depending on their locations and distance from the coal source.

"The influence from the cold spell is almost over," he said.

Average coal stocks at power plants connected to major grids, were enough for 14 days of use, an official with the China Electricity Council said.

But in the eastern province of Anhui, some power plants' coal stocks dropped to a dangerous level just enough for 2 days of use earlier this week, the Anhui Economy and Technology Commission said on its website (www.ahec.gov.cn).

Coal used in Anhui, however, mainly comes from its own coal mines.

QINHUANGDAO PRICES UP, STOCKS DOWN

Coal stockpiles in Qinhuangdao fell nearly 11 percent from a week earlier to 7.6 million tonnes, still higher than the usual levels of 5 to 6 million tonnes, as outflow of coal quickened after foggy and windy weather eased, analysts said.

"The foggy weather around northern ports did cause coal stocks in eastern China's power plants to fall, but since they had just stocked up sufficient coal for the winter, the impact wasn't serious," said the State Grid official.

"And now since the fog has lifted, their coal stocks are being replenished as shipping recovered."

Coal with calorific value of 5,800 kcal/kg (NAR) rose 1 percent from a week earlier to 680 to 700 yuan ($99.6 to $102.5) a tonne, nearly one-year high, according to the Qinhuangdao Seaborne Coal Market(www.cqcoal.com).

Coal with calorific value of 5,500 kcal/kg was quoted in the range of 640 to 660 yuan a tonne, up nearly 2 percent from a week earlier, the website also said.

"Coal prices are likely to be stable in the near term, as downstream stockpiles are decent," said Lu Ping, ananalyst at China Merchants Securities. ($1=6.826 Yuan)

Indonesia coal loading and port details

 (For a related story click on [ID:nJAK435919])

 Nov 19 (Reuters) - Indonesia, the world's biggest thermal exporter of coal, expects to increase production to 230 million tonnes this year, with about 160 million tonnes exported.

 Here are details on some key ports and loading facilities:

 COAL LOADING/ANCHORAGE:

 -----------------------

  Port                           user           Handling

                                                capacity

                                               (tonnes/day)

 ---------------------------------------------------------

 EAST KALIMANTAN

 1. Balikpapan Coal terminal     common user   30,000-40,000

 2. Bontang Coal terminal        Indominco     40,000

 3. Tanah Merah Coal terminal    Kideco        40,000

 4. Tanjung Bara coal terminal   KPC           70,000-80,000

 5. Teluk Adang                  Kideco         8,000-12,000

 6. Teluk Apar                   Various        8,000-10,000

 7. Muara Berau/Muara Jawa       Various        8,000-10,000

 8. Muara Pantai                 Berau Coal    12,000-20,000

 9. Tarakan                      Mandiri IP     8,000-10,000

 SOUTH KALIMANTAN

 1. North Pulau Laut             Arutmin       35,000-40,000

 2. South Pulau Laut             common user   35,000-40,000

 3. Jorong  anchorage          Jorong Barutama  8,000-12,000

 4. Sebuku  anchorage          Bahari Cakrawala 8,000-12,000

 5. Muara Satui  anchorage     Arutmin, various 8,000-12,000

 6. Taboneo  anchorage         Adaro, various   8,000-20,000

 7. Tanjung Petang anchorage   Arutmin,various  8,000-12,000

 SUMATRA

 1. Kertapati Jetty            Bukit Asam        5,000-6,000

 2. Muarasabak (anchorage)     Various           6,000-7,000

 3. Pulau Baai                 Various           6,000-7,000

 5. Tarahan Coal Terminal      Bukit Asam      25,000-30,000

 6. Teluk Bayur port           Bukit Asam,       8,000

 COAL DISCHARGE PORTS IN JAVA:

 Port                         User               Capacity (tonnes/day) ------------------------------------------------------------

 1. Cigading, W. Java     Krakatau Steel         10,000

                          Indocement

 2. Ciwandan, W. Java     Common user             6,000

 3. Suralaya, W. Java     PLN                   20,000-25,000

 4. Cirebon, W. Java      Common User             6,000

 5. Cilacap C. Java       Pelindo III             6,000

 6. Tanjung Jati B        PLN                    35,000

 7. Paiton PEC, E.Java    Paiton Energy Co.     10,000-12,000

 8. Paiton PLN, E. Java   PLN                   10,000-12,000

 9. Paiton Jawa Power     Jawa Power            40,000-45,000

 10. Gresik, E.Java       Semen Gresik            3,500

 TRANSHIPMENT

 -------------------

 Besides coal loading ports, coal producers use transshipment facilities in open seas to load coal from barges to bulk carriers.

 - PT Adaro Indonesia has 4 floating transshipment systems that can load vessels up to 25,000 tonnes per day.

 - PT Berau Coal has a transshipment facility at Muara Pantai in the Sulawesi sea. It uses ship cranes to load coal directly from barges to ships with a loading rate of 12,000 tonnes per day. It also uses a Semi Submersible Trans-shipper to transfer coal to ships from barges by a system of conveyors with a loading rate of 15,000-18,000 tonnes per day.

 - PT Bayan Resources Tbk (BYAN.JK) operates the Kalimantan Floating Transfer Station to load coal onto Cape-size vessels. It has the capacity to load coal to such vessels at a rate of 4,000 tonnes per hour. The firm also owns the Balikpapan Coal Terminal.

 Sources: Indonesia Coal Producers Association, Indonesia Coal Book 2008/2009, PT Adaro Energy (ADRO.JK) website www.adaro.com, Berau Coal website www.beraucoal.co.id, Bayan Resources website www.bayan.com.sg  (Compiled by Fitri Wulandari; Editing by Clarence Fernandez)

Hyperion Power Generation Reactor Design

Here are 18 pages of slides, 8 pages on the Hyperion Power Generation UraniumHydrideNitride Reactor (H/TIdaho Samizdat)

Fuel will be enriched to between 15-19.6% because this small reactor needs more highly enriched fuel to get power levels to point of economic value. Fuel is a uranium nitride alloy. No fuel has been fabricated or tested so far. A system engineer at Hyperion said in an interview INL’s ATR is an option for testing fuel.

Here are 18 pages of slides, 8 pages on the Hyperion Power Generation UraniumHydrideNitride Reactor (H/TIdaho Samizdat)

Hyperion Power Generation Press Release
It has been changed from uranium hydride to uranium nitride-fueled, lead bismuth-cooled, fast reactor for their 'launch' design.

The design that Hyperion Power intends to have licensed and manufactured first will include all of the company's original design criteria, but is expected to take less time for regulators to review and certify than the initial concept created by Dr. Otis "Pete" Peterson during his tenure at Los Alamos National Laboratory. "We have every intention of producing Dr. Peterson's uranium hydride-fueled reactor; it is an important breakthrough technology for the nuclear power industry," noted Deal. "However, in our research of the global market for small, modular nuclear power reactors – aka SMRs – we have found a great need for the technology. Our clients do not want to wait for regulatory systems around the globe, to learn about and be able to approve a uranium hydride system. A true SMR design, that delivers a safe, simple and small source of clean, emission-free, robust and reliable power is needed today – not years from now. As we construct and deploy this launch design, we will continue to work towards licensing Dr. Peterson's design."

Kept quiet until today, this initial design for the company's small, modular, nuclear power reactor (SMR) is the first of several that have been under co-development with staff from Los Alamos National Laboratory. Hyperion Power's market goals include the distribution of at least 4,000 of its transportable, sealed, self-contained, simple-to-operate fission-generated power units

The Design
Overnight costs are estimated by the firm to be $2,000 - $3,000 per KW capacity. The market goal is to generate electricity for < ten US cents per kWh anywhere in the world.

The reactor is intended to meet requirements for dedicated power by hospitals, factories, foundries, government centers, water treatment, or irrigation and desalinization. Resource intensive uses at remote sites include mining and oil production & refining. Military facilities that cannot compromise tactical readiness relative to having enough electricity may find the small footprint of the reactor and ease of transport to be of interest.

China's Oil Demand Remains Strong With 10% On-Year Jump in October

HONG KONG, Nov. 19 /PRNewswire-FirstCall/ -- Platts -- China's apparent petroleum demand in October jumped 10.2% from a year ago as the world's second largest oil consumer ramped up crude processing rates, even as Beijing released a bunch of positive economic data for the month.

Chinese oil demand reached an estimated 33.886 million metric tons (mt) last month compared with 30.75 million metric tons in October 2008, a Platts analysis of official data showed November 19.

October was the second consecutive month Chinese oil demand posted double-digit growth year over year. The country's oil demand climbed by 12.6% in September from a year earlier.

However, the October demand was just a tad higher than September's 33.8 million mt.

Chinese refineries processed a total of 33.29 million metric tons (7.87 million barrels per day) of crude in October, surpassing the previous all-time high of 33.11 million metric tons set in July.

"Chinese industrial production and retail sales rose by more than 16% on year in October according to official data, but the China growth story continues to be driven by domestic demand rather than a recovery in the country's export markets," said Vandana Hari, Asia news director at Platts. "This raises questions about the shape of its economic recovery after Beijing's stimulus package wears out."

"Among short-term factors, expectations of the government announcing a hike in domestic products prices in late October is said to have spurred stockpiling of fuel, which explains the high refining rates," Hari explained.

China raised both gasoline and gasoil prices by Yuan 480/mt ($70.30/mt) effective November 10 in keeping with a product pricing mechanism in force since the start of 2009, which tracks a basket of international crude prices to keep domestic fuel rates broadly in alignment.

Meanwhile, higher crude throughput at the refineries in October coincided with a 12.3% spike in crude imports during the month compared with September and an 11.6% slide in refined products imports month-on-month. October crude imports of 19.33 million metric tons represented a 19.6% increase from a year ago and were the second highest monthly purchase by China historically.

    MONTHLY TRADE DATA IN MILLION METRIC TONS:                    Oct'09  Oct'08  % Chg  Sep'09  Aug'09  Jul'09  Jun'09 May'09     Net crude      imports       18.97   15.86  +19.6   16.83   17.92   19.20   16.31  16.62      Crude      production    16.26   16.55   -1.8   15.72   16.32   16.14   15.71  16.03      Apparent      demand*       33.89   30.75  +10.2   33.80   33.02   34.92   33.35  33.23  

Platts calculates China's apparent or implied oil demand on the basis of crude throughput volumes at the domestic refineries and net oil product imports, as reported by the National Bureau of Statistics and Chinese customs.

The government releases data on imports, exports, domestic crude production and refinery throughput data, but does not give official data on the country's actual oil consumption figure and oil stockpiles.

Platts releases its monthly calculation of China's apparent demand between the 18th and 26th of every month via press release and via its website. Any use of this information must be appropriately attributed to Platts.

For more information on crude oil, visit the Platts website at www.platts.com.

SOURCE Platts

Thai government strictly follows Map Ta Phut recommendation

The government yesterday decided to withdraw draft amendments to Environment Protection Act that comply with the Constitution's Article 67 (2) as recommended by the four-party panel, which is promising to end the Map Ta Phut controversy within five months.

Former prime minister Anand Panyarachun, who is chairing this panel, has promised to take no more than four or five months to solve the problems, particularly the issues surrounding the 76 suspended industrial projects.

"The committee will not point to who is right or wrong, but will instead focus on find facts and exchanging opinions. The idea is to co-exist and not find winners or losers," Anand said.

Though the panel cannot influence the administrative court's injunction, measures to help the 76 projects are expected to come up within four or five weeks. The panel will also find ways to mitigate the impact of 200 projects that may face environmental lawsuits.

"If the government does not comply with the resolutions proposed by this panel, it must take all the responsibilities on it own," Anand said at the press conference.

Prime Minister Abhisit Vejjajiva yesterday promised that the government would listen more to other peoples' opinions before it takes any legal moves. Before making a move on the 76 projects, the government will also wait for the Supreme Administration Court's ruling on the appeal against the lower court's injunction.

The draft, before it was submitted to the Parliament, had failed to win civil society's approval, especially with regard to the way members of the independent environmental body would be appointed or removed by the Natural Resources and Environment Minister.

Meanwhile the National Health Commission expert Detcharat Sukkhamnerd, a member of the joint committee, insisted that the draft withdrawal would not delay the 76 projects and that the private sector was satisfied by the panel's moves.

Vice chairman of the Federation of Thai Industries, Payungsak Chartsutipol, also a member of the panel, said the first meeting at Ban Phitsanulok was peaceful because all parties wanted the same outcome - solving the environmental problems and easing conflicts between industries and local communities. All parties want to ensure that the laws and regulations are applied to all industrial plants nationwide and meet international standards.

"What the private sector is most concerned about is the 76 projects, and the committee has agreed to seek solutions for two scenarios - if the projects are suspended and if they are allowed to continue," he said.

The committee agreed to hold the meeting twice a week and invite environmental law specialists to join. Members would also visit Map Ta Phut on December 5 and 6 to seek more information.

At the next meeting, the committee is set to revise the Natural Resources and Environment Ministry's amendments to the ministerial regulations that would result in environmental impact and health impact assessments.

Anand said the committee was empowered to seek information, including data on illnesses, from relevant agencies regarding Map Ta Phut. Once the resolutions have been completed, the committee will submit them to the government, which will then decide how to proceed.

The former PM has also vowed to revise or improve any government regulations or announcements related to environmental issues for a long-term solution.

Detcharat said the draft should be withdrawn because it was not approved by the civil society. He also said he felt positive toward the panel and believed that it would find the way out for the chronic disputes in the Map Ta Phut area.

Shenhua:over 10% m-o-m fall in Oct. coal sales

Published: 19 Nov 2009 00:32:26 PST

Nov. 18 MetalBiz--Leading Chinese coal producer China Shenhua Energy Co., Ltd announced on November 16 that its coal production stayed stable in October, but sales apparently decreased month on month.

Meanwhile, the company's electricity businesses displayed improving performances last month.

In October, Shenhua produced 17.1mln tons of coal, up by 5.6% year on year, but edging down 1.16% than September.

Its coal sales volume reached 21.2mln tons in October, climbing 11.6% than the same period last year but sliding 10.17% from September, including 1.2mln tons for exports, soaring 20% year on year but plunging7.69% month on month.

Last month Shenhua produced 10.13bln kwh of electricity, up by 40.9% over the year earlier period and 2.32%over September. It sold 9.44bln kwh of electricity, surging 66.5% year on year and 2.28% month on month.

Platts Top 250 Global Energy Company Rankings

The past two years have been some of the most momentous in the history of the oil markets. A frantic commodities bubble redefined record oil prices and sent crude oil soaring to over $147 per barrel (/b) in July 2008. Oil products skyrocketed as well, boosted by unprecedented demand from China in the run-up to the Olympics.

The oil price spikes were followed by freefall, caused by the global recession and a demand vacuum. Crude oil futures dipped below $40/b in December 2008 before rebounding from mid-February back up to over $70/b later in the year, despite continuing recession in the OECD countries.

The boom and bust in prices threw the industry under an unfamiliar media spotlight as the hue and cry from wary consumers grew. While the structure of the energy industry has not undergone an overnight sea change, there has been a shift in tone. From integrated oil & gas companies (IOGs) to electric utilities (EUs), there is a deepening commitment to finding and using clean and sustainable alternative sources of energy.

This has impacted many things from intensifying the search for cleaner sources of energy, such as natural gas, to the way in which crude oil is refined. IOGs are increasingly focused on finding natural gas; technology for extracting gas from shale and methane beds has advanced substantially, which is changing the global balance of energy. This is leading to an increased desire to produce LNG to enable its storage and transportation.

Refining and marketing firms, as well as IOGs, are increasing their production of clean diesel. The pressure to utilize clean alternative sources of energy in electricity generation, particularly in Europe, is impacting the physical infrastructure of electricity grids, which were not designed to deal with intermittent and distributed energy sources.

But despite all this and the roller coaster ride that oil prices have taken, IOGs have retained their global dominance. Thanks in part to last year’s $100 plus crude oil, IOGs carved out the top 13 spots in the 2009 Platts Top 250 Energy Company Rankings™, and took 30 of the top 50 places. Platts rankings are based on a combination of assets, revenues, profits and return on capital invested for listed companies with over $2 billion in assets.

Exxon Mobil Corp retained the number one spot for the fifth year running. US, UK, EMEA and Russian IOGs took two each of the ten top spots with China and Brazil sharing the limelight with one each. Latin America is making a better showing in the top 50 this year; the newly-listed Ecopetrol of Colombia, which wasn’t ranked last year, popped in at 30th on 2009’s list.

Colombia’s mostly state-owned oil company listed about 10% interest in its company on the New York Stock Exchange (NYSE) in September 2008, and is planning to use the money raised on doubling its crude oil production. Brazil’s Petrobras made a leap to 6th place (from 12th in 2008), owing to additions to its reserves resulting from its giant pre-salt layer oil finds.

Asian oil and gas companies took eight of the top 50 places, with PetroChina topping the Asian chart and reaching number nine in the overall top 250. CNOOC grabbed the number two spot in Asia, jumping up five places. Otherwise, the top 50 rankings for all energy companies were dominated by firms from Europe and the Middle East, with 25 places overall. The Americas were second with 17, eight of which were from the United States.

Exploration and production (E&P) companies also benefited from outright oil price spikes and good demand earlier in 2008. Canada’s Encana climbed 19 places to number 16 in the top 250 list. China’s CNOOC leapt 13 places to 21st in the overall table. E&P companies were prominent in the top 50 fastest growing list and made up 30% of the fastest growing companies from the Americas, led by Addax Petroleum, which has recently been taken over by China’s Sinopec, and Southwestern Energy.

Oil price moves also meant that 16 oil storage and transportation companies made the top 250 in 2009 vs 13 in 2008, having reaped the benefits of a contango market which lasted a good part of 2008. Owners of oil storage and natural gas pipelines were the main beneficiaries. Waterborne oil shipping sank along with demand in 2008, but perked up again in 2009 as contango led oil companies to utilize floating storage.

Refining takes it on the chin

The picture for the oil & gas industry was not all rosy, however. Refining and marketing firms, having started 2008 with good demand and healthy margins, suffered greatly from the economic downturn as demand dropped and margins shrank. The worldwide recession heralded a compression in refining margins with people driving less and upgrading to more fuel-efficient cars.

Crude oil prices remained relatively high as the appetite for commodities exposure continued, while products including gasoline and heating oil fell.

ConocoPhillips, which is heavily dependent upon refining, saw its revenues fall by 27% for the financial year 2008. ConocoPhillips fell from number 16 in 2008 to 117th in Platts 2009 rankings. Valero suffered a similar fate, falling from 14th to 138th and is closing down refineries in 2009. Sunoco appeared to have a delayed reaction, largely thanks to diesel demand from Asia, coming in at fourth place in the R&M table and 59th overall.

This year, however, Sunoco is also in the process of shutting down refining capacity. Two Indian R&Ms led the table with Reliance Industries in first place (25th overall). Reliance bested its rivals in Asia, owing to its sophisticated refinery system, which optimizes cheaper heavy crude oil. Indian Oil Corp was second (33rd overall) and Japan was third with TonenGeneral Sekiyu (56th overall).

Major majors

The major integrated oil and gas companies did not have a smooth ride on their way to dominating the top 10. All were hit by falling oil prices in last-quarter 2008 and sinking demand throughout first-half 2009. And, in the US, they narrowly averted a massive strike of United Steelworkers early in 2009, who were negotiating a new contract with Royal Dutch Shell.

The strike could have paralyzed over 50% of the US’s refinery capacity. The US grabbed two spots in the top 10, with ExxonMobil in the number one position and Chevron in second place. ExxonMobil made the top of the list for the fifth year in a row, with revenues of $425 billion. The Western major’s 2008 fourth-quarter net income took a 33% blow, owing to the plunge in oil prices, but then still finished the year with record profits.

In 2009, market conditions have remained challenging, causing ExxonMobil’s net income to drop 66% in the second quarter. The firm faced criticism after output fell in 2008 to its lowest level since Mobil was acquired in 1999. The company is now spending billions to find new reserves. ExxonMobil will also spend over $1 billion at two US refineries, as well as one in Belgium to improve its output of clean diesel by 10%. It also saw start-up this year of production from its new giant LNG trains in Qatar.

Сhevron moved into second place in 2009 from fourth place in 2008, having brought on-stream some significant new fields and improved its upstream revenues by about 50%. Chevron started up new projects in the US Gulf of Mexico and Indonesia in 2008, while it nearly doubled production capacity from the giant Tengiz field in Kazakhstan. Third place Royal Dutch Shell’s $458 billion revenues dwarfed even ExxonMobil’s. Voted “Energy Company of the Year” at the 10th annual Platts Global Energy Awards last year, Shell is investing heavily in LNG production as well as carbon capture and storage.

It has also, in 2009, made a major commitment towards Floating LNG, while work progresses in Qatar on what will be the world’s largest Gas-to-Liquids plant. BP moved up one place to fourth position, having finally resolved the battle for control over TNK-BP with partners Alfa-Access-Renova in September 2008. BP has also been sorting out several problems with its US refineries, including Texas City, which suffered a fatal explosion in 2005. BP’s fortunes may, however, be turning after it made a giant oil find in the Gulf of Mexico in September 2009.

PetroChina was the only Asian IOG representative in the top ten. Russians Rosneft and Gazprom came in eighth and ninth, while Italy’s ENI was number ten. Gazprom ranked number two in terms of profitability, second only to ExxonMobil.

The tiger continues to roar

China, Hong Kong and India ruled Asia and the Pacific Rim tables as oil and coal demand continued to grow across the region. The recession dented demand there as well as elsewhere, but China’s seemingly endless thirst returned in the second half of 2009. PetroChina briefly became the world’s largest firm in May 2009 before ExxonMobil edged it out again in October. The firm led the Asian table as refining margins improved; the Chinese government has embarked on a plan to slowly reduce subsidies on oil products, making them more profitable for oil refiners.

PetroChina was followed by E&P giant CNOOC in second place and Indian R&M Reliance industries in third. New to the ranks of the Asian top energy companies by industry catagory were NTPC, India’s largest power company, Tokyo Gas Co., and AGL Energy, an Australian distributed utility. Asia dominated the coal and consumable fuels (C&CF) market with three of the top eight firms coming from China, and one from Indonesia. China Shenhua Energy came in at number one in the industry, with China Coal Energy third and Yanzhou Coal Mining fourth.

Newcomer to the list PT Bumi Resources in Indonesia took sixth place. India is actively trading coal and buying coal mines overseas, but no Indian company has yet made the top ten in the C&CF category. Chinese and Indian demand for coal pushed prices to new heights in 2008, prompting further concern over the countries’ greenhouse gas emissions. In 2009, China and India pledged to substantially reduce emissions, and Shenhua signed an agreement in October to work with Shell to develop clean coal technology.

Asian companies made up more than 20% of the 50 fastest growing companies list, and also took 30% of the top 10 places in the R&M category. Reliance Industries and Indian Oil Corporation were first and second, with TonenGeneral Sekiyu of Japan third.

European utilities bloom

Eight of the top ten electric utilities in Platts 2009 rankings were from Europe. Boosted by the European Commission’s 20-20-20 targets, which mandates that 20% of energy generation comes from renewable sources by 2020, Europe is leading the world in solar, wind and hydro power expansion. Spain, France and Germany are leading the rush to smart grid technology development in EMEA. France’s EDF Energy ranked first in the European leading companies table.

Also ranked number one in terms of assets, EDF has been on a buying spree; it took over UK nuclear provider British Energy in 2008 and Belgian electricity supplier SPE this year. Not to be outdone, Italy’s largest utility, the number two ranked Enel, bought a 25% share in Spain’s Endesa (ranked number 5) earlier this year. Only two US electric utilities made the top ten ranks of the Top 250; Exelon of Illinois, a nuclear and fossil fuel utility, and FPL of Florida, which is investing in large-scale solar plants. In the top 20 for all energy companies, there were only three utilities -- RWE (a multi-utility) and electric utilities EDF and ENEL.

The Europeans were well represented in the top 50, while for the US, only Virginia’s Dominion Resources was ranked, at 50th down 3 places from 2008. Gas utilities climbed the ladder, owing in part to high natural gas prices in first-half 2008. Gas Natural of Spain came in 16 places higher than in 2008 at number 54, with Belgium’s Distrigas a distant 112th (up from 149th in 2008). Consumer complaints have been rife and gas prices have since toppled, which may damage their returns this year even if winter arrives hard and early.

Independent Power Producer AES of Virginia won the top spot among IPPs, coming in at number 72 in the overall rankings, with India’s NTPC second at number 73. A contraction in power demand this year is expected to damage revenues. Among multi-utilities, Germany’s RWE ranked first (Platts rank number 14). France’s GDF Suez, a newcomer to the list after the merger of GDF and Suez in 2008, came in second, and at number 27 in the overall rankings.

2009 newcomers to Platts Top 250 were heavily weighted toward utilities, which comprised 14 of the more than 30 newly-ranked companies. Of the 14, seven were electric utilities and the rest scattered between gas, multi and independent utilities. The industry continues to attract new investment, despite the challenges it faces with “greening up” its generation and carbon cap and trade policies.

Other newcomers fell primarily in the E&P space, with high prices attracting new investment there and in storage & transportation.

Top 20

1. ExxonMobil Corp
2. Chevron Corp
3. Royal Dutch Shell
4. BP
5. Total SA
6. Petrobras Brasileiro
7. Rosneft Oil
8. Gazprom Oao
9. Petrochina Co
10. ENI SpA
11. StatoilHydro
12. LUKOIL
13. TNK-BP
14. RWE AG
15. Occidental Petroleum
16. EnCana Corp
17. BG Group plc
18. Electricite de France
19. Enel SpA
20. Marathon Oil

China holds, mistreats US geologist on secrets charges

By CHARLES HUTZLER (AP) –

BEIJING — Sometime into his long detention by China's feared state security agents, American geologist Xue Feng had something to show U.S. consular officials on their monthly visit. He rolled up his sleeve, revealing the burns where his interrogators pressed lit cigarettes into his arm.

Xue also had something to say: He wanted his previously unpublicized detention made public in hopes that the outcry would win his release.

But Xue did not get his wish. His wife balked, as did the U.S.-based consultancy that employed him until months before he was detained, both saying that going public might hurt rather than help his case. The U.S. Embassy, caught between his desire to go public and his wife's wish for privacy, worked behind-the-scenes for his release.

So two years after disappearing into custody, the University of Chicago-trained Xue (pronounced shway) remains held at an unknown location in Beijing, charged with stealing state secrets over the purchase of a commercial database on the oil industry. His case has been batted inconclusively between prosecutors and the courts, which twice asked for more evidence, according to a summary of the case prepared by Xue's wife and seen by The Associated Press.

On Tuesday, President Barack Obama raised Xue's case at his Beijing summit with Chinese President Hu Jintao, said a White House official on the trip, in the latest and highest-level intervention.

More than an instance of abusive, intransigent Chinese justice, Xue's case raises disturbing questions about the quiet lobbying foreign governments, companies and the families of detainees often use, believing it more effective with an authoritarian Chinese leadership.

"Under difficult and dangerous circumstances, Dr. Xue made it clear that he wanted the American people to learn of his ordeal. I have little doubt that had his wishes been respected, his case would have already been resolved," said John Kamm, a human rights campaigner with a two-decade track record of getting prisoners released and whom the State Department turned to this month for help.

Beijing's State Security Bureau and the Procuratorate, or prosecutor's office, declined comment. A spokesman for the city's No. 1 Intermediate Court, a Mr. Niu, said Xue's trial "is still in mid-process," where, according to the case summary, it has been since July.

Xue's wife, Nan Kang, who was born in China like her husband and who lives with their children outside Houston, Texas, has hired a lawyer. She said she wanted to keep her husband's detention quiet for fear that going public would have repercussions for their parents in China and disturb their two children, especially their young son.

Kang declined to comment further publicly. In the case summary she wrote: "My husband denies the charge against him, and he believes that he was helping China attract inward investment and to improve the Chinese economy."

The U.S. Embassy in Beijing said that it has monitored Xue's case since soon after his arrest, visiting him over 20 times, delivering messages from his family and pressing for his release. It declined to release further details and would only say that Xue asked for his detention to be made public "some time ago."

U.S. governments have for years weighed whether jailed dissidents and American prisoners are better served by public pressure, closed-door diplomacy or a combination of the two. The Obama administration has tried keep any likely disputes over human rights, a perennial irritant in relations, from damaging a broader agenda crowded with the economic crisis, climate change, nuclear proliferation and other global issues.

The AP learned of Xue's case last week. The U.S. Embassy initially requested that publication be withheld, saying it may harm attempts under way to gain his release. But in recent days, the embassy has said it detects no progress on the case. Xue's wife has asked the case not be made public out of concern for her family. Given Xue's wishes to go public and the lack of progress, the AP decided to publish.

"I have been writing letters to members of Congress, the Senate, the Bush administration, the Obama administration, at least two ambassadors in Beijing — Huntsman and Randt — trying hard over time to raise his case and make sure everyone was aware of it," said David Rowley, a geo-sciences professor at the University of Chicago who was Xue's doctorate thesis adviser. "I have tried to be an advocate, but in the wishes of Dr. Xue's wife, I have tried to keep this out of the public eye and tried to deal with this privately."

In pursuing Xue, Chinese agencies ignored their own laws. Authorities did not respond when the U.S. Embassy asked his whereabouts shortly after he disappeared on Nov. 20, 2007, and only three weeks later did consular officials get to see him — far beyond the periods for notification and visits required by China's regulations and its consular agreement with the U.S., said Kamm and legal experts.

Xue's treatment contrasts with that of a similar case, involving a China-born, naturalized Australian executive. The detention in July of Stern Hu, an executive with the global mining giant Rio Tinto who was charged with stealing state secrets — information on iron ore negotiating strategies — brought an angry public reaction from the Australian government. The charges were reduced to bribery and infringing trade secrets, and Australian officials say Hu has not been mistreated.

"Rio Tinto has been cast as a one off: Businesses don't need to worry," said Jerome Cohen, an expert on China's legal system at New York University School of Law who has been consulted about Xue. But "businesses are trying to get information all the time. Obviously they are being watched."

Like Hu, Xue was a highly accomplished professional who returned to China after success abroad. Born near the central city of Xi'an, Xue went to Chicago to get his Ph.D., bringing along his wife. He worked in the geophysical sciences laboratory for most of the 1990s and was seen as driven and meticulous.

"He was a very good student," said Rowley, the thesis adviser. "He worked very hard, was a very dedicated individual and quite careful in his analyses."

Xue earned his degree, studying high-pressure rock formations in northern China's Dabie Mountains. He picked up a green-card residency permit and eventually U.S. citizenship. In March 2001, the prestigious energy consulting firm IHS Energy — now IHS Inc. based in Colorado — hired Xue to be its Northeast Asia manager.

In China, Xue cultivated contacts in a rapidly growing petroleum industry, gathering in-depth, up-to-date information that IHS could provide to clients, mostly foreign energy companies eager to join the boom. At one point, he helped arrange the purchase of a detailed database about the oil industry.

Rowley said the database was developed by another company and was intended for one of China's state-run offshore oil companies. Cohen, the lawyer, said Xue arranged the sale and a contract was signed between the seller who was a person Xue knew and the buyer, IHS.

"On the surface, it looked like a legitimate sale of business information," said Cohen.

Chinese officials have wide powers to classify materials as state secrets, sometimes reclassifying information already in the public domain. Having basic maps still sometimes gets foreigners in trouble. And the government regards its petroleum industry as strategic.

Since Xue's disappearance, he has been held at an undisclosed location and brought to a courthouse for his consular visits. At some point, his jailers beat him, struck him on the head with an ashtray as well as applying the lit cigarettes to his arm. Nearly six months into his detention, the U.S. Embassy received the formal reason given for his arrest. "He is suspected of the crime of gathering intelligence for abroad," read an April 2008 notice from the Foreign Ministry.

IHS denies any connection to Xue's alleged crime, saying that he left the company in January, 10 months before his November disappearance; his wife said it was July. "We have no notification from the Chinese government or any Chinese authorities that IHS is involved," said company spokesman Ed Mattix.

IHS too, Mattix said, was working behind the scenes to free Xue but believes that publicity would hurt the cause.

While efforts on Xue's behalf plodded on, his case was twice heard in a Beijing court in July and a third time this month. No U.S. Embassy officials attended, saying they were told state secrets charges precluded their attendance.

http://www.google.com/hostednews/ap/article/ALeqM5gE6zSxI_SVZeYhKBsZD4BN2K34HAD9C2KH000

Burma to ‘double output’ of gas by 2020

Nov 19, 2009 (DVB)–Burma is to double its output of natural gas in the next 10 years, the country’s sole operator of oil and gas production told a regional trade fair in Bangkok yesterday.

Energy experts believe Burma’s offshore Bay of Bengal gas fields could house Southeast Asia’s largest gas reserves, much of which is now being pumped to neighbouring countries.

The Myanmar Oil and Gas Enterprise (MOGE) yesterday told an annual ASEAN Council on Petroleum (ASCOPE) trade fair that the country would seek to significantly boost output over the coming decade.

The regional ASEAN (Association of Southeast Asian Nations) bloc is comprised of Burma, Brunei, Cambodia, Indonesia, Laos, Malaysia, Philippines, Singapore, Thailand and Vietnam.

As well as MOGE, the little known Best Luck Co. Ltd was in attendance at ASCOPE, along with a host of international outfits, many of whom have operations or dealings with Burma.

The projected increase in gas output will be largely down to the inception of the Shwe gas pipeline project, being overseen by South Korean company, Daewoo International, as well as the Zawtika pipeline run by Thailand’s PTTEP petroleum company.

The Shwe gas pipeline has come under heavy criticism from both environmental and human rights groups.

Critics view it as the appropriation of the country’s resources by the military, who are then siphoning it to Burma’s energy-hungry neighbours.

“The management system is completely wrong,” said Wong Aung, of the anti-pipeline Shwe Gas Campaign. “They are trying to extract and export everything we have”.

The pipelines are also blamed for destroying livelihoods in fragile tribal communities heavily dependent on the natural ecosystems that construction of the pipeline is believed to be jeopardising.

The biggest criticism however is reserved for the apparent misappropriation by Burma’s military government of the vast funds that can be made from gas revenues.

“It will have no benefit for the Burmese people…these revenues will only heighten the regional security threat posed by the Burmese military regime,” said Wong Aung.

Despite the extraction of gas and oil, the living standards of the average Burmese person has shown little sign of improvement.

The ruling junta was in September accused by advocacy group EarthRights International of stashing the revenue from sales of natural energy in Singaporean banks, and using irregularities between official and unofficial exchange rates to hide income.

Despite such criticisms, the government continues to be accused of channeling some 40 percent of its annual budget into the military, which has seen a massive increase in size and sophistication over the past decade.

There has long been debate about foreign investment in military-ruled Burma, with the fossil fuel industry being the most controversial.

Several western companies, including French company TOTAL and America’s Chevron, have continued operations in the country, despite heavy criticism and pressure from activists that even resulted in a court case brought against Chevron in the 1990’s.

The launch of the trade fair yesterday coincided with a report released by anti-corruption group, Transparency International, which ranked Burma 178 out 180 countries in its annual Corruption Perceptions Index.

More on China’s Faux GDP Data

Back in October, I laughed off the latest China GDP data as utterly fabricated. http://www.ritholtz.com/blog/

As it turns out, I was not the only one. China expert Gordon G. Chang (author of The Coming Collapse of China) is more than skeptical — he has the data to question much of China’s growth miracle.

Spoiler alert: Its been wildly exaggerated:

“Beijing, in the 1990s, ordered factories to churn out goods in periods of low demand, and there are indications that officials are resorting to this tactic now. While optimistic analysts point to astounding car sales–up 70.5% in July, 94.7% in August and 83.6% in September–there are reports that central government officials have ordered state enterprises to buy fleets of vehicles and that these businesses are storing them in parking lots across the country. These stories are as yet unconfirmed, but they are consistent with statistics showing that gasoline sales have been flat this year–up only 6.4% in August, for instance, and sliding since then from all indications. So here’s another question: At a time when economic activity is supposedly rising at a quick pace,how can large increases in passenger vehicle sales not be accompanied by corresponding surges in fuel usage? (emhasis added)

The answer is that Beijing’s statisticians have gone back to their old tactic of making up figures to support the Politburo’s predictions. The Chinese economy is probably growing due to state-led investment, but it cannot be doing so at the rates claimed. Wen Jiabao’s stimulus plan is, above all, grossly inefficient. For all the money he is pouring into the economy, the country is getting a small return in economic output. That’s why Premier Wen, despite the high growth numbers he’s been reporting, consistently refuses to end his stimulus program. If his numbers were real, he would be worried about overheating. But he’s apparently not.”

Gee, whoever would have guessed that a Totalitarian government would lie in its official data?

>
Previously:
Who Believes China’s ‘Bernie Madoff’ Data? (October 22nd, 2009)
http://www.ritholtz.com/blog/2009/10/who-believes-chinas-bernie-madoff-data/

Source:
China’s 8.9% Growth? No Way
Gordon G. Chang
Forbes, 10.23.09
http://www.forbes.com/2009/10/22/china-growth-gdp-economy-opinions-columnists-gordon-g-chang.html

Thailand's PTT group suspends merger plans

Group awaits outcome of Map Ta Phut case

A planned merger of four PTT Group petrochemical and refining units has been delayed pending a court settlement on the ongoing Map Ta Phut dispute, a senior executive says.

The merger has been delayed until the court outlines clear environmental enforcement guidelines for 76 suspended industrial projects, worth about 400 billion baht, in Rayong's Map Ta Phut Industrial Estate, said Prajya Phinyawat, chief operating officer of PTT's downstream petroleum business group.

Of the 76 suspended projects, 25 ventures, worth about 130 billion baht in total, belong to PTT and its affiliates.

PTT has been studying the possible merger of PTT Chemical Plc (PTTCH), IRPC Plc, PTT Aromatics and Aromatics and Refining Plc (PTTAR) and Thai Oil Plc (TOP). The plan, which was originally to be finalised in October, was pushed back to the year-end. But Mr Prajya said the merger would now not be concluded until the court sets clear compliance guidelines for the projects.

"How can we decide which formula is most suitable for the merger until we know what is going to happen with their operations [once the verdict is made]?" he said yesterday. "The merger will proceed immediately after we know what we have to do to comply with the court's order."

PTTCH, meanwhile, has been in talks to acquire petrochemical projects in neighbouring countries, said president and CEO Veerasak Kositpaisal.

Negotiations with petrochemical manufacturers in Southeast Asia are expected to conclude next year.

The company has the capacity to raise up to 60 billion baht in funds to finance investments over the next five years, he said.

Asean will integrate into a single production base by eliminating tariffs on petrochemical products traded within the region next year.

Asean market integration will pave the way for better access for PTTCH products to markets such as Indonesia, the Philippines, Malaysia and Vietnam.

Mr Veerasak said acquiring existing assets in Asean was appropriate for PTTCH to integrate its operations as key petrochemical products are expected to swell when new capacity, mainly from the Middle East and China, come online starting next year.

At the same time, PTTCH has prepared a contingency plan in case PTT's sixth gas-separation plant - one of the suspended projects in Map Ta Phut - has to be delayed beyond its scheduled operational target of the first quarter next year.

The $780-million gas-separation plant is considered vital to the operation of PTTCH's cracker plant which is targeted to start commissioning in late December, he said.

PTT's chief financial officer Tevin Vongvanich said if, in the worst case, the sixth gas plant cannot proceed, 300 million cubic feet per day of local supply will evaporate, forcing Thailand to import more liquefied petroleum gas.

PTT projects crude oil price to move in a range of $65 to $75 per barrel in the final quarter, with Dubai crude now trading above $70, he said.

The gross refining margin is expected to edge down from $1.70 a barrel in the third quarter while petrochemical prices will also weaken.

"Fortunately, the spread margin has declined less than we anticipated while the demand has improved in line with the global economy," he said.

Consequently, PTT is likely to report better-than-expected profit this year, possibly higher than the 51.7 billion baht posted in 2008, but total revenue will fall below last year's 2 trillion baht.

Shares of PTT closed yesterday on the Stock Exchange of Thailand at 233 baht, down six baht, in trade worth 1.03 billion baht. PTTCH declined 1.25 baht to 70.75, in turnover worth 206.4 million baht.

Coal Towns Remain the Heartbeat of China's Economy

By LISA FRIEDMAN of ClimateWire

The fourth part of an occasional series about China.

DATONG, China -- The black metal gates clang shut, and about a dozen miners lean against the grate in blue overalls and headlamps fastened atop yellow hard hats.

The ride down feels endless, dropping nearly a thousand feet into the bowels of the Jing Hua Gong mine. Once at the bottom, the elevator door opens and the men stoop and squeeze into a small locomotive. Like a bleak Disney ride, the train chugs through the darkness, passing decades of standing coal seams, taking the miners almost 2 miles into the center of the mountain.

Amid the glowing reports of new wind farms and investment in solar photovoltaics throughout China, it's easy to forget that cities like Datong are still the heart of this country. Located about 150 miles west of Beijing in Shanxi province, this city is the coal capital of China. The Jing Hua Gong mine on the city's outskirts produces about 4.5 million tons of coal each year -- in a country that produces more than 2.4 billion tons each year, according to the World Coal Institute.

Manufacturing, especially of energy-intensive goods like cement and steel, is the driver of China's explosive economic growth. Even in the midst of a global recession, the country's industrial production has continued steadily.

Nothing is small about this country's long sojourn with coal. It accounts for more than 70 percent of China's energy consumption, and the country continues to develop it at a rapid pace. According to the U.S. Department of Energy's Energy Information Administration, coal energy produced in China will double over the next 20 years or so. Clean alternatives like wind, hydro, solar and nuclear are growing fast, but they will amount to less than a third of the country's total installed capacity by 2020.

The men wear no safety equipment, not an unusual sight in a country that experiences more than 1,000 mine deaths each year. Now that China has smashed its "iron rice bowl" system of guaranteed lifetime employment, miners say that many even pay hefty bribes for the privilege of toiling six-hour rotating shifts deep below the Earth's surface.

We shut down, and 'the lights go out in Beijing'

They claim pride in helping to keep the nation's economic engine purring. "If the coal mine shuts down, the lights go out in Beijing," says Gao Ailing, who said he has been working at the mine outside Datong 20 years. Standing by the exit as men with streaked black faces trickle out, Gao says he's familiar with the global climate change policy debate. He sees U.S. insistence that China cut back emissions as inherently unfair. "America wants other people to do more, but it hasn't done anything itself," Gao says.

China definitely wants to do more. Experts say about half of all the new housing being built worldwide is in China now, with U.S. State Department envoy Todd Stern noting that the country builds the equivalent of "two Bostons' worth of housing" each month. That in itself, analysts say, is largely responsible for the doubling of cement production there in recent years.

Add to the mix a rapidly rising middle class yearning for dishwashers, microwaves, bigger TVs and cars, and analysts say China isn't leaving coal anytime soon.

"China is going to be a low-cost manufacturing hub for decades," said Deborah Seligsohn, a consultant in Beijing for the World Resources Institute think tank. Shanxi province and other areas where coal is king -- and will be for the foreseeable future -- are "the other side of the energy story in China," acknowledged Julian Wong, who writes a blog called the "Green Leap Forward."

"Wind energy is developing fast, but coal-fired power is developing even faster," said Ailun Yang, Greenpeace China's climate director.

Still, changes are coming -- even to cities like Datong.

Once the filthiest city, Datong cleans up

Five years ago, Datong made it to the top of China's State Environmental Protection Administration's list of filthiest cities. Though the city was ordered to clean up its act, its air only worsened. Toward the end of 2005, its pollution index hit 350: red-alert territory.

But on a recent day in August, the sky was clear, offering little hint of the unbreathable air of which Beijing residents had warned.

Residents and analysts say change has come about not out of concern about climate change, but because of international public opinion. The government went on a rampage before the 2008 Olympics, forcing hundreds of coal plants, as well as steel, cement and petrochemical plants and others, to shut down in order to contain pollution. The mines, too, went largely quiet in a countrywide effort to avert embarrassing accidents. Yet to the surprise of many here, when the games left China, industry did not return with a vengeance.

"These few years, it's become much better," said Zhang Zhao, a taxi driver who said he used to work as a driver for one of the mines.

Meanwhile, Datong also is trying something new. Already the gateway to 500-year-old Buddhist grottoes and a breathtaking monastery hanging on the wall of a nearby gorge, the city is busily renovating its old city, hoping to boost tourism in the region.

Seligsohn said the complete story of the slow transformation of Datong, while not based in concern for fossil fuel pollution, still underscores an important transformation that could fundamentally alter China's emissions trajectory. State enterprise reform and the dash to shutter antiquated plants in the run-up to the Olympics are only part of the story, she said.

The other part is recent national policies, like the government's target to reduce energy intensity 20 percent by 2010 and a separate program that directs the country's 1,000 dirtiest industries to markedly improve efficiency.

Shutdowns continued past the Olympics

"The national policies are important, because it's keeping these things shut down," Seligsohn said. "If it was just for the Olympics, things would have reopened the next day."

Whether Datong represents a sign that China is interested in rebalancing its economy and shifting away from dirty manufacturing in favor of service industries like tourism remains open for debate. Wong, whose blog for the liberal Center for American Progress focuses on China's clean energy development, said it's a conversation Chinese leaders are just starting to have.

"That's certainly discussed and talked about. It's one of the strategies of moving toward a low-carbon society," he said. "It's not going to happen overnight, and it's going to take a while for the transition to happen. But they're definitely thinking about it."

In the meantime, energy analysts and political leaders in both countries are paying attention to what can be done in the short term.

Energy efficiency is one answer. All of China's heavy industries have strict targets to meet by next year in order for the country to reach its overall intensity target.

Qi Ye, the deputy director of the China Sustainable Energy Program in Beijing, said recently that that's not enough. A greenhouse gas intensity target, he argued, "will help promote renewable energy and reduce the use of coal."

China already has put $440 billion of economic stimulus money this year into greening up its energy supplies. And under an announcement yesterday between U.S. President Obama and Chinese President Hu Jintao in Beijing, the two countries will start major cooperative efforts on energy efficiency, hybrid vehicles and at least four specific carbon capture and sequestration projects in China.

Meanwhile, not everyone in Datong is eager for change. Standing outside his mud home with a group of neighbors, a man who identified himself only as Liang said he's hoping some of the closed mines reopen. Originally from China's Inner Mongolia region, Liang came to Datong about 10 years ago to work in one of the area's smaller mines and works only sporadically. He's eager, he said, to move into one of the hundreds of new apartment buildings springing up in and around the city.

He's not impressed by the seemingly cleaner air, either, telling a visitor, "You came at a good time. If you came during dry season, that would be another story." As for the need to prevent catastrophic climate change, Liang said, "That's what the scientists say, but we're ordinary people. We don't care about those things. We want to work."

Copyright 2009 E&E Publishing. All Rights Reserved.

For more news on energy and the environment, visit www.climatewire.net.

Burma aims to double output

By Tan Hwee Hwee

Burma aims to more than double its gas production within the next ten years, after the start up of Daewoo International’s Shwe project and PTTEP’s Zawitka project in May 2013.

The country’s state-owned Myanma Oil and Gas Enterprise (MOGE) projects its domestic gas output will exceed 2 billion cubic feet per day by 2015, up from the current 1.2 bcfd.

Around 800 MMcfd will come from the two projects, with Shwe contributing 500 MMcfd and Zawitka another 300 MMcfd.

MOGE expects 100 MMcfd from Shwe and 60 MMcfd from Zawitka to go to domestic users.

Domestic gas consumption is set to increase to 500 MMcfd, up from the current 200 MMcfd, the state-owned enterprise said in a presentation today at Ascope 2009.

Azeris May Send Gas to Asia as EU’s Caspian Pipe Plans Languish

By Stephen Bierman and Anna Shiryaevskaya

Nov. 19 (Bloomberg) -- Azerbaijan, Europe’s closest energy ally in the Caspian basin, is threatening to sell its gas to Asian markets, pressuring the European Union to complete pipeline accords to boost its own deliveries from the region.

“If Europe takes too long putting together a solution, then all the gas in the Caspian will go to Asia,” said Elshad Nassirov, a vice president at State Oil Co. of Azerbaijan, or Socar. “It’s more serious than it seems.”

At stake may be Europe’s ability to tap Caspian resources directly and reduce dependence on Russia. The EU is relying on Azerbaijan to provide the initial gas to fill planned pipelines from the Shah Deniz field, operated by BP Plc and marketed by Statoil ASA, and to provide a route to Turkmenistan, holder of the world’s biggest gas reserves after Russia, Iran and Qatar.

China is set to open a gas link next month to Turkmenistan, across the Caspian from Azerbaijan, giving it a four-year lead over Europe. The EU’s planned pipelines to the region, including the OMV AG-led Nabucco, have yet to reach the investment stage. Nabucco is due to start operating in 2014.

“It has much more of an impact to say that Caspian gas will go to China instead of saying: ‘We will send it to you, but through Russia instead’,” Julian Lee, a senior energy analyst at the Center for Global Energy Studies, said in London. Azerbaijan’s threat “ups the ante.”

European sales remain a priority for Socar, Nassirov said in an interview with Bloomberg during a conference in Baku in September.

Russian Dominance

OAO Gazprom, Russia’s gas-export monopoly, has offered to buy all of Azerbaijan’s gas, potentially scuttling independent routes from former Soviet republics. The Moscow-based company, which supplies a quarter of Europe’s gas, plans to build the South Stream pipeline to the EU.

Azerbaijan’s inability to agree transit and supply with Turkey, its biggest gas market and most direct route to Europe, has hindered progress on Nabucco and other links. Nassirov’s message to the EU is that the so-called southern corridor to the Caspian region may be lost if Turkey doesn’t act like a “responsible transit nation,” Lee said.

“We are confident it is possible to fill the pipeline,” Christian Dolezal, a Nabucco spokesman, said in Paris Oct. 21. “There is of course a lot of interest in gas also from other sides, but this doesn’t change anything.”

Shah Deniz

Nabucco’s partners plan to buy 8 billion cubic meters of gas a year from Shah Deniz and 8 billion from northern Iraq by 2015, more than half the pipe’s planned 31 billion-cubic-meter capacity. The link may also get 10 billion cubic meters from Turkmenistan, Stefan Judisch, chief executive officer of supply and trading at project partner RWE AG, said in July.

Azerbaijan has been Europe’s closest Caspian energy partner since 1994 when it signed the so-called Contract of the Century, an accord with foreign companies, including BP and Statoil, to develop the Azeri-Chirag-Gunashli oil fields.

As one option, Azerbaijan is considering building a plant and shipping 1 billion cubic meters a year of compressed natural gas by tanker through the Black Sea to Bulgaria, Vagif Aliyev, general manager of Socar’s investment division, said yesterday.

Europe’s only access to Turkmen gas is through Russia. Border disputes around the Caspian have delayed plans to build a pipeline across the sea, while Russia is opposed on ecological grounds. Iran remains unviable amid tensions over its nuclear program.

China’s Offer

Separated by 150 kilometers (95 miles) of water, Azerbaijan has no gas pipelines to Central Asia.

The pipeline from Turkmenistan to China makes supplies from Azerbaijan eastward technically more possible, Lee said.

“China has been able to offer something that actually has been superior to whatever else is available right now to the host governments in Central Asia and the Caspian,” Alisher Ali Djumanov, CEO of Beijing-based Eurasia Capital Management, said.

China, the world’s second-biggest energy user, will end Gazprom’s near-monopoly as a buyer of Central Asian gas when the pipeline opens from Turkmen gas fields in December.

Running 1,800 kilometers through Uzbekistan and Kazakhstan to Xinjiang province in China’s west, the link will reach a network extending to the east coast. The pipe, the world’s longest, will stretch more than 10,000 kilometers and cost $30 billion, China National Petroleum Corp. said last year.

‘Very Persistent’

“The Chinese are very persistent,” said Najia Badykova, founder of Washington-based Antares Strategy. China has offered Turkmenistan $4 billion in loans in return for access to energy, while pledging $25 billion to Russian companies and as much as $13 billion to neighboring Kazakhstan.

Turkmenistan may ship as much as 40 billion cubic meters a year via the new link to China, Redjep Shiriev, deputy chairman of state-run gas company Turkmengaz, said in Ashgabat.

The country produced 66.1 billion cubic meters of gas last year and tripled reserves to 7.94 trillion cubic meters, according to BP. Azerbaijan pumped 14.7 billion cubic meters and held reserves of 1.2 trillion cubic meters.

China increased gas consumption by 16 percent to 80.7 billion cubic meters last year, according to BP, while the global recession has curbed demand elsewhere. The month-ahead gas price in the U.K., Europe’s largest user, has dropped 49 percent this year, while U.S. benchmark futures have fallen 24 percent.

Azerbaijan is unlikely to choose Asia over Europe, which would damage its hopes of becoming a Western gateway to the region, Ed Chow, a senior fellow at the Center for Strategic & International Studies and a former Chevron Corp.executive, said by e-mail. Socar can’t offer sufficient supplies for both markets, he said.

“Azerbaijan will forgo its geographic advantage to Turkmenistan?” Chow said. “Empty threat.”

The Shah Deniz-II project partners are committed to European markets, said Kristian Hausken, head of Statoil’s local division. Statoil and China haven’t held supply talks, he said.

It’s better to sell gas at Asian prices than be unable to send it to Europe at western prices, Nassirov said. “It’s impossible to get gas there.”

Qatar to Build $9.8 Billion Chemical Plants in China, Vietnam

By Megumi Yamanaka and Yuji Okada

Nov. 19 (Bloomberg) -- Qatar Petroleum International, a unit of the emirate’s state-run oil company, plans to build two petrochemical plants costing about $9.8 billion in Asia by 2015 to tap demand in the world’s fastest-growing region.

Qatar will partner Cnooc Ltd. and a Chinese petrochemicals maker to construct a $5.8 billion plant in China’s Hainan province, Chief Executive Officer Nasser al-Jaidah said in an interview in Tokyo yesterday. Another project in Vietnam will cost as much as $4 billion and both ventures will use Qatari liquefied petroleum gas to produce chemicals, he said.

“There is huge potential for growth in Asia, especially China,” al-Jaidah said. “We can hit two birds with one stone - - tap the markets and exit our product,” he said, without disclosing Qatar’s share of the investment in the venture.

The Middle Eastern country in investing in Asia as it seeks new markets for its LPG output that may double to 12 million metric tons by 2010. Qatar Petroleum International last week agreed to buy stakes in Royal Dutch Shell Plc’s two petrochemical ventures in Singapore. China National Offshore Oil Corp. agreed this month to purchase an additional 3 million tons of Qatari liquefied natural gas a year.

Asian “energy demand is probably going to grow fast, as much as Europe or the U.S.,” said Tony Regan, a consultant with Singapore-based Tri-Zen International Ltd. “They probably feel they have to have access to this rapidly growing market.”

The Hainan plant will have a processing capacity of about 3.8 million tons of LPG a year and may be approved by the National Development and Reform Commission, China’s top economic planner, in the second half of next year, al-Jaidah said.

Cnooc spokesman Xiao Zongwei said he isn’t aware of any petrochemical investment in Hainan by the Beijing-based company.

Vietnamese Project

The Hainan project will be capable of producing chemicals such as polypropylene, used in tires, shoes and plastic products, al-Jaidah said.

To build the plant in Vietnam, Qatar has begun preliminary talks with Vietnam Oil & Gas Group, known as PetroVietnam, Itochu Corp. and companies in Thailand that al-Jaidah didn’t name.

An Itochu spokeswoman, who declined to be named because of company policy, said the Tokyo-based trading house may join the project.

Qatar Petroleum International will bid next month to construct a gas-fired power plant in Oman, together with Qatar Electricity & Water Co., Chubu Electric Power Co. and Marubeni Corp., al-Jaidah said.

Marubeni spokesman Yo Nomura said the company is considering participating in the power project. He declined to comment whether Marubeni will bid with Qatar. Chubu Electric’s spokesman Toshimitsu Shibata declined to comment on the joint bid for the power plant.

Vietnam to Fund Energy Projects With First Bond Sale in 4 Years

By Beth Thomas and Nguyen Dieu Tu Uyen

Nov. 19 (Bloomberg) -- Vietnam plans to fund energy projects with a $1 billion bond, its first since an inaugural sale in 2005, Deputy Prime Minister Nguyen Sinh Hung said.

The government is pushing ahead with the offering after a delay of two years amid signs of improving markets. “We are aiming at $1 billion for the sale, however, it will be decided based on specific projects,” Hung, 63, said in an interview yesterday in Hanoi.

The government, as part of a two-decade-old reform process known as ‘doi moi,’ or renovation, is raising funds to build roads and power plants as Vietnam’s population is set to expand 40 percent to 120 million by 2050. Annual economic growth may quicken to as much as 8 percent from 2011, Hung said.

“It’s a good time for an issuer like Vietnam to come to the market,” said Pierre Naim, owner of Nassau, Bahamas-based Rainbow Advisory Services, a hedge fund that oversees about $80 million, mostly in emerging-market bonds. “Vietnam is not necessarily seen as one of Asia’s top-quality issuers, but people are looking for yield.”

Vietnam in October 2005 raised $750 million by selling 10- year bonds, then lent the proceeds to Vietnam Shipbuilding Industry Corp., known as Vinashin.

Emerging-market companies and governments have sold $555 billion of bonds this year, 70 percent more than last year and greater than the previous record of $367 billion in 2007, according to Bloomberg data.

12-Month Decline

The average yield on emerging-market government debt has dropped about 270 basis points to 6.514 percent this year, heading for the biggest 12-month decline since JPMorgan Chase & Co. started tracking the data in 1998. A basis point is 0.01 percentage point.

Qatar received $28 billion of orders for a $7 billion bond sale on Nov. 17, the largest offering from an emerging-market government on record, Barclays Capital said.

Hung declined to say if funds from the latest sale would be loaned to Electricity of Vietnam, the national power utility, or Vietnam Oil & Gas Group, known as PetroVietnam. Electricity of Vietnam said in June it bought power from China to meet demand.

Dollar Shortage

The funds raised from Vietnam’s second bond may help ease a shortage of dollars in the country, Hung said.

“This bond sale will help our local currency to some extent, since the proceeds will be in the U.S. dollar and part of it will be converted into dong to spend domestically, so it will increase supply of foreign exchange,” Hung said.

Vietnam’s foreign-exchange reserves fell to about $16.5 billion as of August, from $23 billion at the end of 2008, because of moves by Vietnam’s central bank to try to stabilize the currency, the World Bank said in a semi-annual report this month.

The dong has weakened 2.2 percent this year, and yesterday reached a record low of 17,875 against the dollar.

The bond sale will also “develop a new channel to raise funds for companies as the government will set an example for businesses to go abroad for corporate bond issuance,” said Hung, who has been deputy premier since June 2006.

PetroVietnam said in June it may sell at least $1 billion of bonds abroad next year. Vinashin is also planning an overseas bond sale of as much as $400 million to build ships and ports.

More Debt Sales?

Hung oversaw Vietnam’s first overseas bond sale as finance minister under Prime Minister Phan Van Khai’s administration, when Vietnam opened a stock market and increased privatizations of state-owned companies.

The 6.875 percent securities traded at 3.26 percentage points more than equivalent-maturity Treasuries as of Nov. 17, according to data compiled by Bloomberg. The bonds were issued at 2.56 percentage points more than U.S. government debt.

Vietnam is rated Ba3 by Moody’s Investors Service, three levels below investment grade.

Vietnam aims to sell $1 billion of securities by early 2010, Nguyen Thanh Do, head of the external financing and debt administration department at the Ministry of Finance, said on Nov. 3. Prime Minister Nguyen Tan Dung asked the Ministry of Finance to choose an “appropriate timing” for the sale.

“Their window of opportunity is quite narrow, I would say within the next six months,” Rainbow Advisory’s Naim said. “We’re going to see higher inflation and interest rates, so if the Vietnamese government wants to borrow cheaply, now is the time to do it.”

Pressure on Interest Rates

Pressure is mounting on State Bank of Vietnam Governor Nguyen Van Giau to raise thebenchmark interest rate, which he’s held at 7 percent since February. Consumer prices increased 2.99 percent in October from a year earlier, up from 2.42 percent in September and 1.97 percent in August.

The government raised rates as high as 14 percent in June 2008, the most in Asia at the time, to curb inflation, which accelerated to as much as 28.3 percent in August that year.

“It took us about a year to deal with the economic slowdown and inflation and we will still see economic growth of more than 5 percent for this year,” Hung said. “Between 2011 and 2020, the economy will resume its pace of expansion, at 7 to 8 percent a year as it was before the global crisis.”

The government is targeting growth of at least 5 percent this year, and 6.2 percent to 6.5 percent next year. The $91 billion economy expanded 6.2 percent last year, after growing at a 10-year high of 8.5 percent in 2007, the year Vietnam joined the World Trade Organization.

Korea's SK Energy finds oil deposit in Vietnam

SK Energy Co., Korea’s leading refiner, has discovered an oil deposit at a jointly owned offshore field in Vietnam, the Seoul government said yesterday.

The company discovered the crude deposit in the 15-1/05 block, in which it holds a 25 percent stake, the Ministry of Knowledge Economy said. The company has been drilling since August and “found good quality oil and pumped out 4,300 barrels per day during a trial run,” the ministry said in a release.

The block, located southeast of Ho Chi Minh City, is jointly owned by Vietnam’s state-run PetroVietnam Exploration Production Corp. and France’s oil giant Total. PVEP holds a 40 percent stake in the field with Total’s share standing at 35 percent.

The discovery marks the second time that the Korean energy company has found oil in the Southeast Asian country, following the nearby 15-1 block in cooperation with Korea National Oil Corp. Yonhap

Thai PTT plans coal mine investment in Indonesia

* To conclude Indonesian coal mine buy in 6 months

* Sees coal output jumping to 20 mln tonnes in five years (Adds details)

BANGKOK, Nov 18 (Reuters) - PTT PTT.BK, Thailand's biggest energy firm, said on Wednesday it would conclude a plan to invest in coal mines in Indonesia over the next six months.

"We are in talks on the coal mine investment. It will be a joint investment to help our expansion," Chitrapongse Kwangsukstith, chairman of PTT International, told reporters.

PTT International, PTT's wholly owned overseas investment arm, would invest with partners in a mine in Kalimantan, he said.

PTT has said it was looking to buy more coal assets in Indonesia and Australia.

The latest deal was in April when PTT spent $335 million to buy part of Australian miner Straits Resources' SRL.AK coal and salt assets. The deal marked PTT group's first foray into the coal business and its second investment in Australia.

Chitrapongse said he expected PTT to raise its coal output to 9 million tonnes this year from 7-8 million tonnes last year, then to 11-12 million tonnes in 2010 and at least 20 million tonnes in five years.

Under a five-year plan, PTT wanted to increase overseas revenue to 20 percent of group revenue from around 10 percent now, PTT finance executive Tevin Vongvanick said.

PTT, Thailand's biggest listed company with a market value of $20 billion, runs Thailand's gas pipeline monopoly and controls more than 30 petroleum, gas exploration, petrochemical and refinery businesses.

At the midday break, PTT shares were up 0.4 percent at 240 baht while the main Thai stock index .SETI was down 0.4 percent. ($1=33.17 Baht) (Reporting by Pisit Changplayngam and Arada Kultawanich; Writing by Viparat Jantraprap; Editing by Alan Raybould)

UN body defers action on Myanmar's territorial waters claims

Wednesday, November 18, 2009, 11:54 IST

Dhaka: A UN panel has suspended Myanmar's territorial waters claim in the Bay of Bengal in a row with Bangladesh, which says the area lies within its maritime boundary.

"The UN Commission on the Limits of the Continental Shelf (CLCS) decided to suspend Yangon's claim after a hearing on the submission by Myanmar authorities and the protest notes of Bangladesh," a foreign office statement said Tuesday night.

"The commission decided to defer further consideration of the submission and the notes verbal until such time as the submission is next in line for consideration," it said.


Officials said Myanmar submitted its outer-continental-shelf claim on December 16, 2008 to the CLCS and the presentation on the submission was held on August 24 this year before the UN body.

They said despite a provision for constituting a sub-commission to further hear the claim, the CLCS decided not to form it at this stage considering the Bangladesh's protest note, which was also communicated to the UN chief.

"Consequently, further action on Myanmar's claim on the outer-limits of the continental shelf remains suspended," the statement said.

The development came days after Foreign Secretary Mijarul Quayes said that Bangladesh recently lodged objections against Indian and Myanmar's claim over Continental Shelf.


The statement said the commission took the decision to take into consideration any further developments that might occur during the intervening period, including provisional arrangements of a practical nature provided in the rules.

Experts and officials earlier said the outer line of the continental shelf which was claimed by Yangon was formed with the sedimentary rocks from Bangladesh, which only could prove the "natural prolongation" of the continental shelf.

Bangladesh is in a dispute over the inner lines of the maritime boundary that prompted it to seek last month the UN international arbitration in line with the provisions of United Nations Convention on the Law of the Sea (UNCLOS).

Foreign Minister Dipu Moni said the decision was taken as the ongoing discussions with India and Myanmar could not yield the expected results in the past three decades.

Bangladesh opted for UN arbitration as India and Myanmar started developing their offshore resources while officials said New Delhi and Yangon formally protested the Dhaka's decision to award offshore block-5, 10 and 11 to the International Oil Companies for carrying out hydrocarbon exploration.

Indian High Commissioner in Dhaka Pinak Ranjan Chakravarty last month said New Delhi expected that Bangladesh's decision to seek UN arbitration could settle the tripartite maritime dispute while Myanmar's ambassador here said Dhaka's move "disappointed" Yangon.

China's Burma Oil Bonanza

Written by Nava Thakuria

WEDNESDAY, 18 NOVEMBER 2009

Ignoring protests, Beijing seeks energy from a pariah state. What will Obama do? As expected, China has utterly ignored protests from Burmese protest groups to begin construction of a 980-km dual oil and gas pipeline that will cross the entire Burmese countryside from the offshore Shwe gas fields of Arakan state to China's southern Yunnan Province. A protest group, Arakan Youth, has protested that as long ago as 2006, 500 people from villages on the India-Burma border had already been relocated and forced into uncompensated labor to clear the way for the US$2.5 billion pipeline, which is expected to go online in three years. That constitutes a dilemma for US President Barack Obama as he seeks to engage with the long-isolated country, one of the world's poorest and most brutal. It remains a question whether the United States, having applied the stick to Burma for more than two decades, will now get anything out of applying the carrot, as he famously attempted to do at meetings of the Asia-Pacific Economic Cooperation meetings in Singapore last week. The countries contiguous to Burma appear nearly oblivious. In a lesson to Obama of just how little effect the sanctions have had on Burma, the Shwe field itself is being developed by companies from some of America's staunchest allies including South Korea's Daewoo International, Korea Gas and India's state-owned enterprises ONGC Videsh and GAIL. Daewoo is expected to take up a 25 percent stake in the pipeline, which will transport crude from tankers calling from Africa and the Middle East rather than making the time-consuming trip down through the pirate-invested Strait of Malacca and back up to China. Nor are India and South Korea alone. According to a brochure put out by Total, the French energy company which is part of a consortium whose other partners are Unocal, a unit of the US-based Chevron, Thailand's PTTEP and Burma's own Myanmar Oil & Gas Enterprise are producing gas from the rich offshore Yadana field and exporting 85 percent of the gas to Thailand, where it supplies 20 percent of that country's power generation facilities, with output averaging 20 million cubic meters of gas per day in 2008. The remaining 15 percent is sold locally. But even though most of the cities in Burma are dependent on private generators for electricity, instead of using the natural gas for Burmese citizens, the military junta is selling the gas to its neighboring developing countries in exchange for foreign currency. China in particular has steadily increased its trade ties with Burma, one of the world's most reviled countries because of its human rights policies, and recently signed an agreement to become sole buying authority of the Shwe gas reserve. Under this agreement, Beijing took the responsibility to construct the US$2.5 billion trans-Burma (oil and gas) corridor to feed its voracious need for energy. The State-owned China National Petroleum Corporation holds 50.9 percent of the pipeline, with the capacity to pump nearly 12 million tons of oil and 12 billion cubic meters of gas annually, in partnership with the Myanmar Oil and Gas Enterprise. The Burmese government expects to receive $29 billion over 30 years from the deal. "The military rulers of Burma, which is otherwise facing heavy economic sanctions by the United States and many European countries, keep themselves alive with royalties earned from selling the natural resources to other countries. But all this money is hardly used for any public welfare activities," said M. Kim, an exile Burmese living in India. Speaking to Asia Sentinel from New Delhi, Kim, who is associated with the Burma Centre Delhi, pointed out that the State Peace and Development Council, the junta that runs the country, has mastered the art of ignoring the concerns of the international community for its rights record. Once the rice bowl of Asia, Burma is today one of the poorest countries on the globe, but the military junta of Naypyidaw spends more than 40 percent of its national budget on defense. Only 2 percent goes to health and education of the 50 million Burmese. Beijing has brushed aside demands by more than 120 organizations based in 20 countries to halt the construction of the pipeline project. Led by the Shwe Gas Movement, a Thailand based oil-gas watchdog and rights group, the movement endorsed a memorandum to the Chinese government on the Global Day of Action on October 28. In the letter, addressed to the President of the People's Republic of China and sent through the Chinese embassies in various countries including, among others, Burma's Association of Southeast Asian Nations partners, Japan, South Korea, Australia, Sweden and others, expressing serious concern at the probable threats to the environment and the Burmese because of the project. The letter also asked President Hu Jintao to immediately stop construction, which is all but inconceivable. EarthRights International, in a recent survey, identified 69 Chinese companies engaged in extracting natural resources including oil, gas, hydropower development and mining from Burmese sites. Nor did Burma's Asean partners appear to be concerned. The 10-member body refused to go along with a request by Obama for a joint communiqué asking that democracy leader Aung San Suu Ky, who has spent 14 of the last 20 years under house arrest, to be freed. Obama was forced release his own statement asking for Suu Ky's freedom, although the group did to release a joint statement with the US, calling for free elections next year -- which the opposition has already condemned as a sham aimed at providing a thin veneer of democracy for the junta. "We are gravely concerned for the thousands communities living along the planned 980 km pipeline corridor. Based on experiences in Burma, partnerships with the MOGE on infra-structure development projects invariably lead to forced displacement, forced labor and loss of livelihoods," the letter from the 120 organizations said. "The escalation of abuses around a project when Burma army soldiers provide security is well documented by UN agencies and NGOs." "What is more awful that the local communities, who will be affected by the project, are still unaware of it and they are not being consulted. At the same time, neither the military authority nor the CNPC had gone for any environmental and social impact assessments before launching the pipeline project," said Wong Aung, the coordinator of the Shwe Gas Movement. Speaking to Asia Sentinel from Chiang Mai, Thailand, the young activist also revealed that over 10, 000 Burmese soldiers had already been deployed along the pipeline route, a number that is likely to be increased in the days to come and one that is likely to add to the number of incidents of human rights abuses along the pipeline route. "Past experiences have shown that the pipeline construction and maintenance in the country always involve forced labor, forced relocation, land confiscation, and other kinds of abuses by the soldiers engaged in the project area," Wong Aung added. In a recently launched book titled ‘Corridor of Power: China's Trans-Burma Oil and Gas Pipelines', the Shwe Gas Movement strongly requested that the extraction of the Shwe natural gas deposits be postponed until local people in western Burma could participate in the decision-making process about the use of the resources. It added that the concerned neighboring countries and the oil companies must stop trade with the military junta and refrain from further investment until there is a democratically elected government in the country. Burma's western coast, which is rich in oil and gas reserves, has become the battleground for Beijing and New Delhi in recent years," said an editorial in the Shwe Gas Bulletin. "The western companies showed reluctance in investing in Burma, but both China and India continued their mission and battle over the Burmese oil and gas. The editorial added that at a time when China and India were exploiting the resources of Arakan to enhance their energy and economic security, over four million people living in the State were only facing human rights abuses and economic hardship. Debbie Stothard, coordinator to Alternative ASEAN Network on Burma, said in an interview projects in Burma have displaced thousands of poor Burmese and exposed to them to abuse by the military. Speaking to Asia Sentinel from Bangkok, Stothard added that the Shwe pipeline project would have a heavy impact on the people along the route and would end up adversely affecting the entire region. None of that appears to matter to the Chinese, the governments surrounding Burma, or any countries wishing to buy Burma's rich natural resources.

Asean energy leaders attend ASCOPE in Bangkok

Energy leaders from the 10 ASEAN nations, experts and more than 200 global energy firms today gathered in Bangkok at the 9th ASCOPE Conference and Exhibition, the biggest Southeast Asia event for oil, gas and energy.

The 3-day event takes place Muang Thong Thani.

With the theme of "Fueling the Future of ASEAN towards Sustainable Development" the energy leaders are determined to expand the network of energy partners and identify a number of targeted regional initiatives to develop together for the benefit of enhanced energy security within the region.

Energy Minister Wannarat Channukul, who presided over the opening ceremony, said "A comprehensive energy partnership is one of the priorities for ASEAN energy policy. Energy developments that will take place in the region over the next decades represent real opportunities for its member countries and those concerned. Hosting this year's ASCOPE Conference and Exhibition by PTT who is the national energy company, Thailand can play a key role as a bridge between our energy partners in Southeast Asia."

To him, ASCOPE 2009 can be an effective channel for addressing Thailand's shared vision with ASEAN that is to achieve sustainable energy development through improved efficiency, alternative fuels and environmental protection.

"ASCOPE 2009 provides the opportunity for the leaders of ASEAN to translate their policies into actions, extends the knowledge and technology to achieve these goals and creates the international networking platform for new businesses and strengthened regional partnership."

Prasert Bunsumpun, president and CEO of PTT PPlc, who is playing host, noted that the world economic environment today is pushing the idea that businesses should always be in a state of readiness, using the latest innovations and new technologies to maximise their business potential and competitiveness.

"ASCOPE 2009 is set to be a promising platform for sharing of knowledge, generating business opportunities and better networking the petroleum industry across the region. Regional delegates as well as worldwide representatives will have a very good chance to explore ASEAN's energy market potential and meet with a large number of major buyers in oil, gas and energy businesses."

To drive energy sustainability, the agenda includes a full spectrum of topics addressed by energy experts in their respective fields, useful insights into the issues most pertinent to securing the region's energy future, plus the sharing of knowledge, experience and perspectives on trends and challenges that ASEAN and global energy markets are facing. Technical and business update sessions feature opportunities from both the upstream and downstream standpoints.

In addition, a greater focus will be put on inter and intra-regional cooperation, improved production methods, transport fuels development and sustainability.

Apart from the conference, ASCOPE 2009 features more than 200 energy firms from more than 30 countries showcasing their latest innovations on the exhibition space of over 9,500 sqm. These leading exhibitors include PTT, Petroliam Nasional Bhd (PETRONAS), Chevron Thailand Exploration and Production Ltd, Japan Oil, Gas and Metals National Corporation (JOGMEC), Technip Geoproduction (M) Sdn Bhd, Germanischer Lloyd Industrial Services Asia Sdn Bhd, China Petroleum Technology and Development Corporation and Schlumberger for instance. They participate in demonstrating innovative petroleum management strategies that will be highly beneficial to the region's overall energy business environment and R&D.

"The exhibition provides all industry members the opportunity to explore the latest innovations to enhance their business performance and to actively respond to the growing competition and social demands," said Prasert.

Other highlights include an energy quiz contest for university students and the Vessel Management Seminar. The quiz is part of PTT's initiative to create greater awareness of sustainable energy development among the next generation of energy specialists.

The exhibition is also open to the general public, from 10am to 6pm. Admission is free.

Thailand's PTT to acquire Borneo coal mine

PTT International Co, a wholly owned unit of the majority state-owned oil company PTT Plc, is looking to acquire coal assets in Indonesia to diversify its energy business overseas.

The company is in talks to buy 100% of the shares of a coal mine in Kalimantan, Borneo. The negotiations should be finished within six months, said Chitrapongse Kwangsukstith, acting president, CEO and chairman of PTT International.

The move would follow PTT's investment in the Sebuku Jambayan coal mine, where the company bought a production licence from the local operator earlier this year. The group first diversified into the coal business late last year.

Once the negotiations are finalised, the coal mine would start production immediately, said Mr Chitrapongse.

This project is part of PTT's investment plan that aims to lift overseas investment to 50% of the total budget by 2014 from 20-30% at present.

The company's first Indonesian coal mine is projected to generate $500 million from the annual production of nine million tonnes this year. The output is expected to increase to 11-12 million tonnes next year and 20 million tonnes by 2014.

PTT spent $335 million buying an Australia-based miner, Straits Resources Co. The sub-bituminous grade coal is sold to power plants in China, India, Japan and Korea.