October132011

UPDATE 2-CNPC, Shell refinery JV in deal with local govt


* Shell likely to lead in the Shell-Qatar side* Imported condensate eyed as feedstock for petchemBEIJING, Oct 13 (Reuters) - A proposed oil refining and petrochemical joint venture between China’s CNPC, Royal Dutch Shell Plc and Qatar signed an initial agreement with local authorities in east China’s Zhejiang province, where the mega project will built, the Chinese company said on Thursday.The project, to include a 400,000-barrel-per-day oil refining and 1.2 million tonnes-per-year ethylene plant, was approved by the National Development and Reform Commission, the country’s macro planner, in June, industry officials said.Pending final government approval, which also includes environmental clearance, the greenfield refinery would give Shell and Qatar their first solid foothold in the world’s second biggest oil consumer, which is in the midst of a refinery building boom.The Taizhou venture, in coastal Zhejiang province, will use imported condensate and other raw materials to produce ethylene and other petrochemicals, CNPC said in a company newspaper.”The agreement further clarifies work scope and targets for each side, reflecting sincere intentions to cooperate,” it said.Qatar is the world’s largest liquefied natural gas (LNG)producer and pumps increasing amounts of condensates as a by-product of its gas production.In January, Qatar Oil Minister Abdullah al-Attiyah and Wang Yong, head of the state-owned Assets Supervision and Administration Commission (SASAC), which is both a regulator and shareholder in most of China’s big state-owned companies, pledged to strengthen cooperation in the oil and gas sector and discussed the Taizhou project.Industry experts told Reuters that the project, likely to cost close to $10 billion, would be led by Shell on the foreign partners’ side. Such an alliance follows a giant supply agreement between Qatar and China.”The project looks promising to win Chinese government’s final blessing, as China may see Qatar as quite a stabilising factor among the Middle East resource nations,” said an industry veteran.CNPC, parent of PetroChina , Asia’s top oil and gas firm, will take 51 percent stake in the project and Shell and Qatar to have 24.5 percent each, according to Chinese media reports.China guards its fuel market tightly against foreign participation. So far only a few foreign firms, including Exxon Mobil , Saudi Aramco and Total , via joint ventures with Chinese partners, have direct marketing access to the roughly 9 million bpd fuel market, the world’s second largest after the United States.

October122011

Goldman lowered tax bill by 10 mln pounds - report


* Goldman battled UK for five years on tax paymentOct 11 (Reuters) - Goldman Sachs Group Inc managed to lower its tax bill by 10 million pounds last year after having “shaken hands” with a top UK tax official, according to a leaked document and reports in the British press.The UK government had been seeking a settlement regarding more than 30 million pounds in back taxes it said Goldman owed, which, along with interest, amounted to roughly 40 million pounds, according to the Guardian newspaper.Thanks to a deal negotiated privately with Dave Hartnett, the permanent secretary of Her Majesty’s Revenue and Customs (HMRC), Goldman was able to pay just the accrued taxes and avoid the 10 million pound interest payment.The government sought back taxes from a group of 22 financial firms in 2005 after uncovering a scheme to route bonuses through offshore entities to avoid taxes. All of the companies but Goldman settled, leading to a drawn-out legal battle between the UK government and the Wall Street bank.Minutes of a meeting of top officials from the HMRC on Dec. 8, 2010, show a deal was finally reached after Hartnett “had ‘shaken hands’ with Goldman Sachs.”Other officials questioned the propriety of the agreement.A lawyer named Dean Rowland noted Goldman had “resisted for five more years, raking up every conceivable point in the tribunal, and putting up a ‘stooge’ witness when Mr Housden was the obvious person to answer questions,” according to the minutes. Michael Housden is the Goldman’s director of European tax.Anthony Inglese, the HMRC’s general counsel, said he would not support the deal if it were “unconscionable” and noted “the difficulty all those present at this meeting were having in justifying a settlement without an interest element.”Spokespeople for Goldman and HMRC did not immediately return requests for comment.In a statement to the Guardian, the HMRC said its portrayal of the issue was “incomplete and therefore fundamentally flawed” but declined to provide more detail because of “taxpayer confidentiality.”News of the tax-interest break was first reported by Private Eye magazine.The 10 million pound tax-interest break is paltry next to the $15.4 billion in compensation and benefits Goldman paid last year. The bank also took a special charge of $465 million in 2010 for special UK taxes on bonuses above 25,000 pounds.

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