UPI Energy Watch

European Commission proposes $4.6 billion for energy independence

Following the recent gas dispute between Ukraine and Russia, leading to a temporary halt of Russian gas transport to Europe through Ukraine, the European Commission has announced it is proposing to invest $4.6 billion into energy projects.

The goal of the new investments will be to decrease Europe's dependence on Russia for its natural gas, EU Business reports.

"We need to learn the lessons of the recent gas crisis and invest heavily in energy," European Commission President Jose Manuel Barroso said in a statement.

The $4.6 billion reportedly will come from two sources: leftover funds in the general budget of the European Union and a $6.6 billion European economic stimulus package.

According to the plan, about $1.36 billion will go toward infrastructure to advance gas transport between EU states; about $929 million will be invested in inter-European electric projects, $663 million will go into offshore wind, and $1.66 billion is set for carbon capture and storage. An additional $664 million will go toward strategy to work on climate change, renewable energy, water management and biodiversity in rural areas.

The proposed Nabucco pipeline is one of the projects that the European Commission already has selected to receive funds through this plan. The pipeline would transport natural gas from the Caspian Sea to Western Europe, avoiding Russia and Ukraine. It is slated to receive about $332 million.

French Total has bid for Canada's UTS Energy

The French oil and gas giant has offered $617 million, or $1.30 per share, through its Canadian subsidiary to take over the controlling stake in Canada's UTS Energy.

UTS is a small company in Canada, but its main asset is a 20 percent stake in Petro-Canada's Fort Hills oil sands project, the Calgary Herald reports.

Total said the Petro-Canada asset is the reason it made the bid; it was a move to increase its hold in Canada's oil sands. Total currently owns majority stakes in the Northern Lights and Joslyn oil sands projects.

"This acquisition is in line with Total's strategy of optimizing its heavy oil operations in the Athabasca region (in Alberta province), an industry segment with significant long-term development potential," the company said in a statement.

UTS declined to comment on the offer, but UTS President William Roach said the bid was not solicited.

Australia's Santos now holds a record 1 billion barrels of oil reserves

Adelaide-based Santos announced its total proven and probable oil and gas reserves have surpassed the 1 billion-barrel mark.

The exploration boom in the beginning of 2008, when oil prices were at record-high prices, put many companies worldwide in a similar position of increased reserves.

Santos said in a statement the increase is attributed to a 134 million-barrel increase in oil equivalent and an increase in coal seam gas reserves, The Australian reports.

Santos said it has reached this milestone despite selling its 40 percent stake in the Gladstone liquefied natural gas project in Queensland to Malaysia's Petronas.

Chief Executive Officer David Knox said CSG reserves at the Gladstone LNG project more than doubled in 2008, "confirming we are in a strong position as we work toward the sanction of GLNG in 2010."

Santos shares jumped about 8 cents following the announcement.

--

Closing oil prices, Jan. 28, 3 p.m., London

Brent Crude oil: $43.89

West Texas Intermediate crude oil: $45.10

--

(e-mail: energy@upi.com)