MARKET ACTIVITY / TRADING NOTES FOR DAY ENDING THURS., MAY 14 1998 (4)
INTERNATIONAL
Companies
None
Countries
Oil Firms Wary in Indonesia, but See Stable Output
SINGAPORE, May 15 (Reuters) - Growing social unrest in the Indonesian capital of Jakarta is prompting oil companies to pull staff and families out of the country, oil industry officials said on Friday.
But they said oil companies were expected to maintain normal oil and gas production despite the growing social unrest and political uncertainty, amid increasing calls for President Suharto to step down.
Two Japanese companies reported that petrochemical projects were either being stopped or delayed and analysts said oil and gas negotiations were likely to be halted to see how the political landscape settles.
Marubeni Corp said plans to expand capacity at Indonesian petrochemical company PT Chandra Asri by 165,000 tonnes per year to 675,000 tonnes have been postponed for one year.
Meanwhile, Nissho Iwai said a consortium it is involved with, which includes Indonesian, Thai and Japanese companies, has halted work on a petrochemical project because of falling Asian demand.
The Indonesian government threw further uncertainty on the oil sector on Friday with state news agency Antara reporting that Suharto planned to review and revoke two-week old oil price rises that were part of an International Monetary Fund rescue package.
This, however, would affect state-oil firm Pertamina which has sole rights to domestic distribution of oil products.
Antara quoted oil minister Kuntoro Mangkusubroto as saying in Parliament that "according to the president, we will review and revoke the presidential decree to reduce the people's burden in this time of crisis.''
The price hikes, which included a 71-percent mark up for premium petrol, were largely blamed for an escalation in social unrest, including widespread looting.
Analysts and industry officials said the social unrest was unlikely to have any direct and immediate impact on oil and gas operations in the sprawling archipelago that skirts the equator for more than 5,000 km (3,125 miles).
Most gas production facilities in Indonesia are based offshore and most crude facilities are a long way from Jakarta.
Caltex Pacific Indonesia, which produces half of Indonesia's 1.6 million barrels per day (bpd) of crude, closed its Jakarta office on Thursday. Caltex is equally owned by U.S. oil giants Chevron Corp and Texaco Inc.
But its oil operations are mostly based on the western most Indonesian island of Sumatra. Jakarta is on the central island of Java.
Pertamina estimates Indonesia's gas reserves as high as 140 trillion cubic feet. Oil analysts estimate around 80 trillion are proven.
Indonesia is the world's biggest supplier of liquefied natural gas (LNG) and exports some 26.5 million tonnes per year. But analysts said the two main production facilities -- at Arun, in Northern Sumatra and at Bontang in East Kalimantan -- are areas that are more than 1,000 km from Jakarta.
However, analysts said the current turmoil could hold up Indonesia's efforts to secure sales agreements for its planned eighth production train at Bontang, which aims to produce 2.9 million tonnes of LNG in the first half of the next decade.
Sales agreements are critical to securing financing for construction.
''People will feel nervous about entering talks on that (Bontang), combined with the Asian turn down in demand,'' one industry analyst said.
Overnight, the U.S. government and some oil companies, including Atlantic Richfield Co, DuPont Co unit Conoco and Mobil Corp., said they were planning to evacuate some staff and dependants from Jakarta.
Oil industry sources said on Friday that several other companies, including France's Total SA, a major gas producer in Indonesia, Britain's BG Exploration & Production Ltd. and U.S. firm Amerada Hess were also looking to move personnel out of the country.
Several administrative offices of international oil companies were closed on Thursday and Friday in Jakarta.
One oil official said offices in Jakarta could not operate with any certainty or timetable.
"It's difficult to tell what will happen from one moment to the next,'' he said.
Foreign investors often use Indonesian intermediary companies to secure the seal of approval for deals from Suharto family interests, in a country noted for its cronyism.
Now, investors might be unsure of the best intermediaries to use owing to the political uncertainty.
''If you are negotiating a deal, you have to go to the right people,'' one analyst said.
Even deals that are nearing their close might be in jeopardy, other analysts said.
Indonesian companies that relied on Suharto connections might find themselves out of favour if there were political change, they said.
''Foreign companies have been doing all this work with companies that might not exist too long,'' one analyst said.
India Awards Contracts For Oil & Gas Exploration
NEW DELHI May 14 - The Indian government on Friday said it had decided to sign production-sharing contracts for 18 oil exploration blocks.
"With a view to promote exploration efforts in the country through private participation of Indian and foreign companies, (the) government of India have decided to sign production-sharing contract for 18 exploration blocks," a government statement said.
"Finalisation of the contracts will give a boost to the exploration efforts in the country and it will bring in investment of about $40 million including about $25 million of foreign investment in the first phase itself," the statement said.
It said positive results from initial exploration would lead to further investment.
The statement said the contracts have been awarded to five U.S, one Australian, one Irish and nine Indian companies.
"These exploration acreages were offered by the government under six successive rounds of bidding for exploration from the Fourth Round in 1991 through the Ninth Round in 1995," the statement said.
"These blocks were awarded between September 1994 and December 1996 subject to the finalisation of production-sharing contracts. A number of issues, however, needed to be resolved before the contracts could be signed."
It said the issues included sales tax payment, audit practice, liability of the subcontractor, and environmental aspects.
"The Petroleum Ministry has now conveyed to the concerned companies the government decision and the firm proposals for signing the contracts," it added.
Mobil Chairman Says Proposed Iran Oil Swaps May Help US
WASHINGTON, May 14 - The chairman of Mobil Corp.(MOB.N) said Thursday his company's proposed plan to swap oil shipments with Iran could open the door for the Clinton administration to improve relations with the Middle Eastern country's new government.
In early April. Mobil filed a request with the U.S. Treasury Department to ship crude to northern Iran from the company's nearby oil fields in the region and swap it for Iranian oil that would be shipped from the southern part of the country.
While such a move would make it easier for Mobil to get its oil out of the Caspian Sea region, which has a lack of pipelines, company chairman Lucio Noto said it could also provide an opportunity for the U.S. to improve its relations with Iran.
''I think its a great way to start some sort of limited, controllable dialogue with a country, that very frankly, we have to come to grips with,'' Noto told reporters during a briefing after the company's annual shareholders meeting.
Noto said Iranian President Mohammad Khatami, who was elected in May 1997, ''has said some good things'' about improving relations with the United States. For taking such a bold move, Khatami is facing opposition from Iranian hardliners.
''If there's a struggle going on, why not try to (send) at least a limited, positive signal to somebody who seems to share some of the same ultimate objectives that you have,'' Noto said, referring to Khatami.
If Iran's policies again turned more anti-Western in the future, Noto said the administration could end the company's oil swaps with the country.
In a related matter, U.S. Assistant Secretary of State Martin Indyk told a Senate Foreign Relations subcommitteeThursday that Khatami has make significant changes with his desire to increase cultural contracts between the U.S. and Iran.
However, Indyk said the administration is still concerned about Iran's support of terrorism and its development of weapons of mass destruction.
''If President Khatami is able to turn his constructive rhetoric into real changes in the areas of concern to us, that would lay the foundation for an appropriate response on our side, including better relations between our two countries,'' Indyk said.
Mobil's Noto declined to speculate whether or when the administration will make a decision on the company's request to swap oil with Iran. ''I will not make any forecasts what will happen,'' he said.
He said Mobil has had a series of meetings with the Treasury and State Department on the issue. ''I think we're getting a fair hearing,'' he said.
Dividends
The Directors of Chieftain International Funding Corp. have declared the regular dividend on the Company's US$1.8125 Convertible Redeemable Preferred Shares for the second quarter of 1998. The dividend is payable on June 30, 1998 to holders of record on June 15, 1998 and covers the period from April 1, 1998 to June 30, 1998. The dividend will amount to US$0.453125 per share.
Chieftain International Funding Corp. is a special purpose finance subsidiary of Chieftain International, Inc., which is engaged in gas and oil exploration and production, primarily in the Gulf of Mexico and also internationally.
Earnings
Upton Resources / SPEC 20 Listed
exchange2000.com
Paramount Resources / Top 20 Listed
exchange2000.com
Stellarton Energy / Kerm's Watchlist
exchange2000.com
Cavell Energy / Kerm's Watchlist
exchange2000.com
Canadian Conquest Exploration Inc. / Kerm's Watchlist
exchange2000.com
Summit Resources
exchange2000.com
Symmetry Resources Inc.
exchange2000.com
Q Energy Limited
exchange2000.com
BXL Energy
exchange2000.com
Avid Oil & Gas Ltd.
exchange2000.com
SERVICE SECTOR
Peak Energy Services Ltd. (PES/TSE) announced that it has entered into a letter of intent to acquire all of the issued and outstanding shares of Zeta Oilfield Rentals Ltd. ("Zeta") of Nisku, Alberta. The purchase price for Zeta is $7,964,425 consisting of $6,589,425 cash and 366,667 common shares of Peak at a deemed price of $3.75. Peak will utilise existing cash reserves and its current credit facilities to fund the cash portion of this acquisition. The purchase price is subject to due diligence and certain price adjustments at closing. This acquisition is effective June 1, 1998 with a closing of the same date. This acquisition is subject to several conditions precedent including board of director and regulatory approval.
Zeta has an extensive fleet of drilling, completions, work-over and production rental equipment. The Zeta acquisition will be complimentary to Peak's existing solids control and production rental divisions. Zeta will also provide Peak with a broader geographic presence in Western Canada through its head office in Nisku, Alberta and its field operation in Slave Lake, Alberta. Through this acquisition, Peak will continue to establish itself as the dominant provider of ancillary services to the oil and gas industry. Peak Energy Services Ltd. is a diversified energy services company providing oilfield rental equipment and related services to the petroleum industry in Western Canada.
Wascana Energy, a subsidiary of Canadian Occidental Petroleum Ltd., announced today that it has renewed its relationship with Calgary based Wi-LAN Inc. (ASE:WIN), as a preferred supplier of spread spectrum radio equipment for its field automation initiatives in Western Canada. Wascana currently has more than 750 of Wi-LAN's Hopper(R) wireless modems in service, and expects to double that number.
"Wascana Energy initially chose the Hopper wireless modem for its robustness in transmitting and managing critical data in the often rugged environment of the oil patch," says Nico Roelofsen, Vice President, Sales at Wi-LAN. "Wascana is on the leading edge of SCADA wireless development in the oil and gas industry. This deal, valued at one million dollars, will ensure that Wi-LAN's technology advancements will continue to support Wascana's ground breakingwireless initiatives."
This latest agreement follows the April 14th announcement that Wi-LAN has entered into a two-phase contract to supply Wireless Local Loop systems to a major European communications company that cannot be named at this time. In the first phase, Wi-LAN's products will be used in a fixed high-speed wireless data network providing nation-wide services to businesses and homes. Wi-LAN expects the initial phase of the contract to generate $1.6 million in revenue in 1998 through product deliveries and development fees. Wi-LAN expects to provide at least 50 per cent of the company's Wireless Local Loop (WLL) equipment requirements from 1999 to 2005.
Based on the terms and conditions of this contract, the value of the second phase to Wi-LAN will range from $75 million to $150 million.
Wi-LAN Inc. is a research, development and engineering company whose mission is to design, build and market innovative, leading-edge spread spectrum wireless networking technologies for its global customers. The company's products have been sold in more than 30 countries on six continents. More information on Wi-LAN can be found on the Web at wi-lan.com .
Reference: exchange2000.com for more product info.
Canadian Fracmaster (FMA/TSE) has changed the company name name to Fracmaster. The company announced that at its Annual and Special meeting of Shareholders held today, the shareholders of the Corporation voted and approved an amendment to the Articles of the Corporation which changes the name of the Corporation to ''Fracmaster Ltd.''. The name change was proposed by the management of the Corporation to better reflect the broadening geographical scope of the Corporation's operational activities. In recent years, Fracmaster has extended its area of operations from primarily Canada and Russia, to include the U.S., China, the Middle East and Indonesia.
ENERGY TRUSTS
Earnings
Maximum Energy Trust
exchange2000.com
|
