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British Govt. launches 'profiteering' inquiry into gas companies operations
London: The British Govt. has launched an investigation into the operations of BP, Shell and other North Sea oil and gas producers after claims that they may have been profiteering from the gas crisis by withholding supplies.

The Trade and Industry Department and Ofgem, the gas and electricity regulator, are trying to establish why North Sea gas production has dropped more sharply than expected.

Last week's spurt in gas prices is being blamed at faster than forecast rundown in North Sea output, in addition to a shortage of storage capacity and renewed allegations of market rigging.

Wholesale prices soared by 40 per cent to a peak of 170p a therm in a feverish spot market, resulting in energy-intensive companies reducing production and forcing the Government on to the defensive. The Govt. accused traders of behaving irrationally.

Even as the country's energy regulator, Ofgem, claimed that information from oil companies about the rundown in North Sea gas production came too late to bring forward plans to increase storage capacity to help cushion the shortfall, oil companies rejected the profiteering claims. A BP spokesman said yesterday: "Definitely not. We have been working hard to ensure that our infrastructure is operating smoothly so that we can make available the maximum supplies of oil and gas."

Ofgem, attempting to counter complaints that it has failed to provide strong enough signals about the prospects of gas shortages, also announced a series of initiatives. The regulatory body says it is in talks with EU authorities, oil companies, the National Grid and operators of the interconnector - the North Sea gas pipeline between Bacton, Norfolk, and Zeebrugge - to try to improve the operation of the gas market and pin down allegations of price rigging.

Sir John Mogg, the chairman of Ofgem, has also asked the European Commission to hold an urgent inquiry into some of the reasons behind the price explosion. He wants the commission to discover why continental suppliers are holding back shipments to Britain despite the attraction of higher prices and whether intervention by the Spanish and Italian governments is distorting the gas trade and represents the start of a protectionist trend.
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Dubai Ports World poised to take over P&O
London: P&O, the last of great names from Britain's glorious shipping past, is expected to receive a firm takeover offer of more than £3bn, from Dubai Ports World (DPW).

Dubai Ports World has been in talks with P&O since October 30, when the UK ports and ferry company said it had received an approach from an unnamed suitor. Since then DPW has been going through the P&O books and has been trying to put a firm valuation on the pension liabilities before making a formal offer.

The market however believes that Denmark's Moeller-Maersk, Singapore government investment agency, Temasek Holdings, and Hong Kong's Hutchison Whampoa could still mount counterbids.

Over the last 20 years P&O, the world's fourth largest ports group, has been built into a diversified group encompassing cruise and bulk vessels, port operations and property.
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Venezuela doubles sale of domestic bonds to US$3bn
Caracas: Venezuela will sell at least US$3bn worth of dollar-denominated bonds to domestic investors, double the amount originally planned because of higher-than- expected demand, President Hugo Chavez said. During his weekly television broadcast, Chavez said that investors had placed US$7bn worth of orders for the bonds.

Venezuela, the world's fifth-largest oil exporter, initially intended to sell US$750mn of bonds maturing in 2016 at a yield of 5.75 per cent and US$750mn of bonds maturing in 2020 at a yield of 6 per cent.

The bonds are a way for domestic investors, who face restrictions in buying dollars in Venezuela, to get access to U.S. currency. Investors buy the bonds with bolivars at the government-set official rate of 2,150 a dollar and may later sell them outside Venezuela. The deadline for placing orders was Nov. 25.

The sale of dollar-denominated bonds in the domestic market helps remove bolivars from circulation and stem inflation. In April, the government sold US$1.6bn of 20-year bonds in Venezuela to yield 7.65 percent after offering an initial US$1bn. The government has sold US$6.1bn of such bonds since 2003.
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Report: Pension funds opting for hedge funds in a big way
New York: Even as more pension administrators are investing in hedge funds, in an effort to boost returns for U.S. pensions funds, questions are now being asked about the propriety of such an action.

A study by the Bank of New York and Casey, Quirk & Associates, a consulting firm, has found that pension plans and other large institutions are expected to invest as much as US$300bn in hedge funds by 2008, up from just US$5bn a decade ago.

Hedge funds, historically used by wealthy investors, are sophisticated investments that like to outperform normal investments, in markets atround the world.

People are concerned whether hedge funds, whose risks are hard to quantify, are appropriate for pension funds, which must guarantee pension payments. Some hedge funds have made headlines after the Bayou Group, a US$450mn hedge fund, shut down after most of its money disappeared.
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