Companies: CNE    RDSA   

Short-term nervousness in oil and continued weakness in copper and some other base metals provide a lacklustre backdrop to developments in the markets. Royal Dutch Shell and Spanish group Repsol have whetted the US Administration’s appetite for imposing US laws beyond its jurisdiction by signing a service agreement to continue work on developing the South Pars gas field in Iran in a deal that could ultimately be worth billions.

US legislation allows President Bush to take action against non-US companies investing in Iran’s energy sector. State Department spokesmen said ‘lawyers and policymakers’ would be studying the Shell/Repsol deal.

Cairn Energy, until lately a stock market darling on the basis of its oil discoveries in Rajasthan, India, depressed the market with a disappointing 2006 trading statement amid concerns about delays in securing agreement with the Indian government over building a pipeline to take its oil 340km to the nearest terminal. However, the company said it expected its Indian subsidiary (recently floated in Mumbai with a volatile aftermarket) to sign a pipeline deal in the first half of this year and begin production from Rajasthan on schedule in 2009.