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									                                     Peak Oil News
                                 A Compilation of New Developments, Analysis,
                                              and Web Postings

                                                                                              Friday, October 21, 2011
Tom Whipple, Editor


                                          Current Developments
        1. BRENT CRUDE STEADY ABOVE $109 AHEAD OF EUROPE SUMMIT
        By Manash Goswami

        SINGAPORE (Reuters) - Brent crude held steady above $109 on Friday, after recovering in the previous
        session on optimism policymakers will move closer to resolving the euro zone's debt crisis at a meeting
        this weekend and stem any slowdown in oil demand. France and Germany said European leaders would
        examine in detail a global solution to the crisis on Sunday and aim to adopt the plan on Wednesday at the
        latest. Asian shares inched up, while the euro clung to gains and copper rose from its largest one-day
        collapse in four weeks in the previous session. Brent crude fell 26 cents to $109.50 a barrel at 0707 GMT,
        after rising to as much as $110. U.S. oil gained 22 cents to $86.29 a barrel. "If we see some solid
        agreement on the debt crisis, then we may see Brent rising to $114, a technical resistance level," Caren
        Seren Varol, a risk manager at Global Risk Management said. "If there is no agreement, we may see
        prices fall all the way down to the $103-$104 level." Brent is poised to fall 2.6 percent this week, after
        rising for the past two, and inching closer to the 2.8 percent decline of the week ended September 30.
        U.S. oil looks set to slip 1 percent this week, after rising 5.3 percent in the last one.
        2. OIL PRICES ABOVE $86 AHEAD OF EUROPE DEBT TALKS
        By Alex Kennedy
        Associated Press

        SINGAPORE - Oil prices rose slightly toward $87 a barrel Friday in Asia ahead of a summit this weekend
        where European leaders will try to agree on a plan to contain their region's debt crisis. Benchmark crude
        for December delivery was up 39 cents at $86.46 a barrel at late afternoon Singapore time in electronic
        trading on the New York Mercantile Exchange. The contract fell 22 cents to settle at $86.07 in New York
        on Thursday. Brent crude was down 26 cents at $109.50 a barrel on the ICE Futures Exchange in
        London. Europe's leaders plan to meet Sunday and have scheduled another meeting for next week as
        differences emerged this week between Germany and France over how to protect European banks from
        the consequences of a possible default by the Greek government. Crude has traded between $85 and
        $89 most of this week as traders await details of Europe's debt plan. Analysts were also mulling the
        impact of the death of former Libyan leader Moammar Gadhafi on the OPEC nation's oil production and
        exports. Before fighting started in February, Libya produced about 1.6 million barrels a day, but violence
        quickly reduced output to a trickle.
        3. BRENT OIL FALLS AS GERMAN CONFIDENCE DROPS, LIBYA TO
        BOOST CRUDE SUPPLY
        By Rachel Graham
        Bloomberg
        Oct 21, 2011

        Brent crude dropped, heading for its first weekly decline in three, amid concern that demand may fall after
        German business confidence tumbled to a 16-month low. Futures fell as much as 0.5 percent and are
        poised for a 4.5 percent slide this week. The Munich-based Ifo Institute's business climate index dropped
        to 106.4 this month from 107.4 in September, the lowest since June 2010. Brent's premium to WTI
        narrowed amid speculation that Libya will start increasing supplies. The death of the former leader
Muammar Qaddafi will expedite the return to normal output levels, state-run National Oil Corp. said.
"We're getting relief on the supply side and on the demand side," Axel Herlinghaus, senior commodities
analyst at DZ Bank AG, said fromFrankfurt. "Brent crude can't stay at $110." Brent oil for December
settlement fell 36 cents to $109.40 a barrel on the London-based ICE Futures Europe exchange as of
9:23 a.m. local time. The European benchmark contract was $23.37 more than New York crude,
compared with yesterday's close of $23.69 and a record of $27.88 on Oct. 14. Futures for December
delivery dropped 8 cents, or 0.1 percent, to $85.99 a barrel in electronic trading on the New York
Mercantile Exchange. The contract yesterday fell 0.3 percent to the lowest close since Oct. 13.
4. EUROPE ON EDGE AS RESCUE TALKS STALL
By Peter Spiegel in Brussels and Gerrit Wiesmann in Berlin
The Financial Times

European leaders will be forced to holda second summit, perhaps as early as Wednesday, because of
the inability of Germany and France to reach a deal on how to increase the firepower of the eurozone's
€440bn rescue fund. European leaders confirmed that a high-stakes summit on Sunday aimed at
finalising a plan to shore up the eurozone would proceed. But one senior German official said that no
substantive decisions would be taken on giving additional resources to the fund, called the European
Financial Stability Facility, so it could tackle the growing threat to large eurozone banks and the Italian
bond market. "There will be no agreements," said the senior German official. "This will now happen
Wednesday at the earliest." French officials said the second summit could be held before Wednesday.
Asked why EU leaders were still holding the Sunday meeting, the German official said: "That's a good
question. Sarkozy wants one." Another top European official insisted that important decisions would still
be made at the summit, and diplomats said there was growing consensus that Greek debt holders would
be pushed to accept a 50 per cent loss on their bonds. In addition, there was general acceptance with a
European Banking Authority analysis that banks would need to raise about €80bn in new capital,
diplomats said.
5. DEBT PLAN IS DELAYED IN EUROPE
By Jack Ewing, Stephen Castle And Liz Alderman
The New York Times

FRANKFURT - The grand plan is on pause. Germany and France, still at odds over a more forceful
response to the sovereign debt crisis, postponed a decision-making summit meeting for several days
amid signs that the complexities of European politics may block an all-encompassing resolution. The
meeting planned for this weekend will still be used to examine proposals to strengthen Europe's banks,
increase the clout of the euro bailout fund, and better coordinate euro area economic policy, a
spokesman for Chancellor Angela Merkel of Germany said. But a comprehensive plan will not be decided
until a second summit meeting, set for no later than Wednesday, the spokesman, Steffen Seibert, said in
a statement. The French government issued a nearly identical statement. The last-minute delay
reinforced fears that European leaders were still far from containing a crisis that threatens the world
economy. "The politicians have been trying to solve the crisis, but a consistent effort has been missing,"
Andreas Dombret, a member of the executive board of Bundesbank, the German central bank, told an
audience in Berlin on Thursday. It was an unusually sharp criticism for an official to make about his
political counterparts.
6. IEA SEES MIXED OUTLOOK FOR OIL
PARIS, Oct. 20 (UPI) -- Though there are concerns about the European economy, oil producers shouldn't
scale back production, an International Energy Agency official said from Paris. David Fyfe, the oil industry
and markets division head at the IEA, said world oil markets were tight because of slow production from
the North Sea and Canada and the loss of production from war-torn Libya. The Organization of the
Petroleum Exporting Countries in June left official production quotas in check despite concerns high
energy prices could slow economic growth. The IEA called on its members to release oil from strategic
reserves to offset the loss of production from Libya. Nevertheless, Fyfe was quoted by the Platts news
service as saying "we don't think that this is a market (in which) producers should be looking to scale back
supply." He said the IEA expected oil demand to increase by as much as 1.3 million barrels per day in
2012. A slumping economic scenario for members of the 34-member European Organization for
Economic Cooperation and Development could erase the growth forecast, however. "If we are heading
toward a double dip in the OECD demand growth will be wiped out next year," he said.
7. ENI, IEA DISAGREE OVER IMPACT OF 'ARAB SPRING' ON
INVESTMENT
Oil & Gas Journal

Eni SPA Chairman Paolo Scaroni, addressing a ministerial meeting of the International Energy Agency in
Paris, sharply disagreed with the organization's assessment of the impact of the so-called Arab Spring on
oil and gas investment. In his speech, Scaroni told world energy ministers and industry leaders that while
"the potential impact of the Arab Spring on energy security is difficult to assess, there are at least three
reasons to be optimistic." He said, "The first is that the way the crisis went in Libya is an exception,"
adding that countries such as Egypt and Tunisia "have managed things without losing a single barrel of
production." Scaroni said the second reason concerns Libya, which "after months of battles, has very
quickly returned to the global market and Eni, the most important energy company in the country, has
already resumed production of oil and started to export gas." Not least, said Scaroni, "The oil contracts
are legally binding, even in times of regime change." Scaroni said Iraq represents the third and most
significant reason for optimism. "It has great potential with giant fields that are relatively simple from a
technical point of view."
8. OIL BLITZ 'IRAQ'S MOST DANGEROUS MOMENT'
BAGHDAD, Oct. 20 (UPI) -- Increasingly, Iraq's drive to expand its oil and natural gas industry, the
country's economic lifeline, is becoming dependent on the government's ability to ensure security and,
without U.S. forces, that looks to be a serious problem. Hussein al-Shahristani, the deputy prime minister
for energy affairs, recently observed that a bungled bombing blitz of the Baiji refinery 200 miles north of
Baghdad Feb. 26 was "the most dangerous moment since the fall of the Baathist regime" in 2003. The
refinery, which has a capacity of 310,000 barrels per day and is the largest in Iraq, was crippled for three
weeks, seriously reducing the supply of gasoline. Shahristani, a former oil minister who isn't given to
hyperbole, said only about one-third of the explosives planted by al-Qaida gunmen detonated. If all the
explosives had gone off, Baiji would have been out of action for months, causing major economic
disruption. Brig. Gen. Moussa Abdel-Hassan, commander of the oil police in southern Iraq, where 65
percent of the country's known oil reserves lie, warned recently that authorities are hardly able to ensure
the protection of vital energy infrastructure in the region because of a lack of manpower and advanced
security equipment.
9. LUKOIL, PARTNERS TO AWARD DEALS AT IRAQ WEST-QURNA
OIL FIELD
ISTANBUL -(Dow Jones)- OAO Lukoil Holdings (LKOH.RS) and its partners are poised to award a feast
of contracts to international engineering and construction companies as it moves full speed ahead with
development of its supergiant West-Qurna Phase 2 in southern Iraq, a senior Lukoil executive said. Along
with Norway's Statoil ASA (STO) and Iraq's state South Oil Company, Lukoil is in the final stages of
evaluating commercial and technical bids for contracts competing to build the central processing facility,
or CPF, export pipelines, tank farms, and a 126-megawatt power station. "We have received the bids. We
have been evaluating them and expect to award the contracts very soon," a senior Lukoil executive told
Dow Jones Newswires late Thursday. He expects all packages to have been awarded in the coming
weeks. He did not name the bidders, but another Lukoil official said earlier in the year that five companies
had been shortlisted--South Korea's Samsung Engineering Co. Ltd. (028050.SE), Saipem SpA (SPM.MI),
SNC-Lavalin Group Inc. (SNC.T), Punj Lloyd Ltd. (532693.BY) and Globalstroy-Engineering (GSEN.RS).
Two other bidders--Petrofac and Technimont--were said at the time to have been dropped. The biggest
package will be the construction of the CPF which will enable the consortium to produce 400,000 barrels
of oil a day from West Qurna-2 by 2014 as part of the first-stage development of the field.
10. QADDAFI DEMISE IS 'GOOD NEWS' FOR LIBYAN OIL FUTURE,
STATE COMPANY SAYS
By Robert Tuttle and Ayesha Daya
Bloomberg
Oct 20, 2011

The death of former Libyan leader Muammar Qaddafi in his home town of Sirte will expedite the nation's
efforts to revive crude output to normal levels, the chairman of state-run National Oil Corp. said. "This will
help in getting a lot of fields back into production as soon as possible," Nuri Berruien said today in a
telephone interview from Libya. "Now that Sirte is liberated, people can move quickly. People can go to
the fields that are in the west." Gunfire echoed across Libya's main cities today as crowds poured into
streets to celebrate the capture and death of Qaddafi, who ruled the North African nation for 42 years.
The fall of Sirte, located along the main highway linking the eastern and western regions, will allow oil
workers and engineers back to the fields, Berruien said. Libya, holder of Africa's biggest crude reserves,
seeks to restore production to about 1.7 million barrels a day within 15 months, after output dwindled to
almost nothing amid the rebellion that broke out in February. The collapse in exports contributed to prices
rallying as much as 34 percent in London earlier this year and prompted the International Energy Agency
to announce in June a global release of emergency stockpiles for the third time in the agency's history.
11. HUGO CHÁVEZ SAYS HIS CANCER IS GONE
By Simon Romero
The New York Times

RIO DE JANEIRO - President Hugo Chávez of Venezuela declared on Thursday that he had beaten
cancer, less than five months after he stunned Venezuelans by revealing that he had undergone
emergency surgery to remove a tumor while in seclusion in Cuba. "No abnormal cellular activity exists,"
said Mr. Chávez in comments broadcast on state media while on a visit to western Venezuela, where he
was preparing to visit a Roman Catholic shrine. "I've begun to exit the cave," said the president, dressed
in a green military uniform. Despite Mr. Chávez's announcement, which he made after a brief trip to Cuba
for a checkup, mystery still shrouds his condition. He has never publicly revealed what type of cancer
afflicted him. Altogether, Mr. Chávez, 57, underwent four chemotherapy treatments, including three in
Cuba and one in Venezuela, according to the government. Physically, he still looked like a changed man
on Thursday, appearing bloated and with a green military cap covering a bald head. Spiritually, Mr.
Chávez also seems to have acquired a more religious air. "I'm more Christian every day," he said
Thursday. "Socialism is the road to Christ." Confusion persists in Venezuela about how healthy or sick Mr.
Chávez may be. Salvador Navarrete, a prominent Venezuelan doctor who describes himself as the
president's former personal surgeon, said this week that Mr. Chávez had less than two years to live,
attributing his illness to a "very aggressive" tumor in the pelvic area.
12. US EPA TO ISSUE NATIONAL SHALE WASTEWATER RULES IN
2014
Oil & Gas Journal

The US Environmental Protection Agency will issue pre-treatment standards for flowback water from
shale gas extraction by 2014, the agency announced on Thursday. The move is sure to frighten a gas
production industry that has resisted almost all forms of federal oversight of hydraulic fracturing and
horizontal drilling in favor of regulation by individual states. The EPA's action is separate from its ongoing
study of hydraulic fracturing's effects on drinking water. That study is supposed to conclude in 2014 as
well. The EPA said Thursday it was bringing coal bed methane and shale gas production under its
effluent guidelines program under the Clean Water Act, which sets national standards for industrial
wastewater discharges. The agency has issued regulations for 57 other industries and will now collect
data from states, stakeholders and the industry to devise a standard wastewater must meet before it is
submitted to a treatment facility, EPA said. "Currently, wastewater associated with shale gas extraction is
prohibited from being directly discharged to waterways and other waters of the US," the EPA's Thursday
announcement said.
13. CANADIAN NATURAL GAS EXPORTS DECLINE
OTTAWA, Oct. 20 (UPI) -- Warmer temperatures and the opening of natural gas pipeline in the United
States led to a modest decline in Canadian natural gas exports, data indicate. The Canadian Natural
Energy Board announced natural gas exports declined by slightly more than 7 percent from July to
August to around 8.3 billion cubic feet per day. Market sources were reported by the Platts news service
as saying the decline was in part related to weather conditions and to the opening in July of the Ruby
natural gas pipeline. The Ruby pipeline stretches 678 miles from southwestern Wyoming to markets in
Nevada, California, Oregon and Washington. The pipeline has a designed capacity of 1.5 billion cubic
feet of natural gas per day. Canada is one of the primary exporters of natural resources to the United
States. The U.S. Energy Information Administration ranks Canada 29th in terms of proven natural gas
reserves. The NEB this week backed an export license for the Kitimat liquefied natural gas project slated
for western Canada.
14. STATOIL DOUBLES ESTIMATES FOR GIANT NORTH SEA FIND
DJ

Norway's oil and gas major Statoil (STO) Friday announced its giant North Sea discovery Aldous Major
South is estimated to contain double the volume compared with previous estimates. The partly state-
owned Norwegian company said the find is estimated to contain between 900 million and 1.5 billion
barrels of recoverable oil equivalent. This compares with its previous statement that the find would
contain between 400 million and 800 million. Aldous Major South is linked to the Avaldsnes discovery and
the combined area is one of the largest finds ever on the Norwegian Continental Shelf. Statoil said the
company would wait to provide updated volume estimates for the combined area. Sweden's Lundin
Petroleum (LUPE.SK), which operates the Avaldsnes field has said Avaldsnes contains between 800
million and 1.8 billion barrels. "Aldous/Avaldsnes is a giant, and one of the largest finds ever on the
Norwegian continental shelf. Volume estimates have now increased further because the appraisal well
confirms a continuous, very good and thick reservoir in Aldous Major South," said Tim Dodson, executive
vice president for Exploration in Statoil.




                                 Discussion and Analysis
15. PEAK OIL AND THE GREAT RECESSION
Mother Jones

Jim Hamilton, an economist at UC San Diego who has done extensive work on the economics of oil
spikes, has just published a summary of the current state of oil macroeconomics called"Oil Prices,
Exhaustible Resources, and Economic Growth." His conclusion: "The historical record surely dictates that
we take seriously the possibility that the world could soon reach a point from which a continuous decline
in the annual flow rate of production could not be avoided." Translation: peak oil might not be far away,
and we should take it pretty seriously. And Hamilton's research suggests strongly that when peak oil does
arrive, it's not going to be pretty: Coping with a final peak in world oil production could look pretty similar
to what we observed as the economy adapted to the production plateau encountered over 2005-2009.
That experience appeared to have much in common with previous historical episodes that resulted from
temporary geopolitical conflict, being associated with significant declines in employment and output. If the
future decades look like the last 5 years, we are in for a rough time.
16. IGNORE THE SCEPTICS, THE 'PEAK OIL BRIGADE' IS RIGHT
The Ecologist (blog)

Peak oil sceptics argue the real problem for climate change and our planet may be too much fossil fuel,
not too little. Lionel Badal explains why he disagrees. In a recent article, Dieter Helm, Professor of energy
policy at the University of Oxford, argued that 'the peak oil brigade' was 'leading us into bad policymaking
on energy'. According to him, it is a mistake to assume that 'oil and gas prices are going ever upwards,
that they will be volatile and that a core function of energy policy is to protect British industry and
consumers from the consequences'. Yet, his argumentation contains serious omissions and inaccuracies.
Let me start by saying on which point I agree with Professor Helm. Yes, the planet certainly has enough
fossil fuels 'to fry the planet several times' and mitigating climate change should be a priority. But whether
we like it or not, 'peak oil' remains a real problem. The situation is actually easy to comprehend and I
seriously wonder how Professor Helm fails to understand it. According to Shell, in order to maintain global
oil production at today's level, we would need to add the equivalent of four new Saudi-Arabia, within the
next ten years. A study from the US Energy Information Administration indicates similar conclusions. This
is a tremendous effort, which many in the industry would argue is an impossible one.
17. NO PEAK OIL TO YERGIN WHO SEES YEARS OF RISING
SUPPLIES
Business Week

Toward the end of "The Quest," his sprawling book on energy, Daniel Yergin introduces an obscure 19th-
century character named Sadi Carnot. The son of one of Napoleon's ministers of war, Carnot was
convinced that an important reason for Britain's victory over Napoleon was "its mastery of energy,
specifically the steam engine." In 1824 he published a study on this theme called "Reflections on the
Motive Power of Fire," which Yergin calls "almost certainly the first systematic analysis of how man had
actually harnessed energy." For more than three decades, Yergin has been Carnot's heir, cutting through
fog and emotions to provide lucid analysis of energy issues. He emerged on the public stage in the wake
of the 1973 oil embargo and its gas lines, which sparked a persistent feeling of unease about energy
security in the U.S. He has been a consultant to industry and governments, most recently as chairman of
IHS Cambridge Energy Research Associates. At the same time he has continued to address a wider
audience through his writing.

                                            Alternatives
18. WESTERN SOLARS UP THE ANTE AGAINST CHINESE PEERS
By Christoph Steitz and Leonora Walet

FRANKFURT/HONG KONG (Reuters) - Chinese solar companies could soon find themselves bereft of
some of their biggest foreign markets as Western manufacturers intensify a solar trade war and seek stiff
anti-dumping duties on low-cost Chinese products. German group SolarWorld said on Thursday it was
working on steps to curb alleged price dumping by Chinese rivals in Europe. This comes less than a day
after its U.S. unit led a group of seven U.S. solar companies in urging the U.S. government to slap anti-
dumping duties on Chinese-made solar energy products. They charged that Chinese producers can
aggressively undercut U.S. prices because they receive cash grants and other subsidies in China,
destroying thousands of American jobs. "If the U.S. takes action, it could have a serious impact on
Chinese solar players," said Min Li, head of alternative energy at Yuanta Securities (Hong Kong) in
response to the filed complaint.
19. INDIA SOLAR PROJECTS GET BIDS FROM LOCAL, FOREIGN
FIRMS
By Saurabh Chaturvedi

NEW DELHI -- India has received bids from 154 companies including Spain's Gestamp Solar, Fonroche
Energy of France and local utilities Reliance Power Ltd. and Tata Power Co. for contracts to build solar
power facilities, an executive of the agency in charge of buying electricity from solar projects said. The
South Asian nation had called bids to build and operate 350 megawatt of solar power facilities. These will
be the second round of contracts to be given under a federal program to have 20 gigawatt of solar
capacity by 2022. More than half of India's power generation capacity of 182 GW is coal-based, while
government officials term the current solar capacity as negligible. Building of plants to generate 350 MW
solar power is estimated to require 35 billion rupees ($714 million) in investments. The executive said the
solar power units of Lanco Infratech Ltd., GAIL (India) Ltd., Hindustan Petroleum Corp., Moser Baer
Projects Pvt. Ltd., Infrastructure Leasing & Financial Services Ltd. and Mahindra Solar One Pvt. Ltd. were
also among the companies, which submitted as many as 218 proposals.
20. JAPAN EYES SCOTTISH COAST FOR TIDAL POWER
EDINBURGH, Scotland, Oct. 20 (UPI) -- A Japanese industrial company aims to test a new tidal power
system at an energy center in the north of Scotland, the country's first minister announced. Scotland, at
the European Marine Energy Center in Orkney, aims to host 10 prototype wave and tidal energy systems
by the end of the year. The center had one wave system in 2004 and one tidal machine in 2006. Scottish
First Minister Alex Salmond announced Kawasaki Heavy Industries plans to try new tidal energy
technology at the Orkney center. "Japan is one of the great industrial nations of the world and I am
encouraged that it shares Scotland's vision of building on a strong engineering heritage to harness our
natural resources and generate clean, renewable power that can reduce harmful emissions and tackle
global climate change," he said in a statement. Edinburgh aims to get 100 percent of its electricity
demand from renewable energy by 2020. The country used renewable energy to meet 27 percent of its
demand in 2009. The Scottish government said it was promoting tidal and wave power through a $15.8
million challenge to boost innovation in the sector.
---------------------------------

1. BRENT CRUDE STEADY ABOVE $109 AHEAD OF EUROPE SUMMIT
By Manash Goswami

SINGAPORE (Reuters) - Brent crude held steady above $109 on Friday, after recovering in the previous
session on optimism policymakers will move closer to resolving the euro zone's debt crisis at a meeting
this weekend and stem any slowdown in oil demand.

France and Germany said European leaders would examine in detail a global solution to the crisis on
Sunday and aim to adopt the plan on Wednesday at the latest.

Asian shares inched up, while the euro clung to gains and copper rose from its largest one-day collapse
in four weeks in the previous session.

Brent crude fell 26 cents to $109.50 a barrel at 0707 GMT, after rising to as much as $110. U.S. oil
gained 22 cents to $86.29 a barrel.

"If we see some solid agreement on the debt crisis, then we may see Brent rising to $114, a technical
resistance level," Caren Seren Varol, a risk manager at Global Risk Management said. "If there is no
agreement, we may see prices fall all the way down to the $103-$104 level."

Brent is poised to fall 2.6 percent this week, after rising for the past two, and inching closer to the 2.8
percent decline of the week ended September 30. U.S. oil looks set to slip 1 percent this week, after
rising 5.3 percent in the last one.

The decision to hold another meeting for European leaders to definitively adopt the plan is giving
investors some hope that policymakers will be able push through measures to contain the euro zone's
debt issue, said Ken Hasegawa, a commodities derivatives manager with Newedge Brokerage in Tokyo.

But investors are also worried as deep divisions between France and Germany may mean there will be
scant progress on strengthening the euro zone bailout fund. The major sticking point is over how to scale
up the European Financial Stability Facility (EFSF), a 440 billion euro ($600 billion) fund so far used to
bail out Portugal and Ireland.

France and Germany disagree over the best way to bolster the facility, with Paris fearing its triple-A credit
rating could come under threat if the wrong method is chosen.

"The market will trade in a very narrow range, between $84 and $88 a barrel for U.S. crude till the
outcome of the summit is known," said Hasegawa.
"Nobody is willing to take positions at this point."

Brent will remain neutral in a range of $106.96-$110.30 per barrel, Reuters technical analyst Wang Tao
said.

PRICE OUTLOOK

Oil prices rose in the previous session, bucking a broader sell-off across commodities. The 19-commodity
Reuters-Jefferies CRB index .CRB settled down 1 percent as cotton, cocoa and coffee joined a plunge
led by copper.

Oil gained mostly because prices have been tracking equities and news from the European Union, while
fundamentals are driving copper and other commodities, Varol said.

Expectations of a colder winter in the United States, which helped push U.S. heating oil futures higher,
were also supporting crude prices.

A strengthening La Nina in the world's top oil consumer this winter will cause colder and wetter weather to
the North and drier and warmer conditions in the South, government forecasters said.

U.S. inventories of both crude and products dropped below their five-year averages, Barclays Capital
said.

"The surplus has gone, with inventories having fallen almost 1 million barrels a day over the past month
relative to the normal seasonal pattern and the latest week showing a decline of 1.8 mb/d relative to the
five-year average," Barclays Capital said in a report.

Participants also weighed in news of former Libyan leader Muammar Gaddafi's death, with most saying
the announcement meant very little to the oil market.

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

2. OIL PRICES ABOVE $86 AHEAD OF EUROPE DEBT TALKS
By Alex Kennedy
Associated Press

SINGAPORE - Oil prices rose slightly toward $87 a barrel Friday in Asia ahead of a summit this weekend
where European leaders will try to agree on a plan to contain their region's debt crisis.

Benchmark crude for December delivery was up 39 cents at $86.46 a barrel at late afternoon Singapore
time in electronic trading on the New York Mercantile Exchange. The contract fell 22 cents to settle at
$86.07 in New York on Thursday.

Brent crude was down 26 cents at $109.50 a barrel on the ICE Futures Exchange in London.

Europe's leaders plan to meet Sunday and have scheduled another meeting for next week as differences
emerged this week between Germany and France over how to protect European banks from the
consequences of a possible default by the Greek government.

Crude has traded between $85 and $89 most of this week as traders await details of Europe's debt plan.

Analysts were also mulling the impact of the death of former Libyan leader Moammar Gadhafi on the
OPEC nation's oil production and exports. Before fighting started in February, Libya produced about 1.6
million barrels a day, but violence quickly reduced output to a trickle.

The drop in supply helped push prices to near $115 a barrel in early May.
"Virtually all of the news emerging from Libya over the past six weeks has been positive on the production
side," J.P. Morgan said in a report. "The oil market is discounting a relatively rapid return of at least the
first 700,000 barrels per day of production."

Some analysts expect Libya's damaged infrastructure and infighting among factions to delay a return to
pre-war production levels.

"Serious security challenges persist in Libya that could hinder efforts to restore Libyan production fully,"
Barclays Capital said in a report.

In other Nymex trading, heating oil rose 0.4 cents to $3.03 per gallon and gasoline futures was steady at
$2.66 per gallon. Natural gas slid 2.5 cents to $3.61 per 1,000 cubic feet.

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

3. BRENT OIL FALLS AS GERMAN CONFIDENCE DROPS, LIBYA TO
BOOST CRUDE SUPPLY
By Rachel Graham
Bloomberg
Oct 21, 2011

Brent crude dropped, heading for its first weekly decline in three, amid concern that demand may fall after
German business confidence tumbled to a 16-month low.

Futures fell as much as 0.5 percent and are poised for a 4.5 percent slide this week. The Munich-based
Ifo Institute's business climate index dropped to 106.4 this month from 107.4 in September, the lowest
since June 2010. Brent's premium to WTI narrowed amid speculation that Libya will start increasing
supplies. The death of the former leader Muammar Qaddafi will expedite the return to normal output
levels, state-run National Oil Corp. said.

"We're getting relief on the supply side and on the demand side," Axel Herlinghaus, senior commodities
analyst at DZ Bank AG, said fromFrankfurt. "Brent crude can't stay at $110."

Brent oil for December settlement fell 36 cents to $109.40 a barrel on the London-based ICE Futures
Europe exchange as of 9:23 a.m. local time. The European benchmark contract was $23.37 more than
New York crude, compared with yesterday's close of $23.69 and a record of $27.88 on Oct. 14.

Futures for December delivery dropped 8 cents, or 0.1 percent, to $85.99 a barrel in electronic trading on
the New York Mercantile Exchange. The contract yesterday fell 0.3 percent to the lowest close since Oct.
13.

'Sirte is Liberated'

Qaddafi's death in his home town of Sirte yesterday "will help in getting a lot of fields back into production
as soon as possible," Nuri Berruien, the chairman of National Oil, said in a telephone interview from
Libya. "Now that Sirte is liberated, people can move quickly. People can go to the fields that are in the
west."

Fighting has reduced the availability of light, sweet crude, or oil with low density and sulfur content, from
Libya, a member of the Organization of Petroleum Exporting Countries. The country's output fell to 45,000
barrels a day in August from pre-crisis levels of about 1.6 million, according to data compiled by
Bloomberg. The North African nation pumped 100,000 barrels a day last month.

"Qaddafi's capture won't have any impact on the oil market," said Alexander Ridgers, London-based head
of commodities at CMC Markets, which handles about $160 million a day in crude contracts. "It's not as
though he was still running the country."
---------------------------------

4. EUROPE ON EDGE AS RESCUE TALKS STALL
By Peter Spiegel in Brussels and Gerrit Wiesmann in Berlin
The Financial Times

European leaders will be forced to holda second summit, perhaps as early as Wednesday, because of
the inability of Germany and France to reach a deal on how to increase the firepower of the eurozone's
€440bn rescue fund.

European leaders confirmed that a high-stakes summit on Sunday aimed at finalising a plan to shore up
the eurozone would proceed. But one senior German official said that no substantive decisions would be
taken on giving additional resources to the fund, called the European Financial Stability Facility, so it
could tackle the growing threat to large eurozone banks and the Italian bond market.

"There will be no agreements," said the senior German official. "This will now happen Wednesday at the
earliest." French officials said the second summit could be held before Wednesday.

Asked why EU leaders were still holding the Sunday meeting, the German official said: "That's a good
question. Sarkozy wants one."

Another top European official insisted that important decisions would still be made at the summit, and
diplomats said there was growing consensus that Greek debt holders would be pushed to accept a 50 per
cent loss on their bonds. In addition, there was general acceptance with a European Banking Authority
analysis that banks would need to raise about €80bn in new capital, diplomats said.

Still, in a statement put out by French president Nicolas Sarkozy's office, Paris said Sunday's meeting
was now intended to "discuss in depth" the much-touted plan rather than come to any decisions, which
would be made at the second gathering.

"We've lost the main parachute and we're on the reserve chute and we're not sure that will even work,"
said a senior EU official.

Highlighting the global gravity of the situation, it was revealed that Mr Sarkozy, Angela Merkel of
Germany, the UK's David Cameron and US President Barack Obama on Thursday conducted a video
conference to discuss the economy.

Differences over the EFSF have widened in recent days after some officials warned the leading plan for
overhauling the fund - which would involve it guaranteeing about 20 per cent of losses on Spanish and
Italian bonds - might not be effective.

More video

According to one EU official, the plan began unraveling due to fears it wouldcost France its totemic triple-
A debt rating because it puts all eurozone governments on the line for potentially huge losses. The
EFSF's ability to raise rescue money at low interest rates is directly tied to France's and Germany's triple-
A status, meaning a French downgrade could lead to a collapse of the EU's entire financial rescue
system.

Indeed, bonds issued by the EFSF for Irish and Portuguese bail-outs have seen heavy selling this week
amid fears the fund could be undermined. Borrowing rates for Italian bonds also spiked on Thursday,
closing above 6 per cent for the first time since the European Central Bank began heavily buying them in
early August.

In recent days, France has made a renewed effort to change the EFSF plan, reverting to an earlier
proposal that would give the fund access to the ECB's unlimited resources as a way of increasing its
firepower.
The ECB and Germany have resisted the move, however, and the standoff led to tensions at a hastily-
arranged meeting in Frankfurt of EU leaders Wednesday evening, which included both Mr Sarkozy and
Mrs Merkel.

"Yesterday went very badly," said a European official briefed on the session.

Because of the standoff, Ms Merkel was unable to present the Bundestag with full details of the EFSF
plan. Under new German legislation, Ms Merkel must get a green light from the parliament before
agreeing any major changes to the rescue fund.

"Merkel doesn't have enough time to run it by the Bundestag," said another senior European official.

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

5. DEBT PLAN IS DELAYED IN EUROPE
By Jack Ewing, Stephen Castle And Liz Alderman
The New York Times

FRANKFURT - The grand plan is on pause.

Germany and France, still at odds over a more forceful response to the sovereign debt crisis, postponed
a decision-making summit meeting for several days amid signs that the complexities of European politics
may block an all-encompassing resolution.

The meeting planned for this weekend will still be used to examine proposals to strengthen Europe's
banks, increase the clout of the euro bailout fund, and better coordinate euro area economic policy, a
spokesman for Chancellor Angela Merkel of Germany said.

But a comprehensive plan will not be decided until a second summit meeting, set for no later than
Wednesday, the spokesman, Steffen Seibert, said in a statement. The French government issued a
nearly identical statement.

The last-minute delay reinforced fears that European leaders were still far from containing a crisis that
threatens the world economy.

"The politicians have been trying to solve the crisis, but a consistent effort has been missing," Andreas
Dombret, a member of the executive board of Bundesbank, the German central bank, told an audience in
Berlin on Thursday. It was an unusually sharp criticism for an official to make about his political
counterparts.

Market reaction to the postponement, which was announced after trading in Europe closed, was muted.
The Standard & Poor's 500-stock index ended up nearly half a percent, to 1,215.39. The seesaw day in
United States markets suggested investors were trying to interpret the mixed signals from Europe.

European leaders are committing to take major steps and have set themselves a deadline. But suddenly
calling a second meeting is highly unusual, and a more pessimistic interpretation would be that divisions
among leaders may mean even further delays.

Analysts agree that a comprehensive crisis package would include more debt relief for Greece, a stronger
bailout fund for the overly indebted countries, and some means of removing doubts about the
creditworthiness of Italy and Spain.

It would also include a plan to address the underlying cause of the crisis - the lack of any effective means
of enforcing enforce budgetary discipline among euro members - and a plan to restore growth in countries
like Greece and Portugal that have lost international competitiveness.

After all the face-to-face interaction among political leaders this week, and plans for more to start Friday
evening, the signs of disarray are unsettling. The French president, Nicolas Sarkozy, stoked expectations
for progress when he flew to Frankfurt on Wednesday for a brief meeting with Mrs. Merkel as his wife,
Carla Bruni-Sarkozy, was giving birth to a daughter in Paris.

The talks this weekend will begin Friday evening with a meeting of euro area finance ministers. On
Saturday, finance ministers from the European Unionwill meet. Mrs. Merkel and Mr. Sarkozy will also
meet. On Sunday, heads of state or government from the European Union, the European Council, will
gather in the morning. Then just the 17 euro area leaders will meet.

By saying they need more meetings next week, the leaders prolonged the suspense and created the
impression that they were having trouble agreeing on details, including ways to maximize the firepower of
the 440 billion euro, or $607 billion, bailout fund.

Agreement is broad on the need to restock capital cushions at European banks so they could withstand a
default by Greece. But agreeing on how much money banks should raise, and where the money should
come from, is another matter.

Goldman Sachs estimated the amount at 300 billion euros, or $412 billion, which would have to come
from capital markets, or as a last resort, taxpayers. Other estimates range from 100 billion euros to 400
billion euros, depending on assumptions about how deep a loss banks must absorb on their holdings of
Greek and other government debt.

European officials, according to people involved in the discussions, are leaning toward the low estimates,
which would be easier to raise but might not be enough to rebuild faith in European banks and restore
their access to international money markets.

Banks are fiercely resisting attempts to make them raise more capital, which would reduce profits and
expose them to government control if they cannot raise enough from private investors. Whether
governments have the legal authority to require recapitalization is in question.

Meanwhile, negotiations to get banks to take bigger losses on their investments in Greek debt "are
making very little progress," said a banker with knowledge of the discussions, who spoke on condition of
anonymity because the talks were continuing.

European Union officials hope to reduce the amount of money that Greece, which is virtually bankrupt,
owes the banks so that it might be able to get back on its feet faster. This summer, banks agreed to take
losses estimated at 21 percent, but with Greece's economy getting worse by the day, some policy makers
now want the banks to accept losses on their holdings of Greek debt of 50 percent to 60 percent.

The banks have said they would agree to take higher losses only if they received a guarantee that
Greece can eventually start paying bills on its own, rather than continuing to rely on bailouts. On
Thursday, the International Monetary Fund said Greece might have to rely on financial lifelines from its
European partners for nine years.

That assessment alarms the banks, which do not want to continue pouring money into Greece with no
hope of repayment.

But if banks do not voluntarily agree to write down more debt, losses may have to be forced on them, an
action that would essentially entail a Greek default.

Another critical point is how to address the inadequacy of the 440 billion euro bailout fund. Proposals that
had seemed promising, including using the fund to issue insurance on government bond issues, have
quickly run aground.

"There are major structural and technical impediments" to make such an agreement work, analysts at
Royal Bank of Scotland said in a note to clients.

In Berlin, Mrs. Merkel canceled a speech to Parliament on Friday because of a deadlock over proposals
to leverage the bailout fund, known as the European Financial Stability Facility.
While France is driving efforts to strengthen the fund, it is in no condition to increase its own financial
guarantees without risking its triple-A credit rating.

Its solution is to draw on European Central Bank resources to increase the spending power of the bailout
fund. But that is opposed by Mrs. Merkel and Jean-Claude Trichet, the departing European Central Bank
president.

Talks involving Mrs. Merkel on Wednesday were described as "tense" by one official with knowledge of
the talks, who said that at times she seemed to take an "obstructionist" stance. At one point she
complained that documents relating to the bailout fund had not been translated into German, the official
said.

During the Frankfurt talks Mrs. Merkel and Mr. Trichet held firm on use of the bailout fund. José Manuel
Barroso, president of the European Commission, sought to raise the pressure for a deal, saying that "if
there is one aspect without which all the others will lack credibility, this is indeed the need to reinforce the
euro zone's fire walls."

In Brussels, officials said the parameters of the discussion were being set by German domestic politics
and, in particular, by the need for Mrs. Merkel to gain a mandate from Parliament.

Though some policy makers have urged a "shock and awe" approach with about 2 trillion euros available
to the bailout fund, that now seems unrealistic.

"The question is not whether one trillion is enough," said a European diplomat who spoke on condition of
anonymity because of the delicacy of the subject. "It's whether you can get to a figure of one trillion while
maintaining credibility."

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

6. IEA SEES MIXED OUTLOOK FOR OIL
PARIS, Oct. 20 (UPI) -- Though there are concerns about the European economy, oil producers shouldn't
scale back production, an International Energy Agency official said from Paris.

David Fyfe, the oil industry and markets division head at the IEA, said world oil markets were tight
because of slow production from the North Sea and Canada and the loss of production from war-torn
Libya.

The Organization of the Petroleum Exporting Countries in June left official production quotas in check
despite concerns high energy prices could slow economic growth. The IEA called on its members to
release oil from strategic reserves to offset the loss of production from Libya.

Nevertheless, Fyfe was quoted by the Platts news service as saying "we don't think that this is a market
(in which) producers should be looking to scale back supply."

He said the IEA expected oil demand to increase by as much as 1.3 million barrels per day in 2012. A
slumping economic scenario for members of the 34-member European Organization for Economic
Cooperation and Development could erase the growth forecast, however.

"If we are heading toward a double dip in the OECD demand growth will be wiped out next year," he said.

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

7. ENI, IEA DISAGREE OVER IMPACT OF 'ARAB SPRING' ON
INVESTMENT
Oil & Gas Journal
Eni SPA Chairman Paolo Scaroni, addressing a ministerial meeting of the International Energy Agency in
Paris, sharply disagreed with the organization's assessment of the impact of the so-called Arab Spring on
oil and gas investment.

In his speech, Scaroni told world energy ministers and industry leaders that while "the potential impact of
the Arab Spring on energy security is difficult to assess, there are at least three reasons to be optimistic."

He said, "The first is that the way the crisis went in Libya is an exception," adding that countries such as
Egypt and Tunisia "have managed things without losing a single barrel of production."

Scaroni said the second reason concerns Libya, which "after months of battles, has very quickly returned
to the global market and Eni, the most important energy company in the country, has already resumed
production of oil and started to export gas."

Not least, said Scaroni, "The oil contracts are legally binding, even in times of regime change."

Scaroni said Iraq represents the third and most significant reason for optimism. "It has great potential with
giant fields that are relatively simple from a technical point of view."

Whether Iraq will achieve "its target of producing 12 million b/d in 2017, equal to 40% more of current
Saudi production, is still an open question," said Scaroni.

"However, there is no doubt that Iraq will be a factor for change in the oil sector, and our experience in the
Zubair field confirms the fact," Scaroni said.

In September, Eni said in a development plan that Iraq's Zubair oil field is expected to reach its peak
output target of 1.2 million b/d by the start of 2017.

To help reach that goal, an Eni-led consortium, which includes Iraq's Missan Oil Co., Occidental
Petroleum Corp., and Korea Gas Corp., plans to invest $18 billion in the southern Iraqi oil field.

Scaroni's remarks contradicted IEA Chief Economist Fatih Birol who said the Arab Spring had dampened
investment plans in oil and gas projects as governments in the Middle East and North Africa focus instead
on meeting popular demand for social change.

The IEA believes that 90% of the growth in oil production in the next 10 years needs to come from MENA
countries.

In an excerpt from its World Energy Outlook to be published on Nov. 9, IEA said $10 trillion would be
needed for oil investments, $16.9 trillion for electric power, and $9.5 trillion for gas from 2011 to 2035.

"One of the question marks is over the [MENA] region, which is crucial to meet demand growth and to
meet decline in the existing production" of oil, said Birol.

"In some countries because of the unrest the projects are not going forward as much as we would like to
see," said Birol, without naming any country in particular.

"In other countries, they are not able to put money for projects on the table because they have other
pressing issues in their countries to meet demands from the population," Birol said.

"Some countries seem to follow different oil policies not to raise production as much as the market would
like to see," said Birol, apparently repeating earlier criticism of Saudi Arabia which has vowed not to
increase its production capacity (OGJ Online, Oct. 11, 2011).

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

8. OIL BLITZ 'IRAQ'S MOST DANGEROUS MOMENT'
BAGHDAD, Oct. 20 (UPI) -- Increasingly, Iraq's drive to expand its oil and natural gas industry, the
country's economic lifeline, is becoming dependent on the government's ability to ensure security and,
without U.S. forces, that looks to be a serious problem.

Hussein al-Shahristani, the deputy prime minister for energy affairs, recently observed that a bungled
bombing blitz of the Baiji refinery 200 miles north of Baghdad Feb. 26 was "the most dangerous moment
since the fall of the Baathist regime" in 2003.

The refinery, which has a capacity of 310,000 barrels per day and is the largest in Iraq, was crippled for
three weeks, seriously reducing the supply of gasoline.

Shahristani, a former oil minister who isn't given to hyperbole, said only about one-third of the explosives
planted by al-Qaida gunmen detonated.

If all the explosives had gone off, Baiji would have been out of action for months, causing major economic
disruption.

Brig. Gen. Moussa Abdel-Hassan, commander of the oil police in southern Iraq, where 65 percent of the
country's known oil reserves lie, warned recently that authorities are hardly able to ensure the protection
of vital energy infrastructure in the region because of a lack of manpower and advanced security
equipment.

These problems will increase as old fields are upgraded, new fields developed, new refineries and export
terminals and pipeline networks are built to handle increased production and untapped natural gas
reserves open up.

The energy industry suffered heavily during the five-year insurgency that followed the U.S. invasion of
March 2003 and the toppling of Saddam Hussein's dictatorship.

The industry remains a vulnerable target, a danger that will heighten as U.S. forces move toward
completing a military withdrawal by Dec. 31.

In June, the Zubair 1 oil storage facility in the south was set on fire in a spate of bombings. Security is
considered tight at the facility, yet the bombers were able to plant military-grade C4 explosives on four
tanks filled with crude without being spotted.

Soon after, four bombs were planted at the Doura refinery south of Baghdad, which has a capacity of
240,000 barrels per day. All were defused.

The Shiite-dominated south is particularly vulnerable to Iranian-backed Shiite "Special Groups" linked to
political leaders such as Moqtada Sadr, who a few years ago fought the Americans and the central
government.

He has warned there will be trouble if U.S. forces remain past Dec. 31.

If Baghdad allows some U.S. troops to stay on as "training instructors" the region's oil infrastructure would
likely be a primary target for sabotage.

The government, desperate to demonstrate it has the security threat covered and thus secure further
foreign investment to accelerate the expansion of the energy industry, announced major new projects for
the south Wednesday.

Exxon Mobil, BP and Eni of Italy will spend some $100 billion between them to carry out extensive
upgrades of the mega-fields they operate, said Thamer Ghadhban, senior energy adviser to Prime
Minister Nouri al-Maliki.

The U.S. oil giant will fork out $50 billion on the supergiant West Qurna Phase 1 oil field. The other $50
billion will be spent by BP on Rumaila and Eni on Zubair.
These three fields between them produce around 2 million barrels a day, which accounts for some two-
thirds of Iraq's total output of 2.9 million bpd.

They are scheduled to produce at least 6.8 million bpd by 2017.

Ghadhban also disclosed that Exxon Mobil, acting on behalf of other foreign companies like BP, Royal-
Dutch Shell and Lukoil of Russia, will lead a $3 billion project to build a water injection plant, to boost
production levels in the south.

The Kirkuk oilfields in the north, the core of a dispute between Iraq's autonomy-seeking Kurdish minority
and the central government, are also flash points.

The Kurds claim the region is theirs. The government doesn't want to lose the oilfields, while Kirkuk city is
also claimed by Sunni Arabs and the Turkomen minority.

Many say an explosive showdown is inevitable because none of the parties will back down.

"Kirkuk is witnessing a deterioration in the security situation," warned Hassan Torman, a Turkoman and
head of the Kirkuk provincial council.

"It's possible the attacks will increase when the Americans troops leave."

U.S. forces pulled out of the flash point city of Mosul in the north earlier this month.

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

9. LUKOIL, PARTNERS TO AWARD DEALS AT IRAQ WEST-QURNA
OIL FIELD
ISTANBUL -(Dow Jones)- OAO Lukoil Holdings (LKOH.RS) and its partners are poised to award a feast
of contracts to international engineering and construction companies as it moves full speed ahead with
development of its supergiant West-Qurna Phase 2 in southern Iraq, a senior Lukoil executive said.

Along with Norway's Statoil ASA (STO) and Iraq's state South Oil Company, Lukoil is in the final stages of
evaluating commercial and technical bids for contracts competing to build the central processing facility,
or CPF, export pipelines, tank farms, and a 126-megawatt power station.

"We have received the bids. We have been evaluating them and expect to award the contracts very
soon," a senior Lukoil executive told Dow Jones Newswires late Thursday. He expects all packages to
have been awarded in the coming weeks.

He did not name the bidders, but another Lukoil official said earlier in the year that five companies had
been shortlisted--South Korea's Samsung Engineering Co. Ltd. (028050.SE), Saipem SpA (SPM.MI),
SNC-Lavalin Group Inc. (SNC.T), Punj Lloyd Ltd. (532693.BY) and Globalstroy-Engineering (GSEN.RS).

Two other bidders--Petrofac and Technimont--were said at the time to have been dropped.

The biggest package will be the construction of the CPF which will enable the consortium to produce
400,000 barrels of oil a day from West Qurna-2 by 2014 as part of the first-stage development of the field.

First output of about 150,000 barrels a day will flow in 2013 and then rise rapidly as more wells are tied in,
officials from the consortium said.

Lukoil awarded in August a contract to Baker Hughes Inc. (BHI) to drill 23 new wells in the field. "Drilling
in the first well started three weeks ago," the executive said.

West-Qurna-2 is a green field that has yet to produce any oil.
Lukoil and Statoil were awarded a 20-year service contract for West-Qurna 2 in Iraq's second licensing
round held in December 2009. The firms promised to get the southern Iraqi field pumping at a rate of 1.8
million barrels a day for payment of $1.15 a barrel.

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

10. QADDAFI DEMISE IS 'GOOD NEWS' FOR LIBYAN OIL FUTURE,
STATE COMPANY SAYS
By Robert Tuttle and Ayesha Daya
Bloomberg
Oct 20, 2011

The death of former Libyan leader Muammar Qaddafi in his home town of Sirte will expedite the nation's
efforts to revive crude output to normal levels, the chairman of state-run National Oil Corp. said.

"This will help in getting a lot of fields back into production as soon as possible," Nuri Berruien said today
in a telephone interview from Libya. "Now that Sirte is liberated, people can move quickly. People can go
to the fields that are in the west."

Gunfire echoed across Libya's main cities today as crowds poured into streets to celebrate the capture
and death of Qaddafi, who ruled the North African nation for 42 years. The fall of Sirte, located along the
main highway linking the eastern and western regions, will allow oil workers and engineers back to the
fields, Berruien said.

Libya, holder of Africa's biggest crude reserves, seeks to restore production to about 1.7 million barrels a
day within 15 months, after output dwindled to almost nothing amid the rebellion that broke out in
February. The collapse in exports contributed to prices rallying as much as 34 percent in London earlier
this year and prompted the International Energy Agency to announce in June a global release of
emergency stockpiles for the third time in the agency's history.

Supply to Rebound

Libyan output is slowly rising after it plummeted from 1.6 million barrels a day in January. Companies
including Eni SpA, Libya's biggest foreign investor, and Total SA have returned as fighting ebbed. Supply
may rebound to 750,000 barrels a day by the end of the year from 430,000 barrels a day now, Berruien
said.

International companies including Halliburton Co. and Schlumberger Ltd. may be more willing to send
staff back to the country as it returns to "normalcy," the NOC chairman said.

"This will have a positive impact that is not necessarily immediate, but we could see the impact after a
week or so," said Abdeljelil Mayuf, the head of the information department at Arabian Gulf Oil Co., a
state-run company in Benghazi that had quickly joined the rebel side.

"This will encourage foreign oil companies that were reluctant in the past to come back to Libya," Mayuf
said by phone from Benghazi. "These companies are looking for complete security. Some companies,
however, may still be reluctant now because they fear what could come next, but I don't think anything will
happen. This is the end of Qaddafi's regime."

OPEC, Security Concerns

A speedy return of Libyan exports may cause Saudi Arabia and other members of the Organization of
Petroleum Exporting Countries to consider reining back supply when the 11-nation group meets on Dec.
14 in Vienna.

Even so, analysts at BNP Paribas SA, Barclays Plc and JBC Energy GmbH are less convinced Qaddafi's
killing will accelerate supply because security in the country remains uncertain.
"The factors that govern this lie elsewhere," Harry Tchilinguirian, BNP's London-based head of
commodity markets strategy, said in an e-mail. "Alongside the necessary work required to address
damaged infrastructure, political stability will be key in shaping the future of Libya's oil supply."

While production has recovered to 400,000 barrels a day, a full resumption is unlikely before the end of
2012, he said.

Oil Prices

David Wech, an analyst at consultant JBC, said by phone from Vienna that output won't reach 1 million
barrels a day until the end of 2012 and "will take a couple of years to return to pre-war levels."

Brent crude oil for December settlement was up $1.34 at $109.73 a barrel at 7:30 p.m. on London's ICE
Futures Europe exchange. Prices fell temporarily on news of Qadaffi's capture, then recovered.

Barclays maintained its forecast that Libya will restore production to about 600,000 barrels a day by the
end of the year, as divisions among the rebel-backed National Transitional Council may slow
rehabilitation of the oil industry.

"I don't think the situation on the ground is different, Amrita Sen, a Barclays analyst based in London, said
in a phone interview. "The problems of looting or damage at the oil fields haven't changed."

Street Celebrations

In the eastern city of Benghazi, where the rebel movement began, the mood was jubilant.

"This is the happiest moment of my life," said Ibrahim Suleiman, a 22-year-old driver in the city. "When I
heard the news on television I didn't believe it, I ran off to the streets and I started jumping up and down."

Executives are optimistic the demise of Qaddafi two months after he was forced from power will lead
rebel fighters to resume work at their old jobs in the petroleum industry.

"Quite a few" workers fought against Qaddafi's forces, Najmi Karim, chairman of oil field operator Mellitah
Oil & Gas BV, said in a phone interview from Tripoli. "Now all the manpower should be able to go back,
so we should see more stability and people will go back to a normal life."

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

11. HUGO CHÁVEZ SAYS HIS CANCER IS GONE
By Simon Romero
The New York Times

RIO DE JANEIRO - President Hugo Chávez of Venezuela declared on Thursday that he had beaten
cancer, less than five months after he stunned Venezuelans by revealing that he had undergone
emergency surgery to remove a tumor while in seclusion in Cuba.

"No abnormal cellular activity exists," said Mr. Chávez in comments broadcast on state media while on a
visit to western Venezuela, where he was preparing to visit a Roman Catholic shrine. "I've begun to exit
the cave," said the president, dressed in a green military uniform.

Despite Mr. Chávez's announcement, which he made after a brief trip to Cuba for a checkup, mystery still
shrouds his condition. He has never publicly revealed what type of cancer afflicted him. Altogether, Mr.
Chávez, 57, underwent four chemotherapy treatments, including three in Cuba and one in Venezuela,
according to the government.
Physically, he still looked like a changed man on Thursday, appearing bloated and with a green military
cap covering a bald head. Spiritually, Mr. Chávez also seems to have acquired a more religious air. "I'm
more Christian every day," he said Thursday. "Socialism is the road to Christ."

Confusion persists in Venezuela about how healthy or sick Mr. Chávez may be. Salvador Navarrete, a
prominent Venezuelan doctor who describes himself as the president's former personal surgeon, said this
week that Mr. Chávez had less than two years to live, attributing his illness to a "very aggressive" tumor in
the pelvic area.

Dr. Navarrete, a former militant in Mr. Chávez's political movement, said he drew his conclusions from
recent discussions with Mr. Chávez's family. He made his claims in an interview with M Semanal, the
weekly magazine of the Mexican newspaper Milenio.

In the interview, Dr. Navarrete offered other details about Mr. Chávez's health. He said the president had
been treated for bipolar disorder, and that Mr. Chávez smoked cigarettes at times of tension in his private
chambers and consumed copious amounts of coffee throughout the day.

An employee in Dr. Navarrete's office in Caracas said he was unavailable for comment. State media has
dismissed Dr. Navarrete's claims, with Mario Silva, the host of a nightly program that disparages Mr.
Chávez's opposition, contending that Dr. Navarrete was never the president's physician.

Private Venezuelan news organizations reported this week that the officials from the Sebin, Mr. Chávez's
secret intelligence police, had appeared at Dr. Navarrete's office this week to question him.

Mr. Chávez, while refraining from discussing the specifics of his tumor, looked ahead on Thursday to next
year's presidential elections. Taunting his opponents, he said, "It's easier for a donkey to pass through the
eye of a needle than for you to beat me."

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

12. US EPA TO ISSUE NATIONAL SHALE WASTEWATER RULES IN
2014
Oil & Gas Journal

The US Environmental Protection Agency will issue pre-treatment standards for flowback water from
shale gas extraction by 2014, the agency announced on Thursday.

The move is sure to frighten a gas production industry that has resisted almost all forms of federal
oversight of hydraulic fracturing and horizontal drilling in favor of regulation by individual states.

The EPA's action is separate from its ongoing study of hydraulic fracturing's effects on drinking water.
That study is supposed to conclude in 2014 as well.

The EPA said Thursday it was bringing coal bed methane and shale gas production under its effluent
guidelines program under the Clean Water Act, which sets national standards for industrial wastewater
discharges. The agency has issued regulations for 57 other industries and will now collect data from
states, stakeholders and the industry to devise a standard wastewater must meet before it is submitted to
a treatment facility, EPA said.

"Currently, wastewater associated with shale gas extraction is prohibited from being directly discharged to
waterways and other waters of the US," the EPA's Thursday announcement said.

"While some of the wastewater from shale gas extraction is reused or re-injected, a significant amount still
requires disposal," the EPA explained. "As a result, some shale gas wastewater is transported to
treatment plants, many of which are not properly equipped to treat this type of wastewater. EPA will
consider standards based on demonstrated, economically achievable technologies, for shale gas
wastewater that must be met before going to a treatment facility."
The agency said also that it is set to issue national wastewater rules for coal bed methane producers in
2013. The EPA said it can produce the CBM guidelines quicker than the shale standards because it has
already done extensive research and data collection in that area.

The head of the Sierra Club's Natural Gas Reform Campaign, Deb Nardone, praised the government's
action.

"Proper treatment of this polluted water is vital to ensure clean drinking water for the millions of
Americans that share water with the natural gas industry," Nardone said.

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

13. CANADIAN NATURAL GAS EXPORTS DECLINE
OTTAWA, Oct. 20 (UPI) -- Warmer temperatures and the opening of natural gas pipeline in the United
States led to a modest decline in Canadian natural gas exports, data indicate.

The Canadian Natural Energy Board announced natural gas exports declined by slightly more than 7
percent from July to August to around 8.3 billion cubic feet per day.

Market sources were reported by the Platts news service as saying the decline was in part related to
weather conditions and to the opening in July of the Ruby natural gas pipeline.

The Ruby pipeline stretches 678 miles from southwestern Wyoming to markets in Nevada, California,
Oregon and Washington. The pipeline has a designed capacity of 1.5 billion cubic feet of natural gas per
day.

Canada is one of the primary exporters of natural resources to the United States. The U.S. Energy
Information Administration ranks Canada 29th in terms of proven natural gas reserves.

The NEB this week backed an export license for the Kitimat liquefied natural gas project slated for
western Canada.

Kitimat LNG President Janine McArdle said the project was a "remarkable opportunity" to gain access to
Asian energy markets.

The project could produce the equivalent of 700 million cubic feet per day. A Front End Engineering and
Design study is expected to be complete early next year.

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

14. STATOIL DOUBLES ESTIMATES FOR GIANT NORTH SEA FIND
DJ

Norway's oil and gas major Statoil (STO) Friday announced its giant North Sea discovery Aldous Major
South is estimated to contain double the volume compared with previous estimates.

The partly state-owned Norwegian company said the find is estimated to contain between 900 million and
1.5 billion barrels of recoverable oil equivalent. This compares with its previous statement that the find
would contain between 400 million and 800 million.

Aldous Major South is linked to the Avaldsnes discovery and the combined area is one of the largest finds
ever on the Norwegian Continental Shelf.

Statoil said the company would wait to provide updated volume estimates for the combined area.
Sweden's Lundin Petroleum (LUPE.SK), which operates the Avaldsnes field has said Avaldsnes contains
between 800 million and 1.8 billion barrels.

"Aldous/Avaldsnes is a giant, and one of the largest finds ever on the Norwegian continental shelf.
Volume estimates have now increased further because the appraisal well confirms a continuous, very
good and thick reservoir in Aldous Major South," said Tim Dodson, executive vice president for
Exploration in Statoil.

Statoil is the operator and has a 40% interest in Aldous Major South while Norwegian state-owned Petoro
owns 30% of the field, Det norske oljeselskap (DETNOR.OS) owns 20% and Lundin Petroleum AB
(LUPE.SK) 10%.

In Avaldsnes, Statoil and the operator Lundin Norway AS each have a 40% interest, while Maersk Oil
Norway AS -- the oil arm of A.P. Moller-Maersk A/S (MAERSK-B.KO)-- owns 20%.

Shares Thursday closed at NOK137.10.

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

15. PEAK OIL AND THE GREAT RECESSION
Mother Jones

Jim Hamilton, an economist at UC San Diego who has done extensive work on the economics of oil
spikes, has just published a summary of the current state of oil macroeconomics called"Oil Prices,
Exhaustible Resources, and Economic Growth." His conclusion: "The historical record surely dictates that
we take seriously the possibility that the world could soon reach a point from which a continuous decline
in the annual flow rate of production could not be avoided."

Translation: peak oil might not be far away, and we should take it pretty seriously. And Hamilton's
research suggests strongly that when peak oil does arrive, it's not going to be pretty:

Coping with a final peak in world oil production could look pretty similar to what we observed as the
economy adapted to the production plateau encountered over 2005-2009. That experience appeared to
have much in common with previous historical episodes that resulted from temporary geopolitical conflict,
being associated with significant declines in employment and output. If the future decades look like the
last 5 years, we are in for a rough time.

Most economists view the economic growth of the last century and a half as being fueled by ongoing
technological progress. Without question, that progress has been most impressive. But there may also
have been an important component of luck in terms of finding and exploiting a resource that was
extremely valuable and useful but ultimately finite and exhaustible. It is not clear how easy it will be to
adapt to the end of that era of good fortune.

"Pretty similar" to 2005-09 means a big spike in oil prices that causes a big recession. The chart on the
right shows what he means. The green line shows expected economic growth. The dashed line shows
the Great Recession. And the red line? That's his estimate of the effect of the huge spike in oil prices in
2007-08. If Hamilton is right, then the oil spike is responsible for about two-thirds of the Great Recession
all by itself. The housing and credit bubbles are only responsible for a fairly small piece of it.

But even if Hamilton is wrong about the precise trajectory of the 2008 meltdown, the evidence is now
clear that oil spikes have a very significant effect on the economy. And as the production of oil starts to
plateau, oil prices are going to spike a lot. In fact, they're likely to spike every time the global economy
starts to grow. As I said the last time I reported on Hamilton's work:

If this model is accurate-and if the ceiling on global oil production really is around 90 mbd and can be
expanded only slowly-it means that every time the global economy starts to reach even moderate growth
rates, demand for oil will quickly bump up against supply constraints, prices will spike, and we'll be thrown
back into recession. Rinse and repeat.
Hamilton's language is cautious, but this is basically what he's saying. Oil controls our economic future
more than we'd like to believe.

Via Stuart Staniford, who calls Hamilton's paper "thoroughly researched, superbly argued, and very
clearly written."


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

16. IGNORE THE SCEPTICS, THE 'PEAK OIL BRIGADE' IS RIGHT
The Ecologist (blog)

Peak oil sceptics argue the real problem for climate change and our planet may be too much fossil fuel,
not too little. Lionel Badal explains why he disagrees

In a recent article, Dieter Helm, Professor of energy policy at the University of Oxford, argued that 'the
peak oil brigade' was 'leading us into bad policymaking on energy'.

According to him, it is a mistake to assume that 'oil and gas prices are going ever upwards, that they will
be volatile and that a core function of energy policy is to protect British industry and consumers from the
consequences'. Yet, his argumentation contains serious omissions and inaccuracies.

Let me start by saying on which point I agree with Professor Helm. Yes, the planet certainly has enough
fossil fuels 'to fry the planet several times' and mitigating climate change should be a priority. But whether
we like it or not, 'peak oil' remains a real problem. The situation is actually easy to comprehend and I
seriously wonder how Professor Helm fails to understand it.

According to Shell, in order to maintain global oil production at today's level, we would need to add the
equivalent of four new Saudi-Arabia, within the next ten years. A study from the US Energy Information
Administration indicates similar conclusions. This is a tremendous effort, which many in the industry
would argue is an impossible one.

Indeed, what matters is that production from current oil fields declines by about 5 per cent per year. While
demand may be inelastic, the same is true for production. It usually takes between five to seven years to
produce oil once a discovery is made. As we can see in the EIA graph, tensions in the markets in the
coming years are now inevitable. To quote the US Joint Forces Command, 'as early as 2015, the shortfall
in output could reach nearly 10 million barrels per day'.

While conventional oil production peaked in 2006, it is correct that unconventional resources - Canadian
oil sands, US shale oil and Venezuelan extra heavy oil - are enormous. But producing oil from these
resources is slow, economically viable only at a high price and environmentally destructive.

According to the energy consultant, IHS CERA, described by The Economist as 'oil optimists', Canadian
oil sands could, in the 'high growth case', reach no more than 5.7 MBD by 2030. Meanwhile, the extra
heavy oil in the Venezuelan Orinoco Belt and US shale oil are expected to play an even smaller role in
future production. These are no more than peanuts in regard to the four new Saudi-Arabia we need within
ten years.

Contrary to what Professor Helm argues, current high oil prices have nothing similar to what happened
during the 1979 oil shock. While oil prices could, momentarily, decline with another recession, since
conventional oil production peaked in 2006, we have entered a new energy paradigm.

As the Chief-Economist of the International Energy Agency likes to say, 'the era of cheap oil is over'. For
as long as we remain addicted to oil, we should expect price shocks, volatility in the markets and
economic crises.
If policymakers finally understand our new energy paradigm, then this is undoubtedly a good start.
Climate change and 'peak oil' both represent unprecedented challenges to humankind and dealing with
them requires that we urgently de-carbonise our economies.

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

17. NO PEAK OIL TO YERGIN WHO SEES YEARS OF RISING
SUPPLIES
Business Week

Toward the end of "The Quest," his sprawling book on energy, Daniel Yergin introduces an obscure 19th-
century character named Sadi Carnot.

The son of one of Napoleon's ministers of war, Carnot was convinced that an important reason for
Britain's victory over Napoleon was "its mastery of energy, specifically the steam engine." In 1824 he
published a study on this theme called "Reflections on the Motive Power of Fire," which Yergin calls
"almost certainly the first systematic analysis of how man had actually harnessed energy."

For more than three decades, Yergin has been Carnot's heir, cutting through fog and emotions to provide
lucid analysis of energy issues. He emerged on the public stage in the wake of the 1973 oil embargo and
its gas lines, which sparked a persistent feeling of unease about energy security in the U.S.

He has been a consultant to industry and governments, most recently as chairman of IHS Cambridge
Energy Research Associates. At the same time he has continued to address a wider audience through
his writing.

Yergin is best known for "The Prize" (1991), his Pulitzer Prize-winning history of the oil industry. "The
Quest" is in some respects a sequel, but it's not in the same league. The new book is too long and lacks a
compelling narrative thread.

More worryingly, Yergin seems overly gentle with major oil- market players such as BP, which was at the
heart of the 2010 Gulf oil spill. In a section on the feverish oil bubble of 2008, those analysts predicting
ever higher prices aren't identified in the main text, their names buried in footnotes. Perhaps Yergin's
business interests are conflicting with his reporting.

Peak Oil Theory

"The Quest" is still worth reading for Yergin's erudition and insight. For instance, he debunks the peak oil
theory, which says world gas and oil production may soon top out and then rapidly decline. (This idea
helped lead to the price spike of 2008.) Yergin notes that such fears have cropped up before.

"This is not the first time the world has run out of oil," he writes. "It is the fifth."

Yergin is confident that the industry will be able to keep up with growing demand. He says an IHS CERA
study of some 70,000 oil fields reveals that "the world is clearly not running out of oil. Far from it."

Supply is growing, not shrinking, Yergin says. This is due not only to new discoveries but to an even more
important source: additional oil found in existing fields. The big question, he implies, is not whether the oil
is there but whether the political climate will foster the massive investment - $8 trillion is one estimate -
that is needed to satisfy demand over the next quarter century.

Plateau, Not Peak

Yergin concludes that rather than collapsing, world production is likely to grow about 20 percent over the
next two decades and that a plateau "is a more appropriate image for what is ahead than the peak."
Twenty years may not seem so far away, but Yergin believes that new energy sources such as shale oil
will be found to keep pushing that expected plateau "into the horizon."
The central message of Yergin's book is reassuring. Yes, the world faces enormous challenges in finding
ways to satisfy the demand for energy and tackling climate change. Yet human ingenuity offers hope.

Yergin tells the story of the determined experimenting by George P. Mitchell of Mitchell Energy, which
eventually produced the shale gas revolution that has transformed the U.S. natural gas supply in the last
few years. "Perennial shortage gave way to substantial surplus," Yergin writes.

Hydraulic Fracturing

The hydraulic fracturing and horizontal drilling used in recovering gas from shale could also lead to huge
new supplies of oil, despite environmental concerns, he says.

Other parts of the book are less satisfying. A chapter called "Supermajors" revisits the takeover wave of
the 1990s that created Exxon Mobil, the current version of BP and France's giant Total. Yet one longs for
more analysis of whether these takeovers worked.

His writing on climate change, probably the biggest energy challenge, lacks a punch line. He capably
surveys the world of renewables: Wind power, solar power, bio-fuels and what he calls "the fifth fuel":
efficiency. He is wishy-washy on whether investment in these areas will be enough to head off climate
disaster.

With the caveat that "things can go seriously wrong," Yergin places his bets on a "globalization of
innovation" that will "fuel the insight and ingenuity that will find the new solutions." There is an old saying
that "oil is found in the minds of men." Yergin is confident that the solutions to our energy conundrums will
be found there also.


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

18. WESTERN SOLARS UP THE ANTE AGAINST CHINESE PEERS
By Christoph Steitz and Leonora Walet

FRANKFURT/HONG KONG (Reuters) - Chinese solar companies could soon find themselves bereft of
some of their biggest foreign markets as Western manufacturers intensify a solar trade war and seek stiff
anti-dumping duties on low-cost Chinese products.

German group SolarWorld said on Thursday it was working on steps to curb alleged price dumping by
Chinese rivals in Europe.

This comes less than a day after its U.S. unit led a group of seven U.S. solar companies in urging the
U.S. government to slap anti-dumping duties on Chinese-made solar energy products.

They charged that Chinese producers can aggressively undercut U.S. prices because they receive cash
grants and other subsidies in China, destroying thousands of American jobs.

"If the U.S. takes action, it could have a serious impact on Chinese solar players," said Min Li, head of
alternative energy at Yuanta Securities (Hong Kong) in response to the filed complaint.

Europe is the world's largest solar market, accounting for about 80 percent of global photovoltaic (PV)
installations, while the U.S. accounted for 5.3 percent.

Solar companies have been betting the United States may become the world's largest market in the next
few years, replacing Germany in top spot as Berlin trims subsidies.

Western solar companies have been at odds with their Chinese counterparts for years, alleging they
receive lavish credit lines to offer modules at cheaper prices, while European players struggle to
refinance.
NO FAIR COMPETITION

SolarWorld Chief Executive Frank Asbeck last month said there was no fair competition in the solar
industry, adding that the Chinese government had made credit guarantees of more than 21 billion euros
($29 billion) to its solar companies in 2011 alone.

Chinese solar companies such as Suntech, Yingli and JA Solar have in the past secured generous loans
via the China Development Bank (CDB).

Beijing says it has been fair in its dealings with its trade partners and adheres to its commitments with the
World Trade Organization (WTO).

"Since China's accession into the WTO, (we have) been in strict compliance with the commitments under
the WTO," said Foreign Ministry spokeswoman Jiang Yu.

Carsten Koernig, managing director of the German solar industry association BSW, said the massive
price declines in the solar industry were "not a result of innovation but of uneven political conditions."

Chinese solar companies have grown significantly in recent years, attracted by solar subsidies in
Germany, which have been the industry's highest for a long time, and eating away market share from
their Western peers.

But a steep decline in demand from Europe, which accounts for more than three-fourths of Chinese solar
module makers' revenues, following subsidy cuts have made these companies more reliant on the United
States, and any escalation in trade tensions could pose a major threat to them.

"(The complaint) is closely related to the domestic political and economic situation. There are some social
conflicts and an economic crisis in the United States, so they need to seek a way out and find
scapegoats," said Meng Xiangan, Vice chairman of China Renewable Energy Society.

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

19. INDIA SOLAR PROJECTS GET BIDS FROM LOCAL, FOREIGN
FIRMS
By Saurabh Chaturvedi

NEW DELHI -- India has received bids from 154 companies including Spain's Gestamp Solar, Fonroche
Energy of France and local utilities Reliance Power Ltd. and Tata Power Co. for contracts to build solar
power facilities, an executive of the agency in charge of buying electricity from solar projects said.

The South Asian nation had called bids to build and operate 350 megawatt of solar power facilities. These
will be the second round of contracts to be given under a federal program to have 20 gigawatt of solar
capacity by 2022.

More than half of India's power generation capacity of 182 GW is coal-based, while government officials
term the current solar capacity as negligible.

Building of plants to generate 350 MW solar power is estimated to require 35 billion rupees ($714 million)
in investments.

The executive said the solar power units of Lanco Infratech Ltd., GAIL (India) Ltd., Hindustan Petroleum
Corp., Moser Baer Projects Pvt. Ltd., Infrastructure Leasing & Financial Services Ltd. and Mahindra Solar
One Pvt. Ltd. were also among the companies, which submitted as many as 218 proposals.

The executive from NTPC Vidyut Vyapar Nigam Ltd., a unit of state-run utility NTPC Ltd., didn't want to be
named.
Anil Kumar Agrawal, chief executive of NTPC Vidyut Vyapar, confirmed the number of bids, but refused to
name the bidders.

Mr. Agrawal said the government received proposals for building 2,500 MW of projects against the 350
MW on offer.

"The response has been enthusiastic," he added.

Executives at GAIL, Lanco and Mahindra Solar One confirmed their bids. Gestamp Solar, Fonroche,
Reliance Power, Tata Power, Hindustan Petroleum and Moser Baer, Infrastructure Leasing & Financial
Services didn't reply to emails seeking comments.

Several companies had avoided the previous auction for 620 MW, citing unfavorable terms and small size
of projects, prompting the government to relax rules such as the timeframe for establishing projects and
expand capacities.

Bidding for the second round concluded this month.

Mr. Agrawal said NTPC Vidyut Vyapar is conducting technical evaluation of the applications and plans to
make a shortlist of companies by November to seek price bids. The letters of intent will be issued to the
selected companies in December, he said.

"The aim is to sign the agreements with finalized companies by January-February next year so that we
can see the plants being operationalized by early 2013," Mr. Agrawal said.

Projects under the first auction of the solar program were given in December and have to be completed
by March 2013.

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

20. JAPAN EYES SCOTTISH COAST FOR TIDAL POWER
EDINBURGH, Scotland, Oct. 20 (UPI) -- A Japanese industrial company aims to test a new tidal power
system at an energy center in the north of Scotland, the country's first minister announced.

Scotland, at the European Marine Energy Center in Orkney, aims to host 10 prototype wave and tidal
energy systems by the end of the year. The center had one wave system in 2004 and one tidal machine
in 2006.

Scottish First Minister Alex Salmond announced Kawasaki Heavy Industries plans to try new tidal energy
technology at the Orkney center.

"Japan is one of the great industrial nations of the world and I am encouraged that it shares Scotland's
vision of building on a strong engineering heritage to harness our natural resources and generate clean,
renewable power that can reduce harmful emissions and tackle global climate change," he said in a
statement.

Edinburgh aims to get 100 percent of its electricity demand from renewable energy by 2020. The country
used renewable energy to meet 27 percent of its demand in 2009.

The Scottish government said it was promoting tidal and wave power through a $15.8 million challenge to
boost innovation in the sector.



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